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EXHIBIT 2.6
ASSET PURCHASE AGREEMENT
DATED DECEMBER 6, 1996
to be effective as of July 1, 1996
BY AND AMONG
XXXXXX INDUSTRIES, INC.,
BOSCO FISHING AND RENTAL TOOLS, INC.
AND
THE SOLE SHAREHOLDER OF
BOSCO FISHING AND RENTAL TOOLS, INC.
COVERING THE PURCHASE OF
ALL OF THE ASSETS OF
BOSCO FISHING AND RENTAL TOOLS, INC.
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TABLE OF CONTENTS
1. GENERAL DEFINITIONS
1.1 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 Best Knowledge . . . . . . . . . . . . . . . . . . . . . . . 1
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1.3 Governmental Authority . . . . . . . . . . . . . . . . . . . 1
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1.4 Governmental Requirement . . . . . . . . . . . . . . . . . . 1
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1.5 Material Adverse Effect . . . . . . . . . . . . . . . . . . 2
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1.6 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.7 Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE
2.1 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . 2
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2.2 Delivery and Endorsement of Certificates . . . . . . . . . . 2
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2.3 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . 2
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3. PURCHASE PRICE
4. REPRESENTATIONS AND WARRANTIES BY SELLER
4.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . 3
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4.2 Properties, Assets and Leasehold Estates . . . . . . . . . . 3
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4.3 Financial Statements . . . . . . . . . . . . . . . . . . . . 4
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4.4 Events Since Balance Sheet Date . . . . . . . . . . . . . . 4
-------------------------------
4.5 Inventories . . . . . . . . . . . . . . . . . . . . . . . . 4
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4.6 Accounts Receivable . . . . . . . . . . . . . . . . . . . . 4
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4.7 Taxes and Governmental Returns . . . . . . . . . . . . . . . 5
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4.8 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . 5
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4.9 Contracts and Agreements . . . . . . . . . . . . . . . . . . 5
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4.10 Intangible Property . . . . . . . . . . . . . . . . . . . . 5
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4.11 Suits, Actions and Claims . . . . . . . . . . . . . . . . . 6
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4.12 Insurance Policies . . . . . . . . . . . . . . . . . . . . . 6
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4.13 Licenses and Permits; Compliance with Governmental
--------------------------------------------------
Requirements . . . . . . . . . . . . . . . . . . . . . . . . 6
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4.14 Authorization . . . . . . . . . . . . . . . . . . . . . . . 6
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4.15 Environmental Protection Laws . . . . . . . . . . . . . . . 6
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4.16 Brokers and Finders . . . . . . . . . . . . . . . . . . . . 6
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4.17 Customer List . . . . . . . . . . . . . . . . . . . . . . . 7
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4.18 Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . 7
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4.19 Liabilities, Debts and Obligations . . . . . . . . . . . . . 7
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5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
5.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . 7
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5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . 7
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5.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . 7
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6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNITIES, GUARANTEES,
REPRESENTATIONS AND WARRANTIES OF SELLER
7. COVENANTS OF SELLER PRIOR TO CLOSING DATE
7.1 Access to Information . . . . . . . . . . . . . . . . . . . 8
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7.2 General Affirmative Covenants . . . . . . . . . . . . . . . 8
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7.3 General Negative Covenants . . . . . . . . . . . . . . . . . 8
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7.4 No Transfer of the Assets . . . . . . . . . . . . . . . . . 9
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7.5 Approvals and Consents . . . . . . . . . . . . . . . . . . . 9
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8. CONDITIONS TO OBLIGATIONS OF PURCHASER
8.1 Accuracy of Representations and Warranties and Fulfillment
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of Covenants . . . . . . . . . . . . . . . . . . . . . . . . 9
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8.2 No Governmental Actions . . . . . . . . . . . . . . . . . . 10
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8.3 No Material Adverse Effect . . . . . . . . . . . . . . . . . 10
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8.4 Board of Directors Approval . . . . . . . . . . . . . . . . 10
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8.5 Corporate Approval . . . . . . . . . . . . . . . . . . . . . 10
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8.6 Employment Agreement . . . . . . . . . . . . . . . . . . . . 10
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9. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
9.1 Accuracy of Representations and Warranties and Fulfillment
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of Covenants . . . . . . . . . . . . . . . . . . . . . . . . 10
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10. INDEMNITY BY SELLER
10.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 10
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10.2 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . 11
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10.3 Right of Seller to Participate in Defense . . . . . . . . . 11
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10.4 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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11. NON-COMPETITION AGREEMENT
12. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
13. EXPENSES
14. NOTICES
15. REMEDIES FOR BREACH
15.1 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . 13
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16. GENERAL PROVISIONS
16.1 Governing Law; Interpretation; Section Headings . . . . . . 13
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16.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . 13
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16.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 14
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16.4 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 14
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16.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 14
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16.6 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . 14
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16.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 14
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16.8 Telecopy Execution and Delivery . . . . . . . . . . . . . . 14
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17. TERMINATION
17.1 Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . 14
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17.2 Failure of Conditions . . . . . . . . . . . . . . . . . . . 15
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17.3 Failure to Close . . . . . . . . . . . . . . . . . . . . . . 15
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LIST OF SCHEDULES
SCHEDULE 2.1 - Purchase and Sale being substantially all of the
assets of Target to be transferred
to the Purchaser at the Closing.
