EXHIBIT 10.10
AGREEMENT
BY AND AMONG
NEW MEXICO MARKETING, INC.,
METEOR MARKETING, INC.,
XXXXXX OIL & BUTANE CO., INC.,
AND
THE SOLE SHAREHOLDER OF
XXXXXX OIL & BUTANE CO., INC.
AGREEMENT
AGREEMENT, made this ______ day of December, 2002, by and among New Mexico
Marketing, Inc., a Delaware corporation ("Purchaser"), Xxxxxx Oil & Butane Co.,
Inc. ("GOBCO" or the "Company"), a New Mexico corporation, and Meteor Marketing,
Inc., the sole shareholder of GOBCO ("Shareholder").
WHEREAS, Purchaser desires to acquire all of the issued and outstanding
stock of GOBCO, held by the Shareholder (the "Common Stock"), in exchange for
the consideration and upon the terms described herein (the "Purchase"); and
WHEREAS, the Shareholder desires to sell all of the outstanding Common
Stock of the Company and all of the properties, assets and rights, real personal
or mixed, tangible or intangible, employed by the Shareholder and the Company
exclusively in the conduct of Shareholder's New Mexico operation (hereinafter
referred to as the "Assets"), but excluding certain "Excluded Assets." Such
Assets and Excluded Assets shall be more fully described in Exhibit 1.1 attached
hereto; and
WHEREAS, Purchaser, the Company and Shareholder desire to make certain
representations, warranties, covenants and agreements in connection with the
Purchase and also desire to prescribe various conditions precedent to the
Purchase;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
provisions, and representations contained herein, THE PARTIES HERETO AGREE AS
FOLLOWS:
ARTICLE 1
THE PURCHASE
1.1 SALE AND DELIVERY OF COMMON STOCK. Subject to all the terms and
conditions of this Agreement, the Shareholder shall transfer, convey and deliver
to Purchaser at the Closing (as defined in paragraph 1.2 hereof) good, valuable
and marketable title to the Assets and the Common Stock, free and clear of all
liens, claims and encumbrances except those created by this Agreement in
exchange for the consideration described in this Article 1.
1.2 EFFECTIVE DATE AND CLOSING. The effective date of this transaction
shall be December 31, 2002 (the "Effective Date"). The closing of the
transaction contemplated herein (the "Closing") shall occur at a mutually
agreeable time and place, on the earliest practicable date following the day on
which all of the obligations and conditions precedent contained herein are
complied with, but no later than December 31, 2002.
1.3 PURCHASE PRICE. Subject to all of the terms and conditions set
forth in the Agreement and in reliance on the representations, warranties and
covenants hereinafter set forth, Purchaser shall deliver to Shareholder the
amount of $10,000 at Closing (hereinafter referred to as the "Purchase Price").
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1.4 Post Closing Payments
(a) ACCOUNTS RECEIVABLE. Purchaser agrees to collect, on
behalf of Shareholder, all accounts receivable of the Business that are
less than 61 days old as of the Closing Date, including the portion of
Retained Accounts, as hereinafter defined, that are less than 61 days
old, (the "Accounts Receivable"), The Purchaser will pay Shareholder
any amount not collected within 30 days of Closing .
(b) INVENTORY. Beginning on the Closing Date, the Purchaser
and the Shareholder shall each participate, at their own expense, in a
physical inventory to determine the amount of the inventory held by the
Business for sale to the public as of the Closing Date (including
metered inventory at customer locations) (the "Inventory"). The
Inventory shall be valued at the lower of cost or market value on a
first in first out basis.
(c) STATEMENT OF BALANCE DUE. Within 15 days after the Closing
Date, the Shareholder a proposed statement (the "Statement") of the
post closing payments provided for in Sections 1.6, together with a
reasonably detailed basis for each such item. Within 15 days
thereafter, the Purchaser shall present the Shareholder with a written
statement of its proposed changes thereto, if any, together with a
reasonably detailed basis for each such change. All calculations by the
Purchaser and the Shareholder hereunder shall be in accordance with
GAAP. If the Purchaser fails to present the Shareholder with its
proposed changes within 15 days, the items reflected in the Statement
shall be final. The Purchaser and the Shareholder shall negotiate in
good faith to resolve promptly any disagreement regarding the
Purchaser's proposed changes. If they are unable to agree, either party
may refer the dispute to the Denver, Colorado office of
PricewaterhouseCoopers LLP, a nationally recognized accounting firm or
mutually agreed upon Third Party (the "Third Party"), for resolution,
and the determination by the Third Party with respect to each item in
dispute shall be conclusive and binding on the parties. All fees and
expenses billed by the Third Party in connection with the resolution of
disputes under this Section 1.6 shall be borne one-half by the Company
and one-half by the Purchaser.
1.5 ACCOUNTS RECEIVABLE (OVER 60 DAYS OLD). At Closing, Purchaser will
discontinue supplying products to any customer of the Business who has an
outstanding account balance more than 60 days old as of the Closing Date, unless
Purchaser elects to continue supplying said customer (a "Retained Account"), in
which case the Purchaser shall serve as the collection agent for and/or shall
pay the Shareholder in accordance with the remaining provisions of this Section
1.7. All amounts paid on the Retained Account by the delinquent customer shall
be applied on the basis of age to the oldest outstanding invoice first.
