EXHIBIT 10.74
PURCHASE AND SALE OF ASSETS AGREEMENT
THIS PURCHASE AND SALE OF ASSETS AGREEMENT (the "Agreement") is executed
and delivered as of December 31, 1998, between MESA PROCESSING, INC., a Texas
corporation ("Buyer"), XXXXXX X. XXXXXXX, the sole shareholder of Buyer ("X.
Xxxxxxx"), and U S LIQUIDS OF TEXAS, INC., a Texas corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller owns certain assets relating to the operation of its fats
and oils (including yellow and xxxxx grease) collection, transportation,
processing and marketing business in the State of Texas and elsewhere (the
"Business"); and
WHEREAS, a portion of the assets of the Business relating to the marketing
and distribution of yellow and xxxxx grease (the "Marketing Segment") were
acquired from X. Xxxxxxx and certain of his affiliates by Seller in 1997, and X.
Xxxxxxx has continued to manage such Marketing Segment of the Business on behalf
of Sellers; and
WHEREAS, as part of the Marketing Segment of the Business, Seller owns
certain improved real property located at 0000 Xxxxx Xxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxx, consisting of approximately 3.5 acres (the "Fort Worth Owned Property"),
and Seller leases certain improved real property located at 000 Xxxxx Xxxxxx,
Xxxxxx, Xxxxx, consisting of approximately one acre (the "Laredo Property") and
certain office space located at 000 Xxxx Xxxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxx
(the "Fort Worth Leased Property"); and
WHEREAS, Buyer, an affiliate of X. Xxxxxxx, desires to purchase and
acquire certain assets, properties and contractual rights of Seller used in
connection with the Marketing Segment of the Business, and Seller desires to
sell such assets, properties and contractual rights to Buyer, all in accordance
with the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
SALE OF ASSETS
SECTION 1.1 DESCRIPTION OF ASSETS. Upon the terms and subject to the
conditions set forth in this Agreement, Seller does hereby grant, convey, sell,
transfer and assign to Buyer the following assets, properties and contractual
rights of Seller, wherever located, subject to the exclusions hereinafter set
forth:
(a) all real property interests (whether owned or leased) used or
for use in the Marketing Segment of the Business (collectively, sometimes
referred to herein as the
"Real Property"), as specifically described on Schedule 1.1(a) hereto, and
all improvements thereon;
(b) all equipment used or for use in the operations of the Marketing
Segment of the Business listed on Schedule 1.1(b) attached hereto and made
a part hereof (the "Equipment");
(c) all of the motor vehicles (whether owned or leased) used or for
use primarily in the Marketing Segment of the Business, and all radios,
attachments, accessories and materials handling equipment now located in
or on such motor vehicles (the "Rolling Stock"), as the same are listed
and more completely described by manufacturer, model number and model year
on Schedule 1.1(c), attached hereto and made a part hereof;
(d) the accounts receivable relating to the Marketing Segment of the
Business as of the Effective Date (hereinafter defined) set forth on
Schedule 1.1(d) attached hereto and made a part hereof (as may be amended
pursuant to Section 2.2 hereof);
(e) all of Seller's rights with respect to its customers arising out
of the Marketing Segment of the Business (the "Customer Accounts"); a
listing of all Customer Accounts is set forth on Schedule 1.1(e) attached
hereto and made a part hereof;
(f) all of Seller's inventory of finished yellow and xxxxx grease
products (i) in transit between one of Seller's processing facilities
located in Houston, Dallas, the Rio Grande Valley or San Antonio and
Seller's customers, and (ii) in transit purchases from third party
facilities with , respect to the Marketing Segment of the Business as of
the Closing Date, which inventory is listed on Schedule 1.1(f) (the
"Inventory");
(g) to the extent transferable, all permits, licenses, franchises,
consents and other approvals relating exclusively to the Marketing Segment
of the Business set forth on Schedule 1.1(g) (the "Permits") attached
hereto and made a part hereof, true and complete copies of which are
attached to Schedule 1.1(g);
(h) all contractual rights and obligations relating exclusively to
the Marketing Segment of the Business, including without limitation, all
employment contracts, leases, supply and other contracts to which Seller
is a party or by which Seller is bound, a list of which contracts is set
forth on Schedule 1.1(h) attached hereto and made a part hereof;
(i) all of Seller's existing documents, files and other material
related exclusively to all current or past customers of the Marketing
Segment of the Business;
(j) all of Seller's railcar leases relating exclusively to the
Marketing Segment of the Business; and
(k) all of Seller's right, title and interest, if any, in and to
shares of stock in Grasas Alimenticias Premezciadas, S.A. de C.V., a
company organized and existing in
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the Republic of Mexico, and Mesa International, Inc., a company organized
and existing in Barbados.
