EXHIBIT 10.17
ACQUISITION AGREEMENT
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This Acquisition Agreement is made by American International Industries,
Inc. ("AIII") and Xxx Xxxxxx and Xxxx Xxxxxxx Xxxxxxx, collectively referred to
as Sellers.
INTRODUCTION
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The Sellers wish to transfer to AIII, and AIII wishes to acquire from the
Sellers, all of the outstanding shares of common stock of Tough Trucks and
Accessories, Inc. d/b/a "Armor Linings" in exchange for the consideration
described in this Agreement.
NOW, THEREFORE, AIII and the Sellers agree as follows:
1
DEFINITIONS
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When used in this Agreement:
All accounting terms not otherwise defined in this Agreement have the meanings
assigned to them in accordance with generally accepted accounting principles
consistently applied.
"Agreement" means this Acquisition Agreement.
"AIII" means American International Industries, Inc., a Nevada corporation.
"Claim" is defined in section 12.3.
"Closing" is defined in section 3.1.
"Company" means Tough Trucks and Accessories, Inc., a Texas corporation, dba -
"Armor Linings and Truck Accessories".
"Tough Trucks and Accessories, Inc. d/b/a `Armor Linings' Financial Statements"
are defined in section 4.2.
"Tough Trucks and Accessories, Inc. d/b/a `Armor Linings' Shares" means all of
the outstanding and validly issued shares of the common stock of Tough Trucks
and Accessories, Inc.
"Effective Date" means April 28, 1999.
"Governmental Authority" means any foreign governmental authority, the United
States of America, any state of the United States, and any political subdivision
of any of the foregoing, and any agency, department, commission, board, bureau,
court, or similar entity, having jurisdiction over a party to this Agreement or
its assets or properties.
"Indemnified Party" is defined in section 8.1.
"Indemnifying Party" is defined in section 8.1.
"Legal Requirements" means any material law, statue, ordinance, writ,
injunction, decree, requirement, order, judgment, rule, or regulation (or
interpretation of any of the foregoing requirements) of, and the terms of any
license or permit issued by, any Governmental Authority.
"Permitted Liens" means (i) liens for taxes, assessments, and other governmental
charges or levies, the payment of which is not past due, (ii) mechanics',
xxxxxxx'x, repairman's, warehouseman's, vendors', or carriers' liens, or similar
liens arising in the ordinary course of business and securing sums that are not
past due, or deposits or pledges to obtain the release of any such liens, or
(iii) easements, reservations, encroachments, or minor defects in title that do
not materially impair the use of the property affected thereby.
"Rights" are defined in section 4.10.
"Securities Act" means the Securities Act of 1933, as amended.
"Sellers" means Xxx Xxxxxx and Xxxx Xxxxxxx Xxxxxxx.
2
THE TRANSACTION
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Subject to the terms and conditions set forth in this Agreement, and based on
the covenants, warranties and representations in this Agreement, the Sellers
hereby agree to transfer and deliver all of the Tough Trucks and Accessories,
Inc. Shares to AIII in exchange for $132,500.00 in cash at time of closing. At
time of closing, Sellers shall provide a list of all Accounts Receivable
[Exhibit #5 five] existing at that date. Representatives of AIII will review all
accounts to evaluate the collectibility of each. No accounts receivables are
being purchased by Buyer. Any money received by Buyer for work done prior to
5:00 p.m. April 28, 1999 is the property of Seller and shall be promptly
remitted to Seller by Buyer. All accounts receivable not purchased by Buyers
shall become the property of Sellers Xxx X. Xxxxxx and Xxxx X. Xxxxxxx. Sellers
shall pay, or cause to be paid, all accounts payable, accrued expenses and any
other liabilities except the Equipment Lease obligations which are due before
the date of closing. At time of closing, all monthly installment payments for
the month of April relating to the Equipment Lease obligations shall have been
paid. Sellers shall have their Accountant estimate the Federal and State income,
franchise and other taxes related to the operations of the Company through
April 30, 1999, and such amount shall be deducted from amounts otherwise payable
to Sellers, and paid into escrow with such Accountant, securing payment of such
taxes upon the filing of the "short-period" return, which shall be the
responsibility of Sellers. This sum shall be deducted from the money paid to
Sellers for the Accounts Receivable. Buyer shall issue a separate check payable
to Xxx X. Xxxxxx and Xxxx X. Xxxxxxx for $7,937.13 which represents the
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refundable deposits paid by the corporation as set out in [Exhibit 1 (one)]
attached. Seller has paid the April lease payments as set out in [Exhibit 10
(ten) and the buyer shall issue its separate check to Xxx X. Xxxxxx and
Xxxx X. Xxxxxxx for $ -0- to reimburse them for any May lease payments made by
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the Sellers.