Purchaser shall promptly remit to Shareholder all collections from a Retained
Account that relates to invoices over 60 days old as of the Closing Date. If any
amount relating to invoices over 60 days old as of the Closing Date remains
unpaid by the Retained Account 30 days after the Closing Date, Purchaser shall
pay to the Shareholder the entire unpaid balance and Shareholder shall have no
further rights in the Retained Account.
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1.6 ASSIGNMENT OF CONTRACTS AND LICENSES. To the extent that the
assignment of any contract or license to the Purchaser is not permitted without
the consent of the other party or parties to such contract or license, this
Agreement shall constitute an agreement to assign the same only if consent is
obtained. The Shareholder shall use commercially reasonable efforts to obtain
all required consents prior to the Closing and Purchaser shall cooperate in
those efforts as may be reasonably required. If any required consent is not
obtained prior to the Closing, and if the Purchaser and Shareholder nonetheless
waive the applicable closing conditions and elect to proceed with the Closing,
this Agreement shall not be construed as an agreement to assign the underlying
contract or license; however, the Shareholder shall continue to use commercially
reasonable efforts to obtain any such consent after the Closing and, at the
Purchaser's request, shall cooperate with the Purchaser in any reasonable
arrangement designed to provide the Purchaser the benefits under such contracts
or license.
1.7 COMPUTER SERVICES AGREEMENT. At Closing, if requested by Purchaser,
the parties will enter into a computer services agreement attached as Schedule
1.7.
1.8 MANAGEMENT AGREEMENT. Notwithstanding any of the covenants and
agreements in this Article I, the Purchaser shall have the option to enter into
a management agreement with the Shareholder. The management agreement will call
for Shareholder to continue to operate the business relating to the Assets in
the name of Meteor Marketing, Inc. During the period of time when Shareholder
operates the business, the current employees of the business will continue to be
employees of Shareholder; Shareholder will continue to own and invoice
customers; the Customers Accounts Receivable and Inventory will remain the
property of Shareholder; and the Contracts, insurance policies, Licenses and
Assets will remain in the name of the Shareholder.
The Shareholder shall charge $5,000 per month for accounting services.
Purchaser shall be entitled to all net profits generated by the business during
the period when Shareholder manages the business. If Purchaser elects to have
Shareholder manage the business, then a separate management agreement shall be
executed by the parties hereto, and paragraphs 1.4, 1.5, and 1.6 shall not be
applicable on the Closing Date. The customers will be transferred to the
Purchaser and paragraphs1.4, 1.5 and 1.6 shall become applicable at the time
that the management agreement terminates.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHAREHOLDER
As an inducement to the Purchaser to enter into this Agreement, the
Company and the Shareholder hereby represents and warrants to Purchaser that:
2.1 ORGANIZATION. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of New Mexico, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do
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business and is in good standing in each of the states where its business
requires qualification.
2.2 CAPITAL. The authorized capital stock of the Company consists of
1,000,000 shares common stock, $.01 par value, of which 1,000,000 shares of
common stock are issued and outstanding including -0- shares that are currently
held in the treasury of the Company. All of the issued and outstanding shares of
the Company are duly and validly issued, fully paid, and non-assessable. There
are no outstanding subscriptions, options, rights, warrants, debentures,
instruments, convertible securities, or other agreements or commitments
obligating the Company, or any subsidiary to issue or to transfer from treasury
additional shares of its capital stock. Except for the common stock outstanding,
there are no other equity securities of the Company. No taxes or other payments
to governmental authorities will be due from the Purchaser upon transfer of the
Common Stock as contemplated by this Agreement.
2.3 CORPORATE BOOKS AND RECORDS. The minute books of the Company
contain accurate records of all meetings and accurately reflect all other
actions taken by the Board of Directors and the shareholders of the Company.
Complete and accurate copies of all such minute books and of the stock register
of the Company have been made available by the Company for inspection by the
Purchaser. At the Closing, all of those books and records will be in the
possession of the Company.
2.4 SUBSIDIARIES. The Company does not have any subsidiaries or own any
interest in any other enterprise, except as described in Exhibit 2.4 attached
hereto.
2.5 DIRECTORS AND OFFICERS. Exhibit 2.5 to this Agreement contains the
names and titles of all directors and officers of the Company.
2.6 FINANCIAL STATEMENTS. Exhibit 2.6 to this Agreement includes true
and complete copies of the unadited balance sheet of the Company for the fiscal
periods ended December 31, 2000 and 2001. Prior to Closing an unaudited balance
sheet as of October 31, 2002, shall be delivered to Purchaser and be included as
part of Exhibit 2.6 (both sets of financial statements are hereinafter referred
to as the "The Company Financial Statements"). Except as set forth in Exhibit
2.6, the Company Financial Statements shall have been prepared in accordance
with generally accepted accounting principles and practices of the United States
(hereinafter referred to as "GAAP"). Exhibit 2.6 sets forth certain year-end
adjustments and tailoring transactions, which will be made and entered into to
facilitate this Agreement. As revised by such adjustments and tailoring
transactions, the Company Financial Statements are true, accurate and complete,
and fairly present the financial position of the Company as of the dates and for
the periods mentioned therein.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. As of the respective dates of
the Financial Statements included in Exhibit 2.6 and except for possible
environmental issues, the Company did not have any material debt, liability, or
obligation of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, that is not reflected in the Financial
Statements. As of the Closing Date, the Company does not have any material
liabilities not disclosed in the Company Financial Statements, other than as
listed on Exhibit 2.7. For purposes of this Section 2.7, a material liability
shall mean a liability of $10,000 or more. Notwithstanding the definition of
material liability in the preceding sentence, total undisclosed liabilities do
not exceed $25,000.