All of the foregoing assets, properties and contractual rights are
hereinafter sometimes collectively called the "Assets."
SECTION 1.2 EXCLUDED ASSETS. The parties agree that there shall be
excluded from the Assets the following which are not being sold to Buyer
pursuant to this Agreement ( the "Excluded Assets"): (a) all cash (including
xxxxx cash) on hand and on deposit of Sellers; (b) all real property (whether
owned or leased), other than the Real Property; (c) all accounts receivable of
Sellers other than the Accounts Receivable as of the Effective Date (hereinafter
defined); (d) all contracts and contract rights and obligations of Seller
(whether oral or in writing) other than the Customer Accounts and any other
contracts expressly assigned to Buyer hereunder, (e) all commitments, lists,
leases, permits, licenses, consents, approvals, franchises and other instruments
not relating to the Customer Accounts or the Marketing Segment of the Business,
or not legally assignable to Buyer; (f) all computer hardware, software and
peripheral equipment of Sellers, whether or not relating to the Marketing
Segment of the Business, other than the items listed on Schedule 1.1(b) hereto,
(g) all items of inventory in any collection or processing facility of Seller or
which is en route to any such collection or processing facility, (h) all motor
vehicles of Seller that are not Rolling Stock; (i) all other assets and
property, real or personal, tangible or intangible, not listed or referred to in
Section 1.1 hereof as expressly assigned to Buyer hereunder, and (j) all of the
specific assets and property set forth on Schedule 1.2 hereof.
SECTION 1.3 ASSUMPTION OF OBLIGATIONS. Buyer agrees to assume and perform
all of Seller's contractual obligations related to the Customer Contracts, the
employees and all other assumed contracts listed on Schedule 1.1 (h), to the
extent, and only to the extent, such obligations first mature and are required
to be performed after the close of business on the Closing Date.
ARTICLE II
PURCHASE PRICE
SECTION 2.1 PURCHASE PRICE.
(a) Buyer shall pay to Seller for the Assets the sum of
$1,703,129.00, which sum is subject to adjustment in accordance with
Section 2.2 hereof (the "Purchase Price").
(b) The Purchase Price shall be payable on the Closing Date as
follows:
(i) Buyer and X. Xxxxxxx, as guarantor, shall execute and
deliver a promissory note in favor of Seller in the
principal amount of $1,078,222.00, payable on or before
March 10, 1999, in substantially the form attached
hereto as EXHIBIT A;
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(ii) Buyer and X. Xxxxxxx, as guarantor, shall execute and
deliver a second promissory note (together with the note
in Section 2.1(b)(i), collectively referred to as the
"Notes") in favor of Seller in the principal amount of
$624,907.00, in substantially the form attached hereto
as EXHIBIT B.
(iii) Payment of the Notes shall be secured by a pledge (the
"Pledge") from X. Xxxxxxx of U S Liquids Inc. stock
having a value on the Closing Date of 125% of the
Principal Amount, determined by using the closing price
of the Parent Stock, as reported in the WALL STREET
JOURNAL, and the terms and provisions of which Pledge
shall be substantially in the form attached hereto as
EXHIBIT C.
SECTION 2.2 ADJUSTMENTS TO PURCHASE PRICE. The parties agree that promptly
following the Closing, the Accounts Receivable and the inventory of the Seller
relating to the Marketing Segment of the Business shall be audited by Xxxxxx
Xxxxxxxx L.L.P., Seller's independent auditors. In the event that the audit
reflects that the Accounts Receivable balance as of the Closing Date is greater
or less than $1,078,222.00, the parties agree to adjust the Note referred to in
Section 2.1(b)(i) above up or down to reflect the full audited amount of such
Accounts Receivable. In the event that the audit reflects that the inventory
balance as of the Closing Date is greater or less than $258,907.00, the parties
agree to adjust the Note referred to in Section 2.1(b)(ii) above up or down by
the difference between $258,907.00 and the audited inventory balance. Each party
agrees to promptly and diligently take all actions necessary to effect the
foregoing adjustments to the Purchase Price, including without limitation the
preparation and execution of revised Notes as contemplated in this Section 2.2.