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3
THE CLOSING
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3.0 The Closing. The closing (the "Closing") of the transaction
contemplated in this Agreement shall be at the offices of American International
Industries, Inc. at 000 Xxxxxx Xx., Xxxxx, Xxxxx 00000 at 9:00 a.m., on
April 29, 1999 or such other place, time and date as may be agreed by the
Sellers and AIII.
3.1 Documents to be delivered by the Sellers at the Closing. At the
Closing, the Sellers shall deliver or cause to be delivered to AIII:
3.1.1 Certificates for the Tough Truck and Accessories, Inc. Shares
being sold pursuant to this Agreement, duly endorsed for transfer to AIII,
and constituting 100 percent of the outstanding shares of that Company;
fully paid and non-assessable and free of any claims or rights of others.
3.1.2 The minute books, stock transfer records, seals, all books of
account, records, contracts, tax returns, and all other original documents
and records of the Company;
3.1.3 The resignations, effective upon their acceptance by AIII, of
all the directors and officers of the Company; and
3.1.4 Such other instruments of transfer, conveyance, and assignment
as AIII may reasonably request to more effectively consummate the
transactions contemplated in this Agreement.
Payment of the Cash Amount by AIII at the Closing. Upon delivery to AIII of the
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documents described in section 3.1, AIII shall:
deliver to Sellers, checks in the amount of $66,250.00 payable to Xxx
Xxxxxx and $66,250.00 to Xxxx Xxxxxxx Xxxxxxx, being the prorated portion of the
total purchase price of $132,500.00 plus the total of all accounts receivable
less 5% of acceptable accounts receivable which shall be paid, and such
allocation being based on the relative ownership of each in the Sellers Shares.
Buyer will also pay at closing to Sellers, in a separate check the refundable
deposits totaling $7,937.13 as set out in Exhibit 5. Buyers will also issue a
check payable to Xxx X. Xxxxxx and Xxxx Xxxxxxx Xxxxxxx in the amount of $ -0-
as reimbursement for May lease payments make before closing [Exhibit 10 (ten)].
4
THE SELLERS' REPRESENTATIONS AND WARRANTIES
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The Sellers represents and warrant to AIII that:
4.0 Organization and Corporate Status of the Company. The Company is a
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corporation duly organized, validly existing, and in good standing under the
laws of the state of
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Texas and has all corporate power and authority and has satisfied all Legal
Requirements necessary to own and operate its properties and to carry on its
business as presently conducted. The Company is not qualified or licensed to do
business as a foreign corporation in any jurisdiction, and, to the best
knowledge of the Sellers, after due inquiry, in no jurisdiction does the
character of either Company's properties or the nature of its business make such
qualification necessary. The Company is not a party to or subject to any
agreement or commitment, which will, or may restrict the conduct of its business
in any jurisdiction or location. Complete and correct copies of the Company's
Articles of Incorporation and Bylaws, as presently in effect, have been
delivered to AIII. The Company does not own, directly or indirectly, any capital
shares or any equity, profit sharing, participation or other interest in any
other person.
4.1 Capitalization. The authorized capital stock of Tough Trucks and
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Accessories, Inc. consists of 100,000 shares of common stock of no par value.
200 shares of such common stock are issued and outstanding on the Effective
Date; 7/6/1996 of those shares that are owned beneficially and of record by
Sellers, 100 shares are owned by Xxx Xxxxxx and 100shares are owned by Xxxx
Xxxxxxx Xxxxxxx and no other shares are owned by any other party or parties.