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2.8 TAXES. To the best knowledge and belief of Shareholder, within the
times and in the manner prescribed by law, the Company has filed all tax returns
required by law and has paid all taxes, assessments and penalties due and
payable in the normal course of its business. To the best knowledge and belief
of Shareholder, the provisions for taxes, if any, reflected in the Company
Financial Statements, are reasonably adequate for taxes for the periods ending
on the date of such financial statements and for all prior periods, whether or
not disputed.
2. 9 COMPLIANCE WITH LAWS. To the best of Shareholder's knowledge and
belief, the Company is in compliance in all material respects with, and is not
in violation of, applicable federal, state, or local statutes, laws or
regulations affecting its properties or the operation of its business.
2.10 LITIGATION. Except as shown on Exhibit 2.10 attached hereto, (1)
the Company is not a party to any suit, action, arbitration, or legal,
administrative or other proceeding, or governmental investigation pending or
threatened against or affecting the Company or its business, assets or financial
condition (hereinafter referred to as "Actions"); (2) the Company is not in
default with respect to any order, writ, injunction or decree of any federal,
state, local or foreign court, department, agency or instrumentality applicable
to them; (3) the Company is not engaged in any lawsuits to recover monies due to
it.
2.11 AUTHORITY. The Board of Directors of the Company has authorized
the execution of this Agreement and the consummation of the transactions
contemplated herein, and the Company and Shareholder have full power and
authority to execute, deliver and perform this Agreement and this Agreement is a
legal, valid and binding obligation of the Company and Shareholder, and is
enforceable in accordance with its terms.
2.12 ABILITY TO CARRY OUT OBLIGATIONS. To the best of the Shareholder's
knowledge and belief and except as shown on Exhibit 2.12 attached hereto, the
execution and delivery of this Agreement by the Company and Shareholder and the
performance by the Company and Shareholder of their obligations hereunder will
not cause, constitute or conflict with or result in (a) any breach or violation
of any of the provisions of or constitute a default under any license,
indenture, mortgage, charter, instrument, articles of incorporation, by-laws, or
other agreement or instrument to which the Company is a party, or by which it
may be bound, nor will any consents or authorizations of any party other than
those hereto be required, (b) an event that would permit any party to any
agreement or instrument to terminate such agreement or instrument or to
accelerate the maturity of any indebtedness or other obligation of the Company,
or (c) an event that would result in the creation or imposition of any lien,
charge, or encumbrance on any asset of the Company
2.13 VALIDITY OF THE COMPANY SHARES. The shares of the Company Common
Stock to be delivered to Purchaser pursuant to this Agreement, when transferred
in accordance with the provisions of this Agreement, will be duly authorized
validly issued, fully paid and non-assessable; and free and clear of all liens,
claims and encumbrances.
2.14 ASSETS. The Company has good and marketable and insurable title to
all its property and such property is not subject to any liens, claims and/or
encumbrances other than those related to the liabilities disclosed in
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Exhibit 2.6. Exhibit 2.14 hereto lists all plant property and equipment of the
Company with an individual value of $20,000 or more.
2.15 MATERIAL CONTRACTS. Exhibit 2.15 describes the material contracts
and agreements of the Company and the business (such contracts and agreements
described, being collectively referred to as "Material Contracts"). The Company
will deliver on or about the Closing Date correct and complete copies of all
Material Contracts.
2.16 EMPLOYEES. With respect to the Employees of the Shareholder that
are located in New Mexico, except as disclosed in Exhibit 2.17 attached hereto,
there are no collective bargaining, bonus, profit sharing, severance,
indemnification, compensation or other agreements, trusts, funds, plans or
arrangements maintained by the Company or any affiliate of the Company for the
benefit of its directors, officers or employees, and there are no employment,
consulting, severance or indemnification arrangements, agreements or
understandings between any of the foregoing and the Company. The Shareholder's
employee handbook or manual and a complete description of all employee benefits,
is included as part of Exhibit 2.17 as of the effective date. All of the
Shareholder's New Mexico employees except Xxxxxxx Xxxx are at-will employees who
have no rights to severance pay.
2.17 INSURANCE. The Company has insurance policies in full force and
effect which provide for coverages which are usual and customary in its business
as to amount and scope, and are adequate to protect the Company against any
reasonably foreseeable risk of loss unless a management agreement is entered
into between the parties as described in paragraph 1.10. Such policies will not
remain in full force and effect subsequent to Closing. Exhibit 2.21 attached
hereto identifies each of the Company's insurance policies, indicating the
carrier, amount of coverage, annual premium, risks covered, placing broker or
agent, and period through which the policy is paid up and other relevant
information as to each.