SCHEDULE 4.1 - Incorporation being copies of the Articles of
Incorporation and bylaws of Target.
SCHEDULE 4.3 - Financial Statements being copies of financial statements
for Target.
SCHEDULE 4.5 - Inventories being a true and complete list of
the current inventory of Target as
reflected on the Reference Balance
Sheet
SCHEDULE 4.6 - Accounts Receivable being a true and complete list of
the accounts receivable written off
in the past 2 years and an aging of
accounts receivable.
SCHEDULE 4.8 - Employee Benefit Plans employee benefit plans (including,
but not limited to, pension plans
and health or welfare plans).
SCHEDULE 4.9 - Contracts and Agreements being a true and complete list of
all of the material contracts,
agreements, leases, licenses, plans,
arrangements or commitments, written
or oral, to which Target is a party
SCHEDULE 4.10 - Intangible Property being a true and complete list of
all intangible assets being patents
now owned or to be acquired by
Target prior to the Closing Date and
to include inventions, trademarks,
trade names, brand names or
copyrights.
SCHEDULE 4.11 - Suits, Actions and Claims being a complete list of all suits,
actions, claims, inquiries or
investigations by any Person, or any
legal, administrative or arbitration
proceedings in which Target is
engaged or which are pending.
SCHEDULE 4.12 - Insurance Policies being a list of all insurance
policies (specifying the insurer,
the amount of coverage, the type of
insurance and the policy number)
maintained by Target on its
properties, assets, business and
personnel.
SCHEDULE 4.13 - Licenses and Permits;
Compliance with Governmental Requirements being a complete list of all
licenses and permits necessary for
the conduct of Target's business.
SCHEDULE 4.17 - Customer List being a complete list of all
customers of Target to which Target
has sold or provided products or
services during the past two years.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 6th day of December, 1996, to be effective as of July 1, 1996 by and
among Bosco Fishing and Rental Tools, Inc., a Mississippi corporation
("Target"), Xxxxxx Xxxxx, being the sole shareholder of Target ("Seller"), and
Xxxxxx Industries, Inc., a Delaware corporation ("Purchaser").
W I T N E S S E T H :
WHEREAS, Target desires to sell substantially all of its assets to
Purchaser pursuant to this Agreement as hereinafter provided; and
WHEREAS, Purchaser desires to acquire substantially all of the assets of
Target pursuant to this Agreement as hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. GENERAL DEFINITIONS. For purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
1.1 Affiliate. "Affiliate" of any Person shall mean any Person
controlling, controlled by or under common control with such Person.
1.2 Best Knowledge. "Best Knowledge" shall mean both what a Person
knew as well as what the Person should have known had the person exercised
reasonable diligence. When used with respect to a Person other than a natural
person, the term "Best Knowledge" shall include matters that are reasonably
known to the directors, officers, partners, trustees, administrators,
executors, managers, employees, consultants and agents of the Person.
1.3 Governmental Authority. "Governmental Authority" shall mean any
and all foreign, federal, state or local governments, governmental
institutions, public authorities and governmental entities of any nature
whatsoever, and any subdivisions or instrumentalities thereof, including, but
not limited to, departments, boards, bureaus, commissions, agencies, courts,
administrations and panels, and any divisions or instrumentalities thereof,
whether permanent or ad hoc and whether now or hereafter constituted and/or
existing.
1.4 Governmental Requirement. "Governmental Requirement" shall mean
any and all laws (including, but not limited to, applicable common law
principles), statutes, ordinances, codes, rules, regulations, interpretations,
guidelines, directions, orders,
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judgments, writs, injunctions, decrees, decisions or similar items or
pronouncements, promulgated, issued, passed or set forth by any Governmental
Authority.
1.5 Material Adverse Effect. "Material Adverse Effect" shall mean a
material adverse effect on the business, financial condition, operation,
performance or prospects of the Target.
1.6 Person. "Person" shall mean any natural person, any Governmental
Authority and any entity, the separate existence of which is recognized by any
Governmental Authority or Governmental Requirement, including, but not limited
to, corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or otherwise.
1.7 Schedule. "Schedule" shall mean Schedules to this Agreement,
unless otherwise stated, and the Schedule may be attached to the Agreement or
set forth in a separate document denoted as the Schedule to this Agreement.
1.8 Taxes. "Tax" and "Taxes" shall mean any and all income, excise,
franchise or other taxes and all other charges or fees imposed or collected by
any Governmental Authority or pursuant to any Governmental Requirement, and
shall also include any and all penalties, interest, deficiencies, assessments
and other charges with respect thereto.