ARTICLE III
CLOSING
SECTION 3.1 TIME AND PLACE OF CLOSING. Unless the parties otherwise agree,
this transaction shall be closed simultaneously with the execution and delivery
of this Agreement and the other documents and instruments referred to in this
Article III (the "Closing"). The Closing shall take place at a location mutually
acceptable to Buyer and Seller.
SECTION 3.2 DELIVERIES BY SELLER. At the Closing, Seller shall deliver
to Buyer, all duly executed:
(a) a General Conveyance, Assignment, Assumption and Xxxx of Sale,
in form and substance substantially as set forth on EXHIBIT D (the "Xxxx
of Sale");
(b) a fully executed and acknowledged Special Warranty Deed, in form
and substance substantially as set forth on EXHIBIT E;
(c) an executed Supply Agreement (as defined in Section 4.2);
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(d) motor vehicle Certificates of Title and/or registrations to the
Rolling Stock, properly endorsed to Buyer;
(f) fully executed consents to the assignment of the Customer
Accounts set forth on Schedule 1.1(e), if any;
(g) a certified copy of the resolutions of the shareholders and
directors of Seller authorizing the execution of this Agreement, the sale
of the Assets to Buyer, and the consummation of the transactions
contemplated herein, along with an incumbency certificate of Seller; and
(h) such other separate instruments of sale, assignment or transfer
reasonably required by Buyer.
SECTION 3.3 DELIVERIES BY BUYER. At the Closing, Buyer shall deliver
to Seller, all duly executed:
(a) duly executed Notes comprising the price set forth in
Section 2.1(a) and (b);
(b) an executed Xxxx of Sale;
(c) a duly executed Pledge Agreement;
(d) an executed Supply Agreement.
(e) a certified copy of the resolutions of the shareholders and
directors of Buyer authorizing the execution of this Agreement, the
purchase of the Assets from Seller, and the consummation of the
transactions contemplated herein, along with an incumbency certificate of
Buyer;
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ARTICLE IV
COVENANTS
SECTION 4.1 TRANSITION. Seller will not take any action that is designed
or intended to have the effect of discouraging any customer or business
associate of Seller from maintaining the same business relationships with Buyer
after the Closing that it maintained with Seller before the Closing. The
covenant set forth in this Section 4.1 shall survive the Closing and the
transfer of the Assets.
SECTION 4.2 SUPPLY AGREEMENT. Buyer and Seller shall, contemporaneously
with the Closing, enter into an agreement for the supply of yellow and xxxxx
grease processed by Seller at certain of its facilities, which agreement shall
be substantially in the form attached hereto as EXHIBIT F.
SECTION 4.3 EMPLOYEES. Buyer agrees to offer employment to all of the
employees of Seller set forth on Schedule 5.1(i) at substantially the same level
compensation and benefits as was provided by Seller. All such employees of
Seller shall be terminated by Seller as of the Closing Date. Prior to such
termination, Buyer shall indemnify Seller and promptly reimburse Seller for any
and all costs or obligations it may incur as a result of the termination of such
employees.
SECTION 4.4 GUARANTY. X. Xxxxxxx hereby absolutely and unconditionally
guaranties the full and faithful performance by Buyer of all of its obligations
under this Agreement, including without limitation, the obligations of Buyer
under Section 4.3 and Article VIII hereof. In the event that Buyer fails to
promptly perform when due any obligation arising under Section 8.4 of the Asset
Purchase Agreement, Seller shall provide written notice of such non-performance
to X. Xxxxxxx, and, without the necessity of Seller taking any further action to
collect or enforce the performance of such obligation, X. Xxxxxxx shall promptly
pay or perform such obligations on behalf of Buyer.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 5.1 Seller represents and warrants to Buyer that as of the Closing
Date:
(a) CORPORATE ORGANIZATION. Seller is a corporation duly formed,
validly existing and in good standing under the laws of the State of
Texas.
(b) AUTHORITY. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the compliance by
Seller with the terms of this Agreement do not and will not conflict with
or result in a breach of any terms of, or constitute a default under, the
articles of incorporation or bylaws of Seller, or any instruments or other
agreement to which Seller are a party or by which Seller are bound. This
Agreement constitutes a valid obligation of Seller enforceable against
Seller
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in accordance with its terms except as limited by bankruptcy, insolvency,
reorganization or other such laws concerning the rights of creditors.