2.18 TITLE TO AND UTILIZATION OF PROPERTIES. Exhibit 2.18 attached
hereto lists all of the Company owned and leased properties and any leases or
properties included as Assets. Except as disclosed on Exhibit 2.18, the Company
owns fee simple, insured title to all real property owned by it and has the
unbridled right to use the same, and is not aware of any claim, notice or threat
to the effect that its right to own and use such property is subject in any way
to any challenge, claim, assertion of rights, proceedings toward condemnation or
confiscation in whole or in part, or is otherwise subject to challenge. The
Company has valid leases on its leased properties and the expiration dates of
such leases are disclosed on Exhibit 2.18.
2.19 ENVIRONMENTAL AND OTHER PERMITS AND LICENSES, RELATED MATTERS.
(a) To Shareholder's best knowledge and belief, the Company currently
holds all the health and safety and other permits, licenses,
authorizations, certificates, exemptions and approvals of governmental
authorities (collectively, "PERMITS"), including, without limitation,
environmental permits, necessary for the current use, occupancy and
operation of each asset and property of the Company and the conduct of
its business, and all such permits and environmental permits are in
full force and effect. The Shareholder has not received any notice from
any governmental authority revoking, canceling, rescinding, materially
modifying or refusing to renew any permit or environmental permit or
providing written notice of violations under any environmental law
which have not been resolved or disclosed in Exhibit 2.19(a).
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(b) To Shareholder's best knowledge and belief, all equipment owned or
used by the Company, including, but not limited to above ground storage
tanks, underground storage tanks, and piping associated with such
tanks, is in substantial compliance with all applicable Permits and
Environmental Laws including the Federal and State 1998 underground
storage tank requirements, and can be operated in the ordinary course
of business in substantial compliance with all applicable Permits and
Environmental Laws.
(c) Except as disclosed in Exhibit 2.19(a) and to the Shareholder's
best knowledge and belief, (i) the Company has reported all Releases of
Hazardous Material in accordance with Environmental Laws; (ii) the
Company has not Released any Hazardous Materials, and is not
responsible or liable for any Release of Hazardous Materials, which
must be remediated under applicable Environmental Law (including, but
not limited to, any Release which results in the presence of Hazardous
Materials in the environment in quantities or amounts that exceed
remediation action levels specified by regulation or by governmental
policy or guideline) or that any person or entity or governmental
authority has requested or required to be remediated; (iii) the Company
has disposed of all wastes, including those containing Hazardous
Materials, in material compliance with all applicable Environmental
Laws and environmental permits; and (iv) the Company has not
transported or arranged for the transportation of any Hazardous
Materials to any location that is listed or proposed for listing on the
National Priorities List under CERCLA or on the CERCLIS or any
analogous state list or which is the subject of any environmental claim
(d) To Shareholder's best knowledge and belief, Exhibit 2.19(d) sets
forth the age, contents or former contents of any storage tanks located
on the premises owned or operated by the Company. Except as set forth
in Exhibit 2.19(d) the Company has not owned or operated any
underground storage tanks as defined in the Resource Conservation and
Recovery Act ("RCRA").
(e) To the best knowledge and belief of Shareholder, there are no
wastes, drums or containers disposed of or buried on, in or under the
ground or any surface waters located on the premises currently or
previously owned or operated by the Company.
(f) Certain capitalized terms used in this Section 2.19 are defined as
follows:
HAZARDOUS MATERIALS - means (a) oil, petroleum and petroleum products,
radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other
equipment that contain polychlorinated biphenyls, and radon gas, (b)
any other chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under any
applicable Environmental Law, and (c) any other chemical, material or
substance exposure to which is regulated by any governmental authority.
ENVIRONMENTAL LAWS - means any law including but not limited to any
federal, state, local, law, ordinance, regulation or rule now in effect
and any judicial or administrative
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interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation,
CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. xx.xx.
6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
xx.xx. 6901 et seq.; the Clean Water Act, 33 U.S.C. xx.xx. 1251 et
seq.; the Toxic Substances Control Act, 15 U.S.C. xx.xx. 2601 et seq.;
the Clean Air Act, 42 U.S.C. xx.xx. 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. xx.xx. 300f et seq.; the Atomic Energy Act, 42
U.S.C. xx.xx. 2011 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. xx.xx. 136 et seq.; and the Federal Food,
Drug and Cosmetic Act, 21 U.S.C. xx.xx. 301 et seq. and the state or
local equivalents of these laws.
RELEASE - means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, placing and
the like into or upon any land, water or air or otherwise entering into
the environment.
2.20 CUSTOMERS AND SUPPLIERS. Exhibit 2.20 lists all material customers
and suppliers which are material to the financial condition or operations of the
Company. It is understood and agreed that "material" customers and suppliers
provided for in this section are defined as customers purchasing product from
the Company in excess of $20,000 per year, and suppliers providing supplies and
merchandise to the Company in the amount of $50,000 per year.
2.21 BANK ACCOUNTS. Exhibit 2.21 sets forth the names and locations of
all banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains current accounts of any nature and
the names of all persons authorized to draw thereon or make withdrawals
therefrom.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to the Company and the Shareholder to enter into this
Agreement, the Purchaser represents and warrants to the Company and Shareholder
that:
3.1 ORGANIZATION. Purchaser is a corporation duly organized, validly
existing, and in good standing under the law of Delaware, has all necessary
corporate powers to own properties and to carry on its business as now owned and
operated by it, and is duly qualified to do business and is in good standing in
each of the states were its business requires qualification.