Each of the outstanding Tough Trucks and Accessories, Inc. d/b/a "Armor Linings"
shares is validly issued, fully paid, and non-assessable and none has been
issued in violation of any pre-emptive right or other agreement of any
shareholder. At the Closing, there will be no outstanding subscriptions,
options, rights, warrants, convertible securities, or other agreements or
commitments by which, the Company is, or may become obligated to issue or to
transfer from treasury any additional shares of its capital stock of any class.
4.2 Financial Statements. Exhibit 6 consists of the unaudited balance
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sheets of the Tough Trucks and Accessories, Inc. as of February 1999 and the
related unaudited income statements for the periods then ended (collectively,
the "Financial Statements"). The unaudited balance sheets included in the
Financial Statements present fairly, subject to the usual disclaimers made in
such unaudited balance sheets, the financial position of the Company as of their
dates. The unaudited income statements included in the Financial Statements
present fairly, subject to the usual disclaimers made in such unaudited income
statements, the results of operations of the Company for the periods indicated.
4.3 Absence of Undisclosed Liabilities. The Company has not incurred any
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liabilities which have not been disclosed.
4.4 Taxes and Tax Returns. The Company has duly filed with the appropriate
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governmental agencies all federal tax returns and reports, all state and local
tax returns and reports with respect to income, payroll, sales and franchise
taxes and all other tax returns and reports, the filing of which is necessary
for the conduct of its business. All such tax returns properly reflect the taxes
of the Company for the periods covered. All federal, state, and local taxes,
assessments, interest, penalties, deficiencies, fees, or other governmental
charges or impositions called for by such tax returns, or claimed to be due by
any taxing authority, have been properly accrued or paid and all deposits
required by law to be made with respect to employees' withholding taxes have
been made. There are no material unresolved questions or claims concerning Tough
Truck and Accessories. Inc. d/b/a/ "Armor Linings" tax liability. The Company
has not received any notice of audit, deficiency, or assessment or proposed
deficiency or assessment by the Internal Revenue Service or any other taxing
authority, nor has the Company
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waived any statute of limitations with respect to taxes or agreed to any
extensions of time with respect to a tax assessment or deficiency.
4.5 Material Contracts. There are no material agreements, contracts, and
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commitments written or oral, not in the ordinary course or not consistent with
prior practice, to which the Company is a party or by which it or any of its
properties are bound as of the date of the Effective Date. None of the customers
or suppliers of the Company has refused, or communicated that it will or may
refuse to purchase or supply goods or services, as the case may be, or has
communicated that it will or intends to substantially reduce the amounts of
goods or services that it is willing to purchase from or sell to the Company.
4.6 Equipment. [Exhibit 7 (seven)] is a schedule of all of the material
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machinery, equipment, motor vehicles, furniture, fixtures, and other capital
assets of every kind and description of each Company as of the April 28, 1999.
All of the tangible properties and assets owned by the Company, or in which it
has an interest, currently being used by it are in good and normal operating
condition and repair, normal wear and tear excepted, free from defects (except
such minor defects as do not interfere with the continued use thereof in the
conduct of normal operations), are sufficient to carry on each Company's
business as conducted during the preceding three months, and conform with all
applicable governmental regulations, including, without limitation, those
governing the discharge of materials into the environment or the storage or
disposition of hazardous or toxic wastes.
4.7 Litigation. There are no judicial or administrative actions, suits,
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proceedings, or, to the knowledge of the Transferors, investigations pending or
threatened against or affecting the Company, or the transactions contemplated by
this Agreement at law or equity or before any court, governmental agency or
arbitrator, and the Sellers know of no basis or grounds for any such
investigation, action, suit, proceeding, or claims against the Company, nor is
there any judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against either Company.
4.8 Compliance with Laws. The Company is conducting its business and
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operations in compliance with all Legal Requirements applicable to its business
and operations, and the Sellers have no knowledge or reason to believe that the
Company is in violation or default under any Legal Requirement applicable to it
or any of its properties which violation or default resulted in or could result
in a material adverse effect.
4.9 Government Authorizations. No material permit, concession, grant,
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franchise, license, or other governmental authorization or approval is necessary
for the conduct of the business of the Company.