(c) EQUIPMENT. Listed on Schedule 1.1(b) hereto is a complete and
accurate list of all equipment used or for use exclusively in connection
with the Marketing Segment of the Business.
(d) ROLLING STOCK. Listed on Schedule 1.1(c) hereto is a complete
and accurate list of all Rolling Stock used or for use exclusively in
connection with the Marketing Segment of the Business.
(e) CUSTOMER ACCOUNTS. Listed on Schedule 1.1(e) hereto is a listing
of the Customer Accounts as of the date hereof.
(f) TITLE TO REAL PROPERTY. Seller has good title or leasehold
interest, as the case may be, to the Real Property, except for any
encumbrances on title which would be shown by a current survey undertaken
by a registered surveyor or on a commitment for owner's title insurance
commitment on Real Property ("Permitted Encumbrances"). At the Closing,
Seller shall convey and warrant good title to the owned Real Property by,
through and under the Seller, and not otherwise.
(g) TITLE TO THE PERSONAL PROPERTY. Seller has good and marketable
title to all of the Assets constituting personal property, free and clear
of all liens, encumbrances, security interests, equities or restrictions
whatsoever, and by virtue of the grant, conveyance, sale, transfer, and
assignment of the Assets hereunder, Buyer shall receive good and
marketable title to all of the Assets constituting owned personal
property, free and clear of all liens, encumbrances, security interests,
equities or restrictions whatsoever.
(i) EMPLOYEES. Attached as Schedule 5.1(i) hereof is a complete list
of all employees of Seller relating primarily to the Marketing Segment of
the Business and their respective rates of compensation (including a
breakdown of the portion thereof attributable to salary, bonus and other
compensation, respectively) as of the date of Closing.
SECTION 5.2 DISCLAIMER OF WARRANTIES. Except for the representations and
warranties of Seller expressly set forth in this Agreement, (i) Seller makes no
warranties, express or implied, with respect to the quality, design, physical
condition, fitness for a particular purpose or capacity of any of the Real
Property or the Assets; (ii) all such Real Property and Assets are being
transferred to the Buyer "AS IS" and "WITH ALL FAULTS" in the condition existing
on the closing date; and (iii) THE SELLER EXPRESSLY DISCLAIMS AND NEGATES TO THE
BUYER AND ALL THIRD PARTIES ANY AND ALL WARRANTIES CONCERNING SUCH ASSETS,
EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, OTHER THAN THOSE EXPRESSLY SET
FORTH IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION (A) ANY WARRANTY OF
QUALITY, CONDITION OR
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MERCHANTABILITY; (B) ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; OR (C)
ANY WARRANTY OF HABITABILITY.
SECTION 5.3 SURVIVAL. Each of the representations and warranties set forth
in this Article V shall survive the Closing and the transfer of the Assets.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 6.1. Buyer and X. Xxxxxxx, jointly and severally, represent and
warrant to Seller that as of the Closing Date:
(a) CORPORATE ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas.
(b) AUTHORIZATION. Buyer has all requisite corporate power and corporate
authority to enter into this Agreement, perform its respective obligations
hereunder and consummate the transactions contemplated hereby. The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the compliance by Buyer with the terms of this Agreement do not and
will not conflict with or result in a breach of any terms of, or constitute a
default under, Buyer's Articles of Incorporation or Bylaws or any other
agreement or instrument to which Buyer is a party or by which Buyer is bound.
All necessary corporate action has been taken by Buyer with respect to the
execution and delivery of this Agreement, and this Agreement constitutes a valid
obligation of Buyer enforceable in accordance with its terms except as limited
by bankruptcy, insolvency, reorganization or other such laws concerning the
rights of creditors.
(c) ORDINARY COURSE OPERATION. The Marketing Segment of the Business,
which has been managed by X. Xxxxxxx on behalf of Seller since June, 1997, has
to the knowledge of Buyer and X. Xxxxxxx, not undertaken or engaged in any
activities which were not in the ordinary course of such business operations.
(d) PURCHASES OF INVENTORY. Except as set forth on Schedule 6.1(d), the
Marketing Segment of the Business, which has been managed by X. Xxxxxxx on
behalf of Seller, has not made or engaged in any purchases of fats or oils
products from third parties with respect to which payables are not or were not
generated and reflected on the books of Sellers.