3.2 CAPITAL. As of the date of this Agreement all of the issued and
outstanding shares of Purchaser are duly and validly issued, fully paid and
non-assessable.
3.3 AUTHORITY. The Board of Directors of Purchaser has authorized the
execution of this Agreement and the transactions contemplated herein, and
Purchaser has full power and authority to execute, deliver and perform this
Agreement and this Agreement is the legal, valid and binding obligation of
Purchaser, and is enforceable in accordance with its terms and conditions.
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3.4 ABILITY TO CARRY OUT OBLIGATIONS. Except as described in Exhibit
3.4, the execution and delivery of this Agreement by Purchaser and the
performance by Purchaser of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any breach or violation of any of
the provisions of or constitute a default under any license, indenture,
mortgage, charter, instrument, certificate of incorporation, bylaw, or other
agreement or instrument to which Purchaser is a party, or by which it may be
bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Purchaser, or (c) an event that would result in the creation
or imposition of any lien, charge, or encumbrance on any asset of Purchaser.
3.5 DIRECTORS AND OFFICERS. Exhibit 3.5 of this Agreement contains
the names and titles of all directors and officers of Purchaser.
ARTICLE 4
COVENANTS
4.1 INVESTIGATIVE RIGHTS. The Company shall provide to Purchaser, and
its counsel, accountants, auditors, and other authorized representatives,
reasonable access to all of the Company's properties, books, contracts,
commitments, and records for the purpose of examining the same. The Company
shall furnish Purchaser with all information concerning its affairs as Purchaser
may reasonably request.
4.2 INDEMNIFICATION OF THE COMPANY AND SHAREHOLDER. Purchaser shall be
liable for and shall indemnify, defend and hold the Company and the Shareholder
and its officers, directors, affiliates, agents and the Shareholder harmless
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including
interest, penalties, and reasonable attorney fees, that they shall incur or
suffer, which result from or relate to any activities of the Company or
Purchaser subsequent to the Closing Date or which result from or relate to any
breach of, or failure by Purchaser to perform any of its representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be furnished by
Purchaser under this Agreement.
4.3 INDEMNIFICATION OF PURCHASER. The Company and Shareholder shall be
liable for and shall agree to indemnify, defend and hold Purchaser and its
officers, directors, affiliates and agents harmless against and in respect of
any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties, and
reasonable attorney fees, that it shall incur or suffer, which result from or
relate to any breach of, or failure by the Company to perform any of its
respective representations, warranties, covenants and agreements in this
Agreement or in any exhibit, schedule, certificate or other instrument furnished
or to be furnished by the Company or Shareholder under this Agreement.
4.4 ACCOUNTS PAYABLE. With regard to all accounts payable, debt,
other liabilities and accrued taxes of the Company, the business of the Company
and all of its subsidiaries, as of the
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Effective Date, Purchaser will cause such amounts to be paid according to the
payment plan and/or requirements of the creditor or taxing authority, without
extension, delinquency or other material deviation from the payment term and
plan.
4.5 SHAREHOLDER'S COOPERATION AFTER THE CLOSING, FURTHER ACTION. At
any, time and from time to time after the Closing, the Shareholder shall execute
and deliver to the Purchaser such other instruments and take such other actions
as the Purchaser may reasonably request more effectively to vest title to the
Shares in the Purchaser and, to the full extent permitted by law, to put the
Purchaser in actual possession and operating control of the Company and its
assets, properties and the business. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or advisable under applicable
laws, and execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and to consummate and
make effective the transactions contemplated hereby.
4.6 GUARANTEES. Purchaser agrees to use all reasonable efforts to
obtain the release of all of Shareholder's and its affiliates' guarantees
relating to the Company, its businesses, liabilities or the Assets. It is hereby
agreed that all such releases will be obtained within twelve months of the
Closing Date. As of the Closing Date, the Purchaser shall guaranty all of the
liabilities of GOBCO and all of the present and future liabilities relating to
the Assets and the related business. If such guarantees are obtained within six
months of the Closing, then Shareholder will assign it's interest in Xxxxxx Rio
Rancho LLC or its share of the proceeds from any sale of such interest.
4.7 PURCHASE OF THE M & M TRUCKSTOP. Purchaser agrees to purchase the M
& M Truckstop by the assumption of all liabilities related thereto. It is
understood that the permission of the mortgage holder is required and will be a
condition to Closing on the part of the Seller.
4.8 SELLER'S NONCOMPETITION. From the Closing Date until the fifth
anniversary thereof (the "Noncompete Period"), except with the Purchaser's prior
written consent, the Shareholder will not, directly or indirectly:
(a) own, manage, operate, control, finance or participate in the
ownership, management, operation, control or financing of any business
or enterprise engaged in distributing, marketing, or selling petroleum
products in New Mexico, Arizona and parts of Southern Colorado where
the Company does business (the "Noncompete Area"),
(b) call on or solicit the customers of the business for the purpose of
selling them petroleum products in the Noncompete Area or attempt in
any manner to divert or take away (including, without limitation, by
divulging to any competitor or potential competitor of the Purchaser
the name of customers of the business) all or any part of the Business
sold to Purchaser pursuant to this Agreement, and
(c) solicit for hire or offer employment to, or induce any other person
to hire or offer employment to, any employee of the Purchaser, unless
the Purchaser or the employee first terminates the employment
relationship, nor will the Shareholder induce any such employee to
terminate his or her employment with the Purchaser.