4.10 Intellectual Property Rights. [Exhibit 8 (eight)] identifies all of
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the material computer software programs, patents, patent applications, licenses,
trade names, assumed names, trademarks, service marks, brandmarks, brandnames,
copyrights, and registrations and Tough Trucks and Accessories, Inc. d/b/a
"Armor Linings" Lining Trademark and applications therefor, franchises,
technology, know-how or other assets of like kind (the "Rights"), used in the
business of the Company, or which are presently owned by or registered in the
name of the Company or under which the Company owns or holds any license or
other interest. To preserve the rights of
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Exhibit 8 (eight) the holder must file an affidavit of use between the Fifth and
Sixth anniversary dates of the U.S. Registration which is between November 18,
2002 and November 18, 2003. The rights are adequate for the conduct of the
Company's business. All of the Rights are free of all liens and encumbrances,
and the Company has not granted any licenses or sublicenses under any of the
Rights to others. The Company has the sole and exclusive right to use the
Rights, and the consummation of the transactions contemplated by this Agreement
will not alter or impair the Rights. No proceedings have been instituted, are
pending or threatened which challenge any Rights or their validity, and, to the
knowledge of the Sellers, none of the Rights or their use by the Company
infringes or otherwise violates the rights of others or is being infringed by
others. The Company has not received notice of interference or infringement of
any of the Rights. Except by virtue of the Sellers' ownership of the Tough Truck
and Accessories, Inc. d/b/a "Armor Linings" Shares, no shareholder, director,
officer or employee of the Company owns, directly or indirectly, in whole or in
part, any Rights which the Company has used, or the use of which is necessary
for the business of the Company as now conducted.
4.11 Employees; Employee Benefit Plans.
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4.11.1 Employees. At the Closing no present or former employee of the
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Company will have any claim against the Company (whether under
Federal or State law, under any employee agreement or
otherwise) on account of or for (a) overtime pay, other than
overtime pay for the payroll period ending on or after the
Closing, (b) wages or salaries, or (c) vacations, time off or
pay in lieu of vacation or time off, other than vacation or
time off (or pay in lieu thereof) earned with respect to the
current fiscal year of the Company. To the knowledge of the
Sellers, at the Closing no present or former employee of the
Company will have any claim against the Company (whether under
federal or state law, under any employee agreement or
otherwise) on account of or for any violation of any law
related to minimum wages or maximum hours of work.
4.11.2 Employee Benefit Plans. The Company has no employee benefit
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plan or arrangement, whether formal or informal, and whether
legally binding or not, under which or to which it contributes
to or for the benefit of its employees (including, without
limitation, life insurance, hospitalization medical, dental,
bonus, incentive, deferred compensation and similar plans,
severance or termination pay, club memberships, and similar
benefits and perquisites) (the "Plans").
4.11.3 Qualified Plans. The Company is not and has never been a party
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to any Plan which is an "employee pension benefit plan", as
such terms defined in section 3(2) of ERISA and the rules and
regulations promulgated thereunder, and neither Company is and
never has been a party to a "multi-employer plan" as that term
is defined in section 3(37) of ERISA.
4.12 Labor Matters.
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4.12.1 No employees of the Company are currently represented by
any labor union, nor is the Company a party to any
collective bargaining agreement, and, to the knowledge of
the Sellers, there is no organizational effort presently
being made or threatened by or on behalf of any labor
union with respect to employees of either Company;
4.12.2 To the best of their knowledge the Company has
substantially complied with the Occupational Safety and
Health Act, the regulations promulgated thereunder, and
all other applicable laws respecting employment and
employment practices, terms and conditions of employment
and wages and hours, and is not engaged in any unfair
labor practice;
4.12.3 There is no unfair labor practice complaint against the
Company pending before the National Labor Relations Board
or any comparable state agency;
4.12.4 There is no labor strike, dispute, slowdown,
representation campaign or work stoppage actually pending
or, to the knowledge of the Transferors, threatened
against or affecting either Company; and
4.12.5 No grievance or arbitration proceeding is pending and no
claim therefor has been asserted against either Company.