(e) NO KNOWN BREACHES. Buyer and X. Xxxxxxx are not aware of any facts or
circumstances that are not disclosed by Seller in the schedules to this
Agreement, and which, by virtue of such nondisclosure, would result in or could
be construed as a breach of any of the representations and warranties made by
Seller herein.
SECTION 6.2 SURVIVAL. Each of the representations and warranties set forth
in this Article VI shall survive the Closing and the transfer of the Assets.
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ARTICLE VII
NONCOMPETITION
SECTION 7.1 NONCOMPETITION COVENANTS. In consideration for the purchase
and sale of the Assets, Buyer and X. Xxxxxxx, jointly and severally, agree that
for a period of five years following the date of Closing, neither of them shall
directly or indirectly, through a subsidiary or affiliate (including, without
limitation, through family members of X. Xxxxxxx), without the prior express
written consent of Seller:
(i) engage, whether as a corporation on its own account, or as an
officer, director, shareholder, owner, partner, joint venturer, investor,
agent, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, in the
business of: siting, developing, constructing, permitting or operating a
facility for the processing, treatment or disposal of hazardous or
non-hazardous liquid waste and/or products (including, without limitation,
waste oil, waste water, yellow grease, xxxxx grease, grease trap waste,
grit trap waste and oil contaminated water); cleaning or maintenance of
industrial tanks or storage containers used for the collection or storage
of any such materials; and transportation, collection or processing of any
such materials, in each case within the United States of America (the
"Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of Seller in a managerial capacity for the purpose
or with the intent of enticing such employee away from or out of the
employ of Seller;
(iii) call upon any person or entity which is, at that time, or
which has been, within two years prior to that time, a customer of Seller
or Buyer, as the case may be, within the Territory for the purpose of
soliciting contracts or business with such customer for the siting,
developing, constructing, permitting or operating a facility for the
processing, treatment or disposal of hazardous or non-hazardous liquid
waste and/or products (including, without limitation, waste oil, waste
water, yellow grease, xxxxx grease, grease trap waste, grit trap waste and
oil contaminated water); cleaning or maintenance of industrial tanks or
storage containers used for the collection or storage of any such
materials; and transportation, collection or processing of any such
materials, in each case within the Territory;
(iv) call upon any prospective acquisition candidate, on their own
behalf or on behalf of any competitor, which candidate was either called
upon by Seller or X. Xxxxxxx, or for which Seller or X. Xxxxxxx made an
acquisition analysis for Seller;
(v) disclose the identity of Seller's customers, whether in
existence or proposed, to any person, firm, partnership, corporation or
business for any reason or purpose whatsoever; or
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(vi) promote or assist, financially or otherwise (including, without
limitation, lending, guaranteeing loans or otherwise providing financial
assurance in any way), any person, firm, partnership, corporation or other
entity whatsoever to do any of the above.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Buyer or X. Xxxxxxx from (i) acquiring as an investment not more than
one percent of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter, (ii) engaging in the
marketing and distribution of processed yellow or xxxxx grease, or other fat or
oil products in any location, or (iii) engaging in any of the activities
described in Schedule 7.1 attached hereto, which schedule may be amended from
time to time by mutual agreement of the parties.
SECTION 7.2 INJUNCTIVE RELIEF. Because of the difficulty of measuring
economic losses to Seller as a result of the breach of the foregoing covenant,
and because of the immediate and irreparable damage that would be caused to
Seller for which it would have no other adequate remedy, Buyer and X. Xxxxxxx
agree that, in the event of breach by any of them of the foregoing covenant, the
covenant may be enforced by Seller by, without limitation, injunctions and
restraining orders.
SECTION 7.3 REASONABLENESS OF COVENANTS. It is agreed by the parties that
the foregoing covenants in this Article VII impose a reasonable restraint on
Buyer and X. Xxxxxxx in light of the activities and business of the Seller on
the date of the execution of this Agreement and future plans of the Seller.
SECTION 7.4 SEVERABILITY OF COVENANTS. The covenants in this Article VII
are severable and separate, and the unenforceability of any specific covenant
shall not affect the provisions of any other covenants. Moreover, in the event
any court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.
SECTION 7.5 INDEPENDENT COVENANTS. All of the covenants in this Article
VII shall be construed as an agreement independent of any other provision of
this Agreement, and the existence of any claim or cause of action of Buyer or X.