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4.9 PURCHASER'S NONCOMPETITION. From the Closing Date until the fifth
anniversary thereof (the "Noncompete Period"), except with the Seller's prior
written consent, the Purchaser will not, directly or indirectly:
(a) own, manage, operate, control, finance or participate in the
ownership, management, operation, control or financing of any business
or enterprise engaged in distributing, marketing, or selling petroleum
products in Nevada, Wyoming, and parts of Colorado where the
Shareholder does business (the "Noncompete Area"),
(b) call on or solicit the customers of the Purchaser's business for
the purpose of selling them petroleum products in the Noncompete Area
or attempt in any manner to divert or take away (including, without
limitation, by divulging to any competitor or potential competitor of
the Shareholder the name of customers of its business) all or any part
of the business sold to Shareholder pursuant to this Agreement., and
(c) solicit for hire or offer employment to, or induce any other person
to hire or offer employment to, any employee of the Seller (except
employees who are currently based in New Mexico), unless the
Shareholder or the employee first terminates the employment
relationship, nor will the Purchaser induce any such employee to
terminate his or her employment with the Seller.
4.10 EXCEPTIONS TO PURCHASER'S NONCOMPETITION. Section 4.8 and 4.9
notwithstanding, Purchaser shall not be prevented from owning and operating
business entities whose business includes the sale and distribution of petroleum
products in the Noncompete Areas, provided that the revenue derived from sales
of such products does not exceed 5% of said business entity's total revenues
4.11 REMEDIES FOR BREACH. The parties acknowledge that (i) the
provisions of Sections 4.8 and 4.9 are reasonable and necessary to protect the
legitimate interests of the Purchaser and the Seller, that any violation of said
Sections will result in irreparable injury to the Purchaser or the Seller, as
the case may be, and that damages at law would not be reasonable or adequate
compensation to the injured party for the violation, and (ii) the injured party
shall be entitled to have the provisions of Sections 4.8 and 4.9 specifically
enforced by preliminary and permanent injunctive relief without the necessity of
proving actual damages and without posting bond or other security, as well as to
have an equitable accounting of all earnings, profits and other benefits arising
out of the violation. If the provisions of 4.8 and 4.9 should ever be deemed to
exceed the time, geographic, product or other limitations permitted by
applicable law, then such provisions shall be deemed reformed to the maximum
time, geographic, product or other imitations permitted by law. In the event of
a breach of one or more of the covenants contained in Sections 4.8 and 4.9, the
Noncompete Period binding upon the party in breach shall xxxxx during the time
of such violation and shall not continue to run until such violation has been
fully and finally cured.
4.12 COOPERATIVE MARKETING Subject to relevant laws, Purchaser agrees
to work together and cooperate with Shareholder in the marketing of their
respective products and pool volumes where possible to get the lowest rates from
suppliers.
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4.13 ENVIRONMENTAL SERVICES. It is agreed that the Shareholder, through
Innovative Solutions and Technologies, Inc. has the ability to provide the
environmental services necessary to attempt to clean up the contaminated sites
owned by GOBCO. It is agreed that Shareholder will have Innovative Solutions and
Technologies, Inc. provide such services to GOBCO and request the states of New
Mexico and Colorado to reimburse GOBCO for such services
4.14 CFN CONTRACT WITH NETWORK FUEL CORP. Purchaser agrees to execute
the CFN Agreement attached hereto as exhibit 4.14.
ARTICLE 5
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE
5.1 CONDITIONS. Purchaser's obligations hereunder shall be subject to
the satisfaction, at or before the Closing, of all the conditions set forth in
this Article 5. Purchaser may waive any or all of these conditions in whole or
in part without prior notice; so long as such waiver is in writing; and
provided, however, that no such waiver of a condition shall constitute a waiver
by Purchaser of any other condition or any of Purchaser's other rights or
remedies, at law or in equity, if the Company and Shareholder shall be in
default of any of their representations, warranties, or covenants under this
Agreement.
5.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by the Company and Shareholder in
this Agreement or in any written statement that shall be delivered to Purchaser
by the Company under this Agreement shall be true and accurate when made and on
and as of the Closing Date with the same force and affect as if made at the
Closing.
5.3 PERFORMANCE. Purchaser shall be reasonably satisfied that the
Company and Shareholder shall have performed, satisfied, and complied with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied with by it, on or before the Closing Date.
5.4 ABSENCE OF LITIGATION. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against any party hereto on or before the Closing Date.
5.5 DIRECTORS OF THE COMPANY. Effective on the Closing Date the Board
of Directors of the Company shall be reorganized and be made up of individuals
named by Purchaser.
5.6 CLOSING DOCUMENTS. The Company and the Shareholder shall be
prepared to deliver the closing documents set forth in Article 7 of this
Agreement.