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
2.1 Purchase and Sale. Subject to the terms and conditions herein
contained, Target agrees to sell, assign, transfer and deliver to Purchaser at
the Closing (as hereinafter defined) all of the assets, rights and properties
set forth and described on Schedule 2.1, being substantially all of the assets
of Target (all such assets, rights and properties being collectively referred
to herein as the "Assets"), free and clear of any liens or encumbrances (except
for liens, encumbrances or obligations, if any, expressly assumed by Purchaser
hereunder). Subject to the terms and conditions herein contained, Purchaser
agrees to purchase from Target the Assets and to pay at the Closing the
Purchase Price (as hereinafter defined) pursuant to the provisions of Section 3
below.
2.2 Delivery and Endorsement of Certificates. At the Closing, Target
shall deliver to Purchaser such deeds, bills of sale, endorsements, assignments
and other documents of transfer, conveyance and assignment valid as necessary
to transfer the Assets to Purchaser and to vest in Purchaser good and
indefeasible title to the Assets, free and clear of any liens or encumbrances
(except for liens, encumbrances or obligations, if any, expressly assumed by
Purchaser hereunder), in form and substance satisfactory to Purchaser and
Purchaser's counsel.
2.3 Closing Date. Subject to the terms and conditions herein
contained, the consummation of the transactions referred to above shall take
place (the "Closing") on
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or before December 31, 1996, at 10:00 a.m. local time, at the offices of
Purchaser in Houston, Texas, or at such other time, date and place as Purchaser
and Seller shall in writing designate (the "Closing Date").
3. PURCHASE PRICE. The consideration for the Assets shall be paid
as follows:
(a) $400,000 cash previously advanced to Seller by Purchaser;
(b) payment by Purchaser of the liabilities set forth on
Schedule 3, less $50,000 to be paid by Seller to the
limited partners of Xxxxxx Oil Service, L.P., but in no
event shall such payments by the Purchaser exceed
$500,000; and
(c) assumption by Purchaser of that certain Promissory Note
dated September 27, 1996 in the stated principal amount of
$650,000.00 between Xxxxxx Oil Service Company, L.P. and
First National Bank, Brewton, Alabama (the "Bank") to be
paid $550,000 on or before December 31, 1996 and $100,000
pursuant to a promissory note to be entered into between
Purchaser and the Bank to be due on or before December 31,
1997;
(such consideration collectively referred to herein as the "Purchase Price").
4. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller represents and
warrants to Purchaser as follows:
4.1 Incorporation. Target is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and is duly authorized, qualified and licensed under all
applicable Governmental Requirements to carry on its business in the places and
in the manner as now conducted. Target has full corporate power and lawful
authority to carry on its business as it is now being conducted and to own and
operate its assets, properties and business. The copies of the Articles of
Incorporation and bylaws of Target and all amendments thereto to date, each of
which are included in Schedule 4.1 hereto, are true, complete and correct.
4.2 Properties, Assets and Leasehold Estates. Target owns or has the
right to use all property, real or personal, tangible or intangible, utilized
in or necessary for the operation of its business with all of such property
comprising the Assets. Schedule 2.1 hereto sets forth a true and complete list
of all such property constituting the Assets as of the date hereof. Target has
good and marketable title to all the Assets, free and clear of all mortgages,
liens, pledges, conditional sales agreements, charges, easements, covenants,
assessments, restrictions and encumbrances of any nature whatsoever. The
plants, structures, equipment, vehicles and other tangible properties included
in the Assets and the tangible property leased by Target under leases included
in the Assets are in good operating condition and repair, normal wear and tear
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excepted, and are capable of being used for their intended purpose in the
business as now conducted. The Assets include all existing warranties and
service contracts with respect to any of the Assets to the extent the same are
capable of being assigned to Purchaser. During the past two years, there has
not been any significant interruption of the operation of the business due to
the breakdown or inadequate maintenance of any of the Assets. All plants,
structures, equipment, vehicles and other tangible properties included in the
Assets, and the present use of all such items, conform to any applicable
Governmental Requirement, and no notice of any violation of any such
Governmental Requirement relating to such assets or their use has been received
by Target. The Assets include all easements, rights of ingress and egress, and
utilities and services necessary for the conduct of the Business. Neither the
whole nor any portion of any real property, if any, to be conveyed to Purchaser
hereunder has been condemned or otherwise taken by any public authority, nor,
to the Best Knowledge of Seller and the Shareholders, is any such condemnation
or taking threatened or planned.
4.3 Financial Statements. Seller has delivered to Purchaser copies
of the following financial statements for Target, all of which financial
statements are included in Schedule 4.3 hereto:
(a) Unaudited Balance Sheet (the "Reference Balance Sheet") as
of April 30, 1996 (the "Balance Sheet Date"); and
(b) Statement of Income as of April 30, 1996.