Xxxxxxx against Seller, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by Seller of such covenants. It is
specifically agreed that the duration of the noncompetition covenants stated
above shall be computed by excluding from such computation any time during which
Buyer or X. Xxxxxxx are in violation of any provision of this Article VII and
any time during which there is pending in any court of competent jurisdiction
any action (including any appeal from any judgment brought by any person,
whether or not a party to this Agreement, in which action Seller seeks to
enforce the agreements and covenants of Buyer or X. Xxxxxxx, or in which any
person contests the validity or such agreements and covenants or their
enforceability or seeks to avoid their performance or enforcement.
SECTION 7.6 MATERIALITY. Buyer and X. Xxxxxxx hereby agree that the
foregoing noncompetition covenants are a material and substantial part of this
transaction, and that, but for
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such covenants, Seller would not be willing to consummate the sale of the Assets
and the other transactions contemplated by this Agreement.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 INDEMNIFICATION BY SELLER. Notwithstanding investigation at
any time made by or on behalf of Buyer, Seller agrees to defend, indemnify and
hold harmless Buyer, its officers, shareholders, directors, divisions,
subdivisions affiliates, parent, employees, agents, successors, assigns and the
Assets from and against all losses, claims, actions, causes of action, damages,
liabilities, expenses and other costs of any kind or amount whatsoever
(including, without limitation, reasonable attorneys' fees), whether equitable
or legal, matured or contingent, known or unknown, foreseen or unforeseen,
ordinary or extraordinary, patent or latent, which result, either before or
after the date of this Agreement, from:
(a) any inaccuracy in or breach of any representation or
warranty made by Seller in this Agreement;
(b) failure of Seller duly to perform and observe any term, provision,
covenant, agreement or condition under this Agreement;
(c) liability of Seller imposed upon Buyer for the conduct of the Business
by the Seller prior to the Closing;
(d) any claim by a third party that, if true, would mean that a condition
for indemnification set forth in this Section 8.1 had been satisfied.
Buyer shall be deemed to have suffered such loss, claim, action, cause of
action, damage, liability, expense or other cost, or to have paid or to have
become obligated to pay any sum on account, of, the matters referred to in
subparagraphs (a) -(d) of this Section 8.1 if the same shall be suffered, paid
or incurred by Buyer or any parent, subsidiary, affiliate, or successor of
Buyer. The amount of the loss, claim, action, cause of action, damage,
liability, expense or other cost deemed to be suffered, paid or incurred by
Buyer shall be an amount equal to the loss, claim, action, cause of action,
damage, liability, expense or other cost suffered, aid or incurred by such
parent, subsidiary, affiliate, or successor.
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SECTION 8.2 INDEMNIFICATION BY BUYER. Notwithstanding investigation at any
time made by or on behalf of Seller, Buyer and X. Xxxxxxx, jointly and
severally, agree to defend, indemnify and hold harmless Seller, its officers,
shareholders, directors, divisions, subdivisions affiliates, parent, employees,
agents, successors, assigns and the Assets from and against all losses, claims,
actions, causes of action, damages, liabilities, expenses and other costs of any
kind or amount whatsoever (including, without limitation, reasonable attorneys'
fees), whether equitable or legal, matured or contingent, known or unknown,
foreseen or unforeseen, ordinary or extraordinary, patent or latent, which
result, either before or after the date of this Agreement, from:
(a) inaccuracy in or breach of any representation or warranty made
by Buyer and/or X.
Xxxxxxx in this Agreement;
(b) failure of Buyer or X. Xxxxxxx duly to perform and observe any
term, provision, covenant, agreement or condition under this Agreement;
(c) liability of Buyer or X. Xxxxxxx imposed upon Seller for the
conduct of the Business by the Buyer or X. Xxxxxxx following the Closing;
(d) any claim by a third party that, if true, would mean that a
condition for indemnification set forth in this Section 8.2 had been
satisfied.
Seller shall be deemed to have suffered such loss, claim, action, cause of
action, damage, liability, expense or other cost, or to have paid or to have
become obligated to pay any sum on account, of, the matters referred to in
subparagraphs (a) -(d) of this Section 8.2 if the same shall be suffered, paid
or incurred by Seller or any parent, subsidiary, affiliate, or successor of
Seller. The amount of the loss, claim, action, cause of action, damage,
liability, expense or other cost deemed to be suffered, paid or incurred by
Seller shall be an amount equal to the loss, claim, action, cause of action,
damage, liability, expense or other cost suffered, aid or incurred by such
parent, subsidiary, affiliate, or successor.