4.13 Transactions with Related Parties. The Company is not a party to any
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material transaction or proposed transaction, including, without limitation, the
leasing of property, the purchase or sale of raw materials or finished goods, or
the furnishing of services, with Sellers, and the Company has not, directly or
indirectly, entered into any agreement or commitment which could result in it
becoming obligated to provide funds in respect of or to guarantee or assume any
debt or obligation of either the Sellers, or of any director, officer or
employee of the Company.
4.14 Books and Records. The financial books and records of the Company
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accurately reflect the transactions to which it is, or was, a party or by which
its properties are or were bound. All of the corporate records of the Company
have been made available to representatives of AIII and are substantially
complete, accurate, and current.
4.15 Warranties. The Company has not given or made any warranties to third
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parties with respect to any products sold or services performed by it, except
for the limited warranties stated in standard forms of warranty used by it,
copies of which have been delivered to AIII. There is no claim against or
liability of the Company on account of product warranties or with respect to the
manufacture, sale, or rental of defective products and there is no basis for any
such claim on account of defective products heretofore manufactured, sold, or
rented which is not covered by insurance.
4.16 Title and Related Matters. Other than properties leased by the
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Companies or as noted on [Exhibit 9 (nine)], the Company has good, marketable,
and insurable title to all of the properties and assets owned or used by it or
in its possession free and clear of all mortgages, liens, pledges, charges or
encumbrances of any kind or character, except (a) statutory liens for property
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taxes not yet delinquent or payable subsequent to the Effective Date; (b) such
imperfections or irregularities of title, liens, easements, charges or
encumbrances as do not materially detract from or materially interfere with the
use of the properties or assets subject thereto, or affected thereby, or
otherwise materially impair business operations or such properties; (c) such
imperfections or irregularities of title, liens, easements, charges or
encumbrances as would not materially interfere with the sale, or materially
detract from the aggregate value of, such properties and assets; or (d) as
reflected in the Financial Statements. The Sellers have no actual knowledge of
any violations of zoning, building, health or safety laws, statutes, ordinances
or regulations relating to such properties or assets.
4.17 Disclosure. Neither this Agreement nor any of the annexes, exhibits,
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schedules, attachments, statements, documents, certificates, or other items
prepared or supplied to AIII by or on behalf of the Sellers with respect to the
transactions contemplated by this Agreement knowingly contain any untrue
statement of a material fact or omit a material fact necessary to make each
statement contained herein or therein not misleading. No responsible officer or
director of the Company has intentionally concealed any fact known by such
person to have a material adverse effect upon the Companies' existing or
expected financial condition, operating results, assets, customer relations,
employee relations, or business prospects taken as a whole.
4.18 Power of Attorney. No material power of attorney or similar
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authorization given by the Company is in effect on the Effective
Date.
4.19 Accounts Receivable. All accounts receivable of Tough Trucks and
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Accessories, Inc. reflected in the Financial Statements represent bona-fide
sales actually made in the ordinary course of business.
4.20 Real Property. None
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4.21 Power and Authority of the Sellers. The execution, delivery, and
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performance by each Seller of this Agreement are within his requisite power.
4.22 Enforceability. This Agreement, when duly executed and delivered in
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accordance with its terms, will constitute the legal, valid, and binding
obligations of each Seller enforceable against him in accordance with its terms,
except as may be limited by bankruptcy, insolvency, and other similar laws
affecting creditors' rights generally or by general equitable principles.
4.23 No Violation of Law. The execution, delivery, and performance of this
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Agreement by each Seller do not materially conflict with, violate, or constitute
a breach of or a default under, or result in the creation or imposition of any
lien, claim, or encumbrance of any kind upon, any of his Tough Truck and
Accessories, Inc. d/b/a "Armor Linings" Shares being sold pursuant to this
Agreement.
4.24 Brokers and Finders. No person has acted on the behalf of the Seller
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or the Company in connection with any negotiations relative to this Agreement
and the transactions contemplated by this Agreement.
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5
AIII'S REPRESENTATIONS AND WARRANTIES
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AIII represents and warrants to the Transferors that:
5.0 Organization and Corporate Status of AIII. AIII is a corporation duly
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organized, validly existing, and in good standing under the laws of the State of
Nevada, and is duly licensed, qualified to do business, and in good standing in
each jurisdiction in which such qualification is necessary, and has all
corporate power and authority and has satisfied all Legal Requirements necessary
to own and operate its properties and to carry on its business as presently
conducted.