All financial statements supplied to Purchaser by Seller are true and accurate
in all material respects, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated, and present fairly the financial condition and the results
of the operations of Target as of the dates and for the periods indicated
thereon. The Reference Balance Sheet reflects, as of the Balance Sheet Date,
all liabilities, debts and obligations of any nature of Target, whether
accrued, absolute, contingent or otherwise, and whether due, or to become due,
including, but not limited to, liabilities, debts or obligations on account of
Taxes to the extent such items are required to be reflected on such balance
sheet under generally accepted accounting principles consistently applied.
4.4 Events Since Balance Sheet Date. Since the Balance Sheet Date
there has not been:
(a) any material change in the financial condition or in the
properties, assets or business of Target, except normal and usual
changes in the ordinary course of business;
(b) any declaration, setting aside, or payment of any dividend
or other distribution on or in respect of the capital stock of Target,
or any direct or indirect redemption, purchase or other acquisition of
any of such stock or any
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issuance of any shares of such stock or any granting or entering into of
any option or commitment relating to any of such stock;
(c) any transaction entered into or engaged in by Target other
than transactions in the ordinary course of business; or
(d) to the Best Knowledge of Seller, any other occurrence, event
or condition that has resulted in a Material Adverse Effect (or can
reasonably be expected to result in a Material Adverse Effect) or the
properties, assets or business of Target.
4.5 Inventories. Schedule 4.5 hereto sets forth a true and complete
list of the current inventory of Target. Such inventories consist of items of
a quality and quantity usable and saleable in the normal course of business of
Target at an aggregate value at least equal to the value at which such
inventories are reflected on the Reference Balance Sheet.
4.6 Accounts Receivable. All notes and accounts receivable of Target
that are reflected on the Reference Balance Sheet or that have arisen since the
Balance Sheet Date ("Accounts Receivable") have arisen in the ordinary course
of business. All Accounts Receivable either (i) have been collected or (ii)
are collectible on the respective due dates thereof, or, if no due date is
stated with respect thereto, within 90 days of their creation in the ordinary
course of business, in each case in the aggregate recorded amounts thereof,
less the applicable reserves with respect thereto reflected on the Reference
Balance Sheet. Target has not factored or discounted or agreed to factor or
discount any Account Receivable. The values at which the Accounts Receivable
are carried reflect the accounts receivable valuation policy of Target which is
consistent with Target's past practice and in accordance with generally
accepted accounting principles consistently applied. Schedule 4.6 sets forth a
true, correct and complete list of all Accounts Receivable written off by
Seller, in whole or in part, as uncollectible during the 2 years preceding the
date hereof. Schedule 4.6 also sets forth a true, correct and complete aging
of the Accounts Receivable of Seller as of the most recent practicable date,
and, except as specifically noted on Schedule 4.6, all of such Accounts
Receivable are included in the Assets.
4.7 Taxes and Governmental Returns. Except as set forth on Schedule
3 hereto, as of the date hereof, all Tax returns, information returns and
governmental reports of every nature required by any Governmental Authority or
Governmental Requirement to be filed by Target or which include or should
include Target, ("Governmental Returns") have been filed for all periods ending
on or before the date hereof, and all Taxes shown to be due and payable on such
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Governmental Returns or on any assessments related to such Governmental Returns
have been paid, except for taxes or assessments reasonably contested by Target.
All Governmental Returns and reports and the information and data contained
therein have been properly and accurately compiled and completed, fairly
present the information purported to be shown therein, and reflect all Tax
liabilities of Target for the periods covered by such Governmental Returns and
reports. Target has no unpaid liability for any Taxes of any nature whatsoever
for any period prior to the date hereof, except for taxes or assessments
reasonably contested by Target. The charges, accruals and reserves on the
Reference Balance Sheet in respect of all accrued Taxes are adequate to provide
fully for all Taxes, if any, payable by Target with respect to periods ended on
or before the date of this Agreement.
4.8 Employee Benefit Plans. Except as set forth on Schedule 4.8
hereto, Target has no employee benefit plans (including, but not limited to,
pension plans and health or welfare plans), arrangements or understandings,
whether formal or informal.
4.9 Contracts and Agreements. Schedule 4.9 hereto sets forth a true
and complete list of all of the material contracts, agreements, leases,
licenses, plans, arrangements or commitments, written or oral, to which Target
is a party and by which any of the assets or properties of Target are in any
way bound or obligated (including all amendments, supplements and modifications
thereto) (the "Contracts").
All of the Contracts are valid, binding and in full force and effect in
accordance with their terms and conditions and there is no existing default
thereunder or breach thereof by Target, or, to the Best Knowledge of Seller, by
any other party to the Contracts. Copies of all of the documents (or in the
case of oral commitments, descriptions of the material terms thereof) relevant
to the Contracts have been delivered by Seller to Purchaser.
4.10 Intangible Property. Schedule 4.10 hereto sets forth a true and
complete list of all patents now owned or to be acquired by Target prior to the
Closing Date. Except as set forth on Schedule 4.10 hereto, the operation of
the business of Target as now conducted does not require the use of or consist
of any rights under any patents, inventions, trademarks, trade names, brand
names or copyrights, and the operation of the business of Target as presently
conducted does not violate or infringe upon any such items owned by others.