SECTION 8.3 PROCEDURE FOR INDEMNIFICATION. Promptly after a party hereto
(hereinafter the "Indemnified Party") has received notice of or has knowledge of
any claim by a person not a party to this Agreement ("Third Person" or the
commencement of any action or proceeding by a Third Person, the Indemnified
Party shall, as a condition precedent to a claim with respect thereto being made
against any party obligated to provide indemnification pursuant to this
Agreement (hereinafter the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or the commencement of such action or proceeding
(the "Notice"). The Notice shall state the nature and the basis of such claim
and a reasonable estimate of the amount thereof. The Indemnifying Party, after
receipt of the Notice, shall defend and settle, at its own expense and by its
own counsel, each such matter so long as the Indemnifying Party pursues the same
diligently and in good faith and the claim does not involve injunction or
equitable relief or involve criminal penalties. The Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in the defense thereof and
in any settlement thereof. Such cooperation shall include, but shall not be
limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or
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control. Notwithstanding the foregoing, the Indemnified Party shall have the
right to participate in any matter through counsel of its own choosing at its
own expense, provided that the Indemnifying Party's counsel shall always be lead
counsel and shall determine all litigation and settlement steps, strategy and
the like. After the Indemnifying Party has received the Notice, the Indemnifying
Party shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability, except to the extent such participation is requested by the
Indemnifying Party, in which event the Indemnified Party shall be reimbursed by
the Indemnifying Party for reasonable additional legal expenses, out-of-pocket
and allocable share of employee compensation incurred in connection with such
participation for any employee whose participation is so requested. The
foregoing notwithstanding, if the Indemnifying Party fails diligently to defend
any such matter to which the Indemnified Party is entitled to indemnification
hereunder or if the claim involves criminal penalties, the Indemnified Party may
undertake such defense through counsel of its choice and at the Indemnifying
Party's expense. In each case where the Indemnifying Party is obligated to pay
the costs and expenses of the Indemnified Party, the Indemnifying Party shall
pay the costs and expenses of the Indemnified Party as such costs and expenses
are incurred. If the Indemnifying Party desires to accept a final and complete
settlement of any such Third Person claim and the Indemnified Party refuses to
consent to such settlement, then the Indemnifying Party's liability under this
Section with respect to such Third Person claim shall be limited to the amount
so offered in settlement by said Third Person and the Indemnified Party shall
reimburse the Indemnifying Party for any additional costs of defense which it
subsequently incurs with respect to such claim.
SECTION 8.4 LIMITATIONS ON INDEMNIFICATION; TIME LIMITS FOR CLAIMS.
(a) Buyer shall not be entitled to assert any claim for indemnification
under this Article VIII unless and until such time as all claims of Buyer for
indemnification hereunder exceed $20,000 in the aggregate, at which time any and
all claims of Buyer for indemnification, in excess of $20,000, may be asserted.
Seller shall not be liable under this Article VIII for aggregate losses in
excess of the amount of the Purchase Price.
(b) No claim for indemnification may be made by any indemnified party in
respect of indemnifiable losses unless written notice thereof shall have been
received by the indemnifying party on or prior to two years after the date
hereof.
SECTION 8.5 REMEDIES; DEFAULT; NOTICE AND CURE. Except in the case of
fraud or intentional misrepresentation, indemnification pursuant to this Article
VIII is the sole and exclusive remedy of the parties after the Closing for
matters arising out of the representations, warranties, covenants and agreements
of Seller or Buyer set forth in this Agreement (without limiting the rights of
the parties under any other agreement), except as otherwise expressly provided
in Section 7.2. No party shall be deemed in breach of its obligations hereunder
unless it has received written notice from the other party of noncompliance with
a term or provision of this Agreement specifying the specific item of
noncompliance and the defaulting party has failed to cure such noncompliance
within ten (10) days after receipt of such notice; provided, however, that if
the nature of such default is such that it cannot be cured solely by the payment
of money and that more than 10 days may be reasonably required to effect a cure,
then the defaulting party
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shall not be deemed to be in default if such party shall commence such cure
within such 10 day period and thereafter diligently and in good faith prosecutes
such cure to successful completion.