ARTICLE 6
CONDITIONS PRECEDENT TO SHAREHOLDER'S PERFORMANCE
6.1 CONDITIONS. The Shareholder's obligations hereunder shall be
subject to the satisfaction, at or before the Closing, of all the conditions set
forth in this Article 6. The Shareholder
may waive any or all of these conditions in whole or in part without prior
notice; so long as such waiver is in writing; and provided, however, that no
such waiver of a condition shall constitute a waiver by the Shareholder of any
other condition of or any of the Shareholder's rights or remedies, at law or in
equity, if Purchaser shall be in default of any of its representations,
warranties, or covenants under this Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by Purchaser in this Agreement or
in any written statement that shall be delivered to the Shareholder by Purchaser
under this Agreement shall be true and accurate on and as of the Closing Date as
though made at that time.
6.3 PERFORMANCE. Purchaser shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it, on or before the Closing Date.
6.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transactions
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Purchaser on or before the Closing Date.
6.5 CONSENTS. All consents and authorizations shall be obtained from
lenders and other necessary parties.
ARTICLE 7
CLOSING
7.1 Closing. The Closing of this transaction shall be held at the
offices of the Shareholder on December 27, 2002, or as soon thereafter as
reasonably practicable but no later than December 31, 2002, or such other place
as shall be mutually agreed upon, and on such date as shall be mutually agreed
upon by the parties.
(a) Purchaser shall deliver a certified or cashier's check for the
Purchase Price to the Shareholder.
(b) The Shareholder shall present the certificates representing his shares
of the Company being sold to Purchaser, and such certificates will be
duly endorsed; and
(c) Purchaser shall deliver an officer's certificate, dated the Closing
Date, stating that all representations, warranties, covenants and
conditions set forth in this Agreement on behalf of Purchaser are true
and correct as of, or have been fully performed and complied with by,
the Closing Date.
(d) Purchaser shall deliver a signed consent and/or Minutes of its
Directors approving this Agreement and each matter to be approved by
the Directors of Purchaser under this Agreement. Such Minutes shall be
certified by an Officer of Purchaser.
(e) The Shareholder shall deliver a certificate, dated the Closing Date,
stating that all representations, warranties, covenants and conditions
set forth in this Agreement are true and correct as of, or have been
fully performed and complied with by, the Closing Date.
12
(f) The Company shall deliver a signed Consent or Minutes of the Directors
of the Shareholder and the Company approving this Agreement. Such
Minutes shall be certified by an officer of the Shareholder and the
Company.
(g) Each party shall deliver such other documents or information required
to be furnished by Closing pursuant to this Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 CAPTIONS AND HEADINGS. The Article and paragraph/section headings
through this Agreement are for convenience and reference only, and shall in no
way be deemed to define, limit, or add to the meaning of any provision of this
Agreement.
8.2 NO ORAL CHANGE. This Agreement and any provision hereof, may not be
waived, changed modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
8.3 WAIVER. Except as otherwise expressly provided herein, no waiver of
any covenant, condition, or provision of this Agreement shall be deemed to have
been made unless expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants, or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions, covenants,
or conditions, (ii) the acceptance of performance of anything required by this
Agreement to be performed with knowledge of the breach or failure of a covenant,
condition, or provision hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one breach by another party shall
be construed as a waiver with respect to any other or subsequent breach.
8.4 ENTIRE AGREEMENT. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings.
8.5 CHOICE OF LAW. This Agreement and its application shall be governed
by the laws of the State of Colorado.
8.6 COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.7 NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of' receipt if served personally on the party to whom notice
is to be given, by telecopy or telegram, or mailing if mailed to the party to
whom notice is to be given, by first class mail, registered or certified,
postage prepaid, and properly addressed as follows:
Purchaser: NEW MEXICO MARKETING, INC.
X.X. XXX 0000
XXXXXXXXXX, XX 00000
ATTENTION: XXXXXX XXXXXX
13
Shareholder: METEOR MARKETING, INC.
0000 XXXXX XXXXXX, XXXXX 000
XXXXXX, XXXXXXXX 00000
ATTENTION: XXXXX XXXXXXXXX
The Company: XXXXXX OIL & BUTANE CO., INC.
0000 XXXXX XXXXXX, XXXXX 000
XXXXXX, XX 00000
Attention: Xxxxx Xxxxxxxxx
8.8 BINDING EFFECT. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.
8.9 MUTUAL COOPERATION. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
8.10 BROKERS. Each of the parties hereto shall indemnify and hold the
other harmless against any and all claims, losses, liabilities or expenses which
may be asserted against it as a result of its dealings, arrangements or
agreements with any broker, finder or person.
8.11 ANNOUNCEMENTS. Purchaser, Shareholder and the Company will consult
and cooperate with each other as to the timing and content of any announcements
of the transactions contemplated hereby to the general public or to employees,
customers or suppliers. Except to the extent that the parties consent in writing
otherwise, no party to this Agreement shall make, or cause to be made, any press
release or public announcement in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media. Nevertheless,
the parties agree that the Shareholder or an affiliate of the Shareholder may
make such disclosure (on Form 8-K, by press release or otherwise) regarding the
terms of this Agreement and the transactions contemplated hereby as it deems
necessary to comply with applicable securities laws or the rules and regulations
of the SEC or NASDAQ, including a press release following the execution of this
Agreement.