4.11 Suits, Actions and Claims. Except as set forth in Schedule 4.11
hereto, (i) there are no suits, actions, claims, inquiries or investigations by
any Person, or any legal, administrative or arbitration proceedings in which
Target is engaged or which are pending or, to the Best Knowledge of Seller,
threatened against or affecting Target or any of its properties, assets or
business, or to which Target is or might become a party, or which question the
validity or legality of the transactions contemplated hereby, (ii) no basis or
grounds for any such suit, action, claim, inquiry, investigation or proceeding
exists, and (iii) there is no outstanding order, writ, injunction or decree of
any Governmental Authority against or affecting Target or any of its
properties, assets or business. Without limiting the foregoing, neither Seller
nor any officer of Target has any knowledge of any state of facts or the
occurrence of any event forming the basis of any present claim against Target.
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4.12 Insurance Policies. Schedule 4.12 hereto contains a list of all
insurance policies (specifying the insurer, the amount of coverage, the type of
insurance and the policy number) maintained by Target on its properties,
assets, business and personnel.
4.13 Licenses and Permits; Compliance with Governmental Requirements.
Schedule 4.13 hereto sets forth a true and complete list of all licenses and
permits necessary for the conduct of Target's business. Target has complied
with all material Governmental Requirements applicable to its business and all
Governmental Requirements with respect to the distribution and sale of products
and services by it.
4.14 Authorization. Target and Seller have full legal right, power
and authority to enter into and deliver this Agreement and to consummate the
transactions set forth herein and to perform all the terms and conditions
hereof to be performed by it or him. The execution and delivery of this
Agreement by Target and the performance of the transactions contemplated herein
have been duly and validly authorized by all requisite action of Target, and
this Agreement has been duly and validly executed and delivered by Target and
Seller and is the legal, valid and binding obligation of Target and Seller,
enforceable against Seller in accordance with its terms, except as limited by
applicable bankruptcy, moratorium, insolvency or other similar laws affecting
generally the rights of creditors or by principles of equity.
4.15 Environmental Protection Laws. None of Target, its business or
its assets are now, nor have any of Target, its business or its assets been in
the past, in violation of any applicable Governmental Requirement related to
environmental protection, air pollution, hazardous materials or other similar
matters.
4.16 Brokers and Finders. No broker or finder has acted for Target or
Seller in connection with this Agreement or the transactions contemplated by
this Agreement and no broker or finder is entitled to any brokerage or finder's
fee or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Target or Seller.
4.17 Customer List. Schedule 4.17 hereto sets forth a true, correct
and complete list of all customers of Target to which Target has sold or
provided products or services during the two years immediately preceding the
date hereof.
4.18 Adverse Facts. Seller is not aware (after having made all
reasonable inquiries) of any material fact or matter not disclosed in this
Agreement or in the Schedules hereto which might reasonably affect the
willingness of a purchaser to acquire the Assets on the terms (including price)
contained herein or that might be expected to adversely affect the assets or
the business of Target after Closing.
4.19 Liabilities, Debts and Obligations. Except as set forth on
Schedule 3 attached hereto, Target has no liabilities, debts or obligations of
any nature whatsoever, whether due or to become due, and whether accrued,
absolute, contingent or otherwise, that are not disclosed on Schedule 3, the
Reference Balance Sheet or in this Agreement.
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There are no outstanding claims against Target by any person who is now or has
been an officer or employee of Target nor any dispute between Target and a
material number or class of its employees.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to Seller as follows:
5.1 Incorporation. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
5.2 Authorization. Purchaser has full legal right and corporate
power and authority to enter into and deliver this Agreement and to consummate
the transactions set forth herein and to perform all the terms and conditions
hereof to be performed by it. This Agreement has been duly executed and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser enforceable in accordance with its terms, except as limited by
applicable bankruptcy, moratorium, insolvency or other laws affecting generally
the rights of creditors or by principles of equity.
5.3 Brokers and Finders. No broker or finder has acted for Purchaser
in connection with this Agreement or the transactions contemplated by this
Agreement and no broker or finder is entitled to any brokerage or finder's fee
or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Purchaser.
6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNITIES, GUARANTEES,
REPRESENTATIONS AND WARRANTIES OF SELLER. All statements of fact contained in
this Agreement or in any written statement (including financial statements),
certificate, schedule or other document delivered by or on behalf of Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby shall be deemed representations and warranties of Seller hereunder. All
indemnities, guarantees, covenants, agreements, representations and warranties
made by Seller hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall survive the Closing, regardless of any
investigation at any time made by or on behalf of Purchaser.