ARTICLE IX
GENERAL
SECTION 9.1 FURTHER ASSURANCE. From time to time after the Closing, each
of the parties will, without further consideration, execute and deliver such
other instruments of conveyance and transfer, and take such other action as the
other party may reasonably request: (i) to more effectively convey, transfer to
and vest in Buyer and to put Buyer in possession of the Assets to be transferred
hereunder, and in the case of contracts and rights, if any, which cannot be
transferred to Buyer effectively without the consents of third parties, to
endeavor to obtain such consents promptly, and if any be unobtainable, to use
reasonable efforts to provide Buyer with the benefits thereof in some other
manner; and (ii) to more effectively transfer to Seller the consideration
identified herein.
SECTION 9.2 WAIVER. Except as otherwise provided herein, no delay of or
omission in the exercise of any right, power or remedy accruing to any party as
a result of any breach or default by any other party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed as a waiver of
or acquiescence in any such breach or default, or of or in any similar breach or
default occurring later; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default occurring before or after that
waiver.
SECTION 9.3 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
SECTION 9.4 NOTICE. All notices or communications required or permitted
under this Agreement shall be given in writing and served either by personal
delivery, overnight courier or by deposit in the United States mail and sent by
first class registered or certified mail, return receipt requested, postage
prepaid:
If to the Seller:
U S Liquids of Texas, Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: W. Xxxxxxx Xxx
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With a copy to:
Xxxxx X. Xxxxxxx, Esq.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
If to Buyer:
Mesa Processing, Inc.
X.X. Xxx 0000
Xx. Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
000 X. Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Notice shall be deemed given and effective the day personally delivered, the day
after bing sent by overnight courier, subject to signature verification, and
three days after deposit in the U.S. mail as provided above, or when actually
received, if earlier. Either party may change the address for notices or
communications to be given to it by written notice to the other party given as
provided in this Section.
SECTION 9.5 ENTIRE AGREEMENT. This Agreement, the Schedules hereto and the
other agreements referred to herein constitute the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersede all prior and contemporaneous agreements and understandings, oral or
written, relative to said subject matter.
SECTION 9.6 BINDING EFFECT; ASSIGNMENT. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon the parties hereto and their respective executors, administrators,
heirs, legal representatives, successors and permitted assigns.
SECTION 9.7 EXPENSES OF TRANSACTION. Seller shall pay all costs and
expenses incurred by Seller in connection with this Agreement and the
transactions contemplated hereby and thereby, including, without limitation, the
fees and expenses of Seller's attorneys and accountants and will make all
necessary arrangements so that the Assets will not be charged with or diminished
by any such cost or expense. Buyer shall pay all costs and expenses incurred by
it in connection with this Agreement and the transactions contemplated hereby
and thereby, including without limitation, the fees and expenses of its
attorneys and accountants.
SECTION 9.8 BROKER'S COMMISSION. Seller represents and warrants to Buyer
and Buyer represents and warrants to Seller that the warranting party has had no
dealing with any dealer, broker or agent so as to entitle such dealer, broker or
agent to a commission or fee in connection
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with the sale of the Assets to Buyer. If for any reason any commission or fee
shall become due, the party dealing with such dealer, broker or agent shall pay
such commission or fee and agrees to indemnify and save the other party harmless
from all claims for such commission or fee and from all attorneys' fees,
litigation costs and other expense relating to such claim.
SECTION 9.9 MODIFICATION; REMEDIES CUMULATIVE. This Agreement may not be
changed, amended, terminated, augmented, rescinded or otherwise altered, in
whole or in part, except by a writing executed by all of the parties hereto. No
right, remedy or election given by any term of this Agreement shall be deemed
exclusive but each shall be cumulative with all other rights, remedies and
elections available at law or in equity.
SECTION 9.10 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as to most
nearly retain the intent of the parties. If such modification is not possible,
such provision shall be severed from this Agreement. In either case the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
SECTION 9.11 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the internal laws of the State of
Texas, without giving effect to any choice or conflict of law provision or rule
(whether of the State of Texas or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BUYER:
MESA PROCESSING, INC.
By:______________________________
XXXXXX X. XXXXXXX, President
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X. XXXXXXX
_________________________________
XXXXXX X. XXXXXXX
SELLER:
U S LIQUIDS OF TEXAS, INC.
By:______________________________
XXXX XXXXXX, Vice President
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