8.12 EXPENSES. Except as specifically provided in this Agreement, all
direct costs and expenses including legal, and any other out-of-pocket expenses
incurred by Shareholder, in connection with this transaction, shall be paid by
the Shareholder. All costs and expenses including legal, accounting and any
other out-of-pocket expenses incurred by the Purchaser, in connection with this
transaction, shall be paid by the Purchaser.
8.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion, or other writing providing for in
it, shall survive the Closing for a period of one year irrespective of any
investigation made by or on behalf of any party.
8.14 ASSIGNMENT. This Agreement may not be assigned by operation of Law
or otherwise by the Shareholder, the Company or the Purchaser.
14
AGREED TO AND ACCEPTED as of the date first above written.
PURCHASER: NEW MEXICO MARKETING, INC. SHAREHOLDER: METEOR MARKETING, INC.
By ____________________________ ________________________________
COMPANY: XXXXXX OIL & BUTANE CO., INC.
By _____________________________
15
EXHIBIT 1.1
ASSETS AND EXCLUDED ASSETS
THE ASSETS SHALL INCLUDE THE FOLLOWING:
The Common Stock and all of the following Assets not owned by GOBCO,
but necessary for the business of GOBCO:
a. All tanks, machinery, tools and equipment (including plant and
office equipment);
b. the business, operations, and goodwill of the business as a going
concern, including all customer and supplier lists, manuals,
drawings, specifications, instructions and other records, files
(including copies of personnel files of any employees of
Shareholder hired by the Purchaser) and correspondence relating
to GOBCO or the Assets (as defined herein).
c. all rights of the Shareholder under the Contracts listed in
Exhibit 2.15 that are being assumed by the Purchaser (including
all related customer deposits)
d. all rights of the Shareholder under express or implied warranties
from vendors relating to the Assets; and
e. all leased equipment listed on Schedule 2.22 subject to
assignment of exiting leases.
Notwithstanding the foregoing, the Assets do not include the following (the
"Excluded Assets") (i) cash or cash equivalents held by the Shareholder; (ii)
any rights that accrue or will accrue to the Shareholder under this Agreement
(iii) and any rights that relate to the Excluded Assets or the Excluded
Liabilities; (iv) any rights Shareholder may have to xxx Conoco, Inc. relating
in any way to prior contracts between Shareholder and Conoco, Inc. and its
affiliates; and (v) any trucks trailer, tanks, equipment., inventory or
customers located outside New Mexico, except for assets used in Southern
Colorado including the M&M Truckstop located in Cortez, Colorado.
16
EXHIBIT 2.4
SUBSIDIARIES
B Capco Monument LLC
B El Boracho, Inc.
B Coors Pyramid LLC
B Bloomfield Pyramid LLC
17
EXHIBIT 2.5
DIRECTORS AND OFFICERS OF THE COMPANY
Xxxxx Xxxxxxxxx President
Xxxxxxx Xxxxx Secretary
Xxxx Xxxx Treasurer
Xxxxx Xxxxxxxxx Director
18
EXHIBIT 2.6
FINANCIAL STATEMENTS
See attached.
19
EXHIBIT 2.7
UNDISCLOSED LIABILITIES
None -- See Financial Statements
20
EXHIBIT 2.10
LITIGATION
GOBCO is in default relating to the notes and agreements with the Xxxxxx Family
Investment Limited Partnership and the Purchaser understands that while Meteor
Marketing, Inc. will use reasonable efforts to make all payments required to be
made by Meteor Marketing, Inc. prior to the Effective Date, such payments may
not be made on a timely basis.
21
EXHIBIT 2.12
ABILITY TO CARRY OUT OBLIGATIONS
This transaction will require the consent of Xxxxx Fargo Bank.
22
EXHIBIT 2.14
ASSETS
See attached.
23
EXHIBIT 2.15
MATERIAL CONTRACTS
A. Meteor Marketing, Inc. Supply Agreements
(SEE ATTACHED)
24
EXHIBIT 2.16
EMPLOYEES
See attached employment agreement with Xxxxxxx Xxxx. It is understood and agreed
that, unless the Purchaser or the Company hires Xxxxxxx Xxxx after the Closing
Date, Purchaser will not be responsible for liabilities related to that
employment contract.
25
EXHIBIT 2.17
INSURANCE
See attached policies.
26
EXHIBIT 2.18
TITLE TO AND UTILIZATION OF PROPERTIES
See Attached.
27
EXHIBIT 2.19
ENVIRONMENTAL AND OTHER PERMITS AND LICENSES
2.19(a) Environmental and Other Permits and Licenses: No permits or licenses
have been revoked and all releases have been reported.
2.19(d) Age, Contents or Former Contents of Any Storage Tanks Located on
Premises Owned or Operated by Company. (see attached)
28
EXHIBIT 2.20
CUSTOMERS AND SUPPLIERS LISTS
See attached.
29
EXHIBIT 2.21
BANK ACCOUNTS
See attached.
30
EXHIBIT 3.4
ABILITY TO CARRY OUT OBLIGATIONS
None.
31
EXHIBIT 3.5
DIRECTORS AND OFFICERS OF PURCHASER
Xxxxxx Xxxxxx Director and Officer