5.1 Power and Authority of AIII. The execution, delivery, and performance
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by AIII of this Agreement are within the requisite corporate power and authority
of AIII and have been duly authorized and approved by all necessary parties,
including, without limitation, the Board of Directors of AIII.
5.2 Enforceability. This Agreement, when duly executed and delivered in
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accordance with its terms, will constitute the legal, valid, and binding
obligation of AIII in accordance with its terms, except as may be limited by
bankruptcy, insolvency, and other similar laws affecting creditors' rights
generally and by general equitable principles.
5.3 Brokers and Finders. No person acted on behalf of AIII in connection
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with any negotiations relative to this Agreement and the transactions
contemplated by it, and such negotiations have been carried on by AIII without
the intervention of any person acting on behalf of AIII in such a manner as to
give rise to any valid claim for a brokerage commission, finder's fee, or other
like payment.
6
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS
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6.0 Each and every obligation of the Transferors under this Agreement to
be performed on or before the Closing shall be subject to the satisfaction, on
or before the Closing, of each of the conditions contained in of this Article
10.
6.1 Representations and Warranties. Each of the representations and
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warranties of AIII set forth in this Agreement shall be true and correct, both
on the Effective Date and on the Closing as if made at that time.
6.2 Agreements and Obligations. AIII shall have performed and complied
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with all agreements, undertakings, and obligations which are required to be
performed or complied with by it at or before the Closing.
6.3 Legal Matters. All legal matters in connection with this Agreement and
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the transactions it contemplates, and the form and substance of all papers,
instruments, and documents used or delivered under this Agreement or incidental
to this Agreement, shall be reasonably satisfactory to the Transferors.
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6.4 No Governmental or Other Proceedings. No action, suit, proceeding or
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investigation by or before any court or governmental, administrative or
regulatory authority shall have been commenced or threatened against any
Company, AIII or the Sellers seeking to restrain, prevent or change the
transactions contemplated by this Agreement or questioning the validity or
legality of the transactions or seeking damages in connection with the
transactions.
6.5 No Material Adverse Change. There shall be no material adverse change
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since the Effective Date in the business, condition (financial or otherwise),
assets, liabilities (absolute, accrued, contingent or otherwise), prospects or
operations of AIII.
7
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
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7.0 Nature of Statements. All statements contained in this Agreement, in
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any annex, exhibit, or any certificate or other instrument delivered by or on
behalf of the Sellers or AIII pursuant to this Agreement, or in connection with
the transactions it contemplates, shall be considered the representations and
warranties of the Sellers or AIII, as the case may be. No investigation by any
party nor failure by any party, to make any investigation, shall constitute a
waiver of any representation, warranty, covenant, or agreement of any party, nor
relieve the other party of any obligation with respect to the accuracy or
fulfillment thereof.
8
INDEMNIFICATION
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8.0 Indemnification by the Sellers. Sellers individually hereby indemnify
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and hold harmless AIII and its respective successors and assigns from and
against any taxes, claims, liabilities, damages, losses, costs, and expenses,
including, without limitation, reasonable legal fees, accountants' fees, costs
of investigation, and other expenses of defending any action or claim, amounts
of judgment and amounts paid in settlement, together with interest thereon at
the rate of ten percent (10%) per year, compounded annually from the date
incurred until paid, caused by or arising out of: (i) any breach or default in
the performance by him of any covenant or agreement of such Sellers contained in
this Agreement, or (ii) any breach of warranty or inaccurate or erroneous
representation made by him in this Agreement, in any annex, exhibit, or any
other document delivered by or on behalf of the Sellers pursuant to this
Agreement.
8.1 Conditions of Indemnification. With respect to any actual or potential
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claim, any demand, the commencement of any action, or the occurrence of any
other event which involves any matter or related series of matters (a "Claim")
against which a party (the "Indemnified Party") is indemnified by another party
(the "indemnifying party") under section 8.1.1 or 8.1.2:
8.1.1 Notice. Promptly after the Indemnified Party first receives
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documents pertaining to the Claim, or if such Claim does not involve a third
party Claim, promptly after the Indemnified Party first has actual knowledge of
the Claim, the Indemnified Party shall give notice to the Indemnifying Party of
the Claim in reasonable detail and stating the amount involved, if known,
together with copies of any such documents.