7. COVENANTS OF SELLER PRIOR TO CLOSING DATE. Seller hereby
covenants and agrees that between the date of this Agreement and the Closing
Date:
7.1 Access to Information. Target and Seller shall, and Seller shall
cause Target to, afford to the officers and authorized representatives of
Purchaser access to the plants, properties, books and records of Target and
furnish Purchaser with such financial and operating data and other information
regarding the business, assets and properties of Target as Purchaser may from
time to time reasonably request, including, but not limited to, true and
correct unaudited monthly financial statements for all months ending after the
Balance Sheet Date and prior to the Closing Date.
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7.2 General Affirmative Covenants. At all times prior to the Closing
Date, Target shall, and Seller shall cause Target to:
(a) conduct its business only in the ordinary course;
(b) maintain the Assets in good working order and condition,
ordinary wear and tear excepted;
(c) perform all its obligations under agreements relating to or
affecting its business, assets, properties and rights;
(d) keep in full force and effect present insurance policies or
other comparable insurance coverage acceptable to and approved in
writing by Purchaser;
(e) duly and timely file all reports or returns required to be
filed with any Governmental Authority, and promptly pay all Taxes levied
or assessed upon it or its properties or upon any part thereof subject
to the right to contest such taxes and assessments;
(f) duly observe and conform to all laws and requirements of any
Governmental Authority relating to its assets or properties or to the
operation and conduct of its business and all covenants, terms and
conditions upon or under which any of its properties are held; and
(g) duly and timely take all actions necessary to carry out the
transactions contemplated hereby.
7.3 General Negative Covenants. At all times prior to the Closing
Date, Target shall not take, and Seller shall prohibit and prevent Target from
taking, any of the following actions without the prior written consent of
Purchaser (except with respect to subparagraph (e) below):
(a) making or approving any changes in Target's Articles of
Incorporation or other charter documents or bylaws;
(b) issuing any shares of stock or securities or any rights with
respect thereto;
(c) declaring or paying any dividend or making any distribution
in respect of Target's stock, whether now or hereafter outstanding, or
purchasing, redeeming or otherwise acquiring or retiring, directly or
indirectly, for value any shares of stock or securities of Target;
(d) without the prior written consent of Purchaser, entering
into or assuming any contract, agreement, obligation, lease, license or
commitment
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related to assets of Target, not in the ordinary course of business,
that can be expected to generate gross revenues or expenses in excess of
US $5,000;
(e) except under existing credit facilities and in the ordinary
course of business, entering into or assuming any mortgage, pledge,
conditional sale or other title retention agreement, lien, encumbrance
or charge of any kind upon any of the Assets, whether now owned or
hereafter acquired, or creating or assuming any obligation for borrowed
money, or making any loans or advances to or assuming, guaranteeing,
endorsing or otherwise becoming liable with respect to the obligations,
stock or dividends of any person, firm, association or corporation, or
purchasing or otherwise acquiring any stocks, bonds or other securities
of any person, firm, association or corporation, or selling, leasing,
abandoning or otherwise disposing of any of the Assets;
(f) engaging in any activities or transactions that might result
in a Material Adverse Effect; or
(g) merging or consolidating with any other corporation or
acquiring all or substantially all of the business or assets of any
other person, firm, association or corporation.
7.4 No Transfer of the Assets. Target shall not sell, transfer,
assign, pledge or otherwise dispose of or encumber any right, title or interest
in or to any of the Assets or enter into any agreement, trust or commitment
relating to any of the Assets.
7.5 Approvals and Consents. Seller shall, and shall cause Target to,
obtain, in writing and without penalty to Purchaser, all necessary approvals
and consents required in order to authorize, approve and consummate this
Agreement.
8. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser hereunder are, at the option of Purchaser, subject to the
satisfaction, on or prior to the Closing Date, of the following conditions (any
of which may be waived by Purchaser in its sole discretion):
8.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date. Each and all of the agreements and
covenants of Target and Seller to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed. Seller shall have
delivered to Purchaser a certificate dated the Closing Date and executed by
Seller to all such effects.
8.2 No Governmental Actions. No action or proceeding before a
Governmental Authority shall have been instituted or threatened to restrain or
prohibit the transactions contemplated by this Agreement. No Governmental
Authority shall
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have taken any other action as a result of which the management of Purchaser
reasonably deems it inadvisable to proceed with the transactions contemplated
by this Agreement.
8.3 No Material Adverse Effect. No Material Adverse Effect shall
have occurred and no material loss or damage to any of the Assets, whether or
not covered by insurance, shall have occurred since the Balance Sheet Date, and
Seller shall have delivered to Purchaser a certificate dated the Closing Date
and executed by Seller to all such effects.
8.4 Board of Directors Approval. The board of directors of
Purchaser, in its sole discretion, shall have approved this Agreement and the
consummation by Purchaser of the transactions contemplated hereby.
8.5 Corporate Approval. Seller shall have taken or caused to be
taken all necessary or desirable actions, steps and corporate proceedings
(whether by directors, shareholders or otherwise) to approve and authorize the
transfer of the Assets to Purchaser and to consummate the transactions
contemplated hereby.
8.6 Employment Agreement. Xxxxxx Xxxxx shall have executed and
delivered to Purchaser the Employment Agreement in the form attached hereto as
Exhibit A.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations
of Seller hereunder are, at his option, subject to the satisfaction, on or
prior to the Closing Date, of the following condition (which may be waived by
Seller, in his sole discretion):
9.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date. Each of the agreements and covenants of
Purchaser to be performed on or before the Closing Date shall have been
performed. Purchaser shall have delivered to Seller a certificate dated the
Closing Date and executed by Purchaser to all such effects.
10. INDEMNITY BY SELLER.
10.1 Indemnity. Seller covenants and agrees that he will indemnify,
hold harmless and defend Purchaser and Target and their respective officers,
directors, employees, agents, consultants, representatives and Affiliates
(collectively, the "Indemnified Parties"), at all times from and after the date
of this Agreement, from and against any and all penalties, demands, damages,
punitive damages, losses, liabilities, suits, costs, costs of any settlement or
judgment, claims of any and every kind whatsoever (including, without
limitation, interest and penalties thereon), and expenses (including, without
limitation, reasonable attorneys' fees) of or to any of the Indemnified Parties
("Damages"), which may now or in the future be paid, incurred or
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suffered by or asserted against the Indemnified Parties by any Person resulting
or arising from or incurred in connection with any one or more of the
following:
(a) any misrepresentation, breach of warranty or nonfulfillment
of any covenant or agreement on the part of Target or Seller under this
Agreement or from any misrepresentation in or omission from any list,
schedule, certificate or other instrument furnished or to be furnished
to Purchaser pursuant to the terms of this Agreement; and
(b) all actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including costs of court and reasonable
attorneys' fees) incident to any of the foregoing.
10.2 Notice of Claim. Purchaser agrees that upon its discovery of
facts giving rise to a claim for indemnity under the provisions of this
Agreement, including receipt by it or any Indemnified Party of notice of any
demand, assertion, claim, action or proceeding, judicial or otherwise, by any
Person with respect to any matter as to which any of the Indemnified Parties
are entitled to indemnity under the provisions of this Agreement (such actions
being collectively referred to herein as the "Claim"), Purchaser will give
prompt notice thereof in writing to Seller together with a statement of such
information respecting any of the foregoing as it shall then have; provided
that any delay in giving or failure to give such notice shall not limit
Purchaser's or Target's rights to indemnity hereunder except to the extent that
Seller is shown to have been damaged by such delay or failure.
10.3 Right of Seller to Participate in Defense. With respect to any
Claim as to which Purchaser seeks indemnity hereunder, Seller shall assume the
defense of any such proceeding, and shall have the sole discretion to settle or
defend any proceeding; provided that Purchaser shall have the right to approve
any such settlement, which approval shall not be unreasonably withheld and
Seller shall pay the fees of one firm of defense counsel unless such counsel
determines a conflict exists in which case Purchaser shall have the right to
engage separate counsel.
10.4 Payment. Seller shall promptly pay to Purchaser or such other
Indemnified Parties as may be entitled to indemnity hereunder in cash the
amount of any Damages to which Purchaser or such Indemnified Parties may become
entitled by reason of the provisions of this Agreement.
11. NON-COMPETITION AGREEMENT. For a period of two years from the
date hereof, neither Seller nor any Affiliate of Seller shall, within the State
of Mississippi, (i) compete directly or indirectly with the business engaged in
by Target as of the Closing Date, (ii) solicit directly or indirectly any of
the accounts of Target or (iii) become the employee or consultant of or
otherwise render services to, or own any interest in, any enterprise that
directly or indirectly competes with the business engaged in by Target as of
the Closing Date. For purposes of this Section 11, the term "accounts" shall
mean any Person for which Target has performed or does perform
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services or to which Target has sold or rented or does sell or rent merchandise
during the period beginning two years immediately prior to the date of this
Agreement and ending one year after the date of this Agreement.
12. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Seller recognizes and
acknowledges that they have and will have access to certain confidential
information of Target, such as lists of customers and costs and financial
information, that is valuable, special and unique property of Target. Seller
agrees that they will not disclose, and Seller will use his best efforts to
prevent disclosure by any other Person of, any such confidential information to
any Person or for any purpose or reason whatsoever, except to authorized
representatives of Purchaser.
13. EXPENSES. Whether or not the transactions contemplated hereby
are consummated, each of the parties will pay all costs and expenses of its
performance of and compliance with this Agreement.
14. NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, given by prepaid telex
or telegram or by facsimile or other similar instantaneous electronic
transmission device or mailed first class, postage prepaid, certified United
States mail, return receipt requested, as follows:
(a) If to Purchaser, at:
Xxxxxx Industries, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile No.: 000-000-0000
With a copy to:
Xxxxxxx X. Xxxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
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(b) If to Seller, at:
Bosco Fishing & Rental Tools, Inc.
P. O. Xxx 0000
Xxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile No.: 000-000-0000
provided that any party may change its address for notice by giving to the
other party written notice of such change. Any notice given under this Section
14 shall be effective (i) if delivered personally, when delivered, (ii) if sent
by telex or telegram or by facsimile or other similar instantaneous electronic
transmission device, 24 hours after sending and (iii) if mailed, 48 hours after
mailing.
15. REMEDIES FOR BREACH.
15.1 Arbitration. The parties agree that any dispute or controversy
arising out of or in connection with this Agreement or any alleged breach
hereof shall be settled by arbitration in Houston, Texas pursuant to the rules
of the American Arbitration Association. If Purchaser on the one hand and
Seller, on the other hand, cannot jointly select a single arbitrator to
determine the matter, one arbitrator shall be chosen by Purchaser on the one
hand and Seller, on the other hand (or, if either fails to make a choice, by
the American Arbitration Association on behalf of such party), and the two
arbitrators so chosen will select a third. The decisions of the single
arbitrator jointly selected by the parties, or, if three arbitrators are
selected, the decision of any two of them, will be final and binding upon the
parties and the judgment of a court of competent jurisdiction may be entered
thereon. Fees of the arbitrators and costs of arbitration shall be borne by
the parties in such manner as shall be determined by the arbitrator or
arbitrators.
16. GENERAL PROVISIONS.
16.1 Governing Law; Interpretation; Section Headings. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Texas. The section headings contained herein are for purposes of
convenience only, and shall not be deemed to constitute a part of this
Agreement or to affect the meaning or interpretation of this Agreement in any
way.
16.2 Severability. Should any provision of this Agreement be held
unenforceable or invalid under the laws of the United States of America or the
State of Texas, or under any other applicable laws of any other jurisdiction,
then the parties hereto agree that such provision shall be deemed modified for
purposes of performance of this Agreement in such jurisdiction to the extent
necessary to render it lawful and enforceable, or if such a modification is not
possible without materially altering the intentions of the parties hereto, then
such provision shall be severed herefrom for purposes of performance of this
Agreement in such jurisdiction. The validity of the
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remaining provisions of this Agreement shall not be affected by any such
modification or severance, except that if any severance materially alters the
intentions of the parties hereto as expressed herein (a modification being
permitted only if there is no material alteration), then the parties hereto
shall use commercially reasonable effort to agree to appropriate equitable
amendments to this Agreement in light of such severance, and if no such
agreement can be reached within a reasonable time, any party hereto may
initiate arbitration under the then current rules of the American Arbitration
Association to determine and effect such appropriate equitable amendments.
16.3 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No representation,
promise, inducement or statement of intention has been made by any party hereto
which is not embodied in this Agreement, and no party hereto shall be bound by
or liable for any alleged representation, promise, inducement or statement of
intention not so set forth.
16.4 Binding Effect. All the terms, provisions, covenants and
conditions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns.
16.5 Assignment. Except as specifically permitted herein, this
Agreement and the rights and obligations of the parties hereto shall not be
assigned or delegated by either party hereto without the prior written consent
of the other party hereto.
16.6 Amendment; Waiver. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, provisions, representations,
warranties, covenants or conditions hereof may be waived, only by a written
instrument executed by all parties hereto, or, in the case of a waiver, by the
party waiving compliance.
16.7 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall be binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of the parties reflected hereon as
signatories.
16.8 Telecopy Execution and Delivery. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective
for all purposes.
17. TERMINATION. This Agreement may be terminated without further
obligation of the parties, as follows:
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17.1 Mutual Consent. This Agreement may be terminated at any time
prior to Closing by mutual written consent of the parties hereto.
17.2 Failure of Conditions. This Agreement may be terminated by
either party hereto if the conditions to such party's obligations under this
Agreement are not fulfilled on or prior to the Closing Date; provided that any
such termination shall not limit the remedies otherwise available to such party
as a result of misrepresentations of or breaches by the other party.
17.3 Failure to Close. This Agreement will automatically terminate at
the end of the day on December 31, 1996, if the Closing shall not have occurred
on or before such date, unless the parties shall have otherwise agreed in
writing prior to such date. No party will be liable in damages to any other
party as a result of termination pursuant to this Section 17.3 unless the
failure of the Closing was due to the failure of such party to comply with the
terms of this Agreement or the failure of a party to close the transaction if
all conditions had otherwise been satisfied.
[signatures on next page]
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date first above written.
PURCHASER:
XXXXXX INDUSTRIES, INC.
By: /s/ XXXXX XXXXXXXXX
--------------------------
Xxxxx Xxxxxxxxx,
President and Chief
Executive Officer
TARGET:
BOSCO FISHING & RENTAL TOOLS,
INC.
By: /s/ XXXXXX XXXXX
--------------------------
Name: Xxxxxx Xxxxx
------------------------
Title: President
-----------------------
SELLER:
XXXXXX XXXXX
------------------------------
Xxxxxx Xxxxx
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