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8.1.2 Failure to Give Notice. The Indemnifying Party shall have no
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obligation to indemnify the Indemnified Party with respect to any Claim if (i)
the Indemnified Party fails to give the notice of the Claim in accordance with
section 8.1.1 or (ii) the notice of the Claim is not given on or before the
first anniversary of the Closing; however, such limitation shall not apply to
any Claim based upon or arising out of willful concealment or willful
misconduct.
8.2 Litigation, Settlement, Resolution of Claim. If the Claim involves
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a third party, then the Indemnifying Party may, at its sole cost, expense and
ultimate liability regardless of the outcome, and through counsel of its choice,
litigate, defend, settle or otherwise attempt to resolve the Claim, except that
the Indemnified Party may elect, at any time and at the Indemnified Party's sole
cost, expense and ultimate liability, regardless of the outcome, and through
counsel of its choice, litigate, defend, settle or otherwise attempt to resolve
the Claim. If the Indemnified Party so elects (for reasons other than the
Indemnifying Party's failure or refusal to provide a defense to the Claim), then
the Indemnifying Party shall have no obligation to indemnify the Indemnified
Party with respect to the Claim, but such disposition will be without prejudice
to any other right the Indemnified Party may have to indemnification, regardless
of the outcome of the Claim. In any event, AIII and the Transferors shall fully
cooperate with each other and their respective counsel at their own expense in
connection with any such litigation, defense, settlement or other attempted
resolution.
9
MISCELLANEOUS
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9.0 Construction. The section headings contained in this Agreement are for
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reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever required by the context, any gender
shall include any other gender, the singular shall include the plural, and the
plural shall include the singular.
9.1 Costs, Expenses, and Legal Fees. Each party shall bear its own costs
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and expenses pertaining to the negotiation, preparation and execution of this
Agreement and the consummation of the transactions it contemplates.
9.2 Announcements, Press Releases, and Disclosure. Any press release or
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other public announcement concerning this Agreement or the transactions it
contemplates shall be approved by both the Sellers and AIII. In addition, no
party shall disclose the existence of this Agreement or the transactions it
contemplates before the Closing, except as may be necessary to comply with any
Legal Requirement.
9.3 Notice. Any notice required or permitted under this Agreement shall
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be in writing and shall be considered to be delivered three business days after
deposit in the United States mail, postage prepaid, certified or registered
mail, return receipt requested, addressed as follows:
9.3.1 If to AIII, to it at 000 Xxxxxx Xxxx, Xxxxx, Xxxxxxx, Xxxxx
00000-0000, Attention: Mr. Xxxx Xxxxx; or
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9.3.2 If to the Transferor: to it at 0000 Xxxxxx Xxxx, Xxxxxxx,
Xxxxx, 00000-0000
Attention: Xxxxxxxx X. Xxxxxxx, XX
9.3.3 Notice given in any other manner shall be effective when
received by the addressee. The address for notice may be
changed by notice given in accordance with this section 9.3.
9.4 Entire Agreement, Amendment. This Agreement and its annexes and
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exhibits constitute the entire agreement between the parties and may not be
amended, supplemented, waived, or terminated except by an instrument executed by
all of the parties. Any previous agreements or understandings among the parties
regarding the subject matter of this Agreement are merged into and superseded by
this Agreement.
9.5 Waiver. No waiver of any provision of this Agreement shall constitute
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a waiver of any other provision of this Agreement, nor shall such waiver
constitute a waiver of any subsequent breach of the provision.
9.6 Assignment. This Agreement shall not be assignable. Any attempted
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assignment shall be null and void.
9.7 Choice of Law. The validity, construction and enforcement of this
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Agreement shall be governed by the laws of the State of Texas.
9.8 Arbitration. If any dispute, difference, or disagreement shall
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arise upon or in respect of the Agreement, and its meaning and construction,
every such dispute, difference, and disagreement shall be referred to a single
arbiter sitting in Houston, Texas, agreed upon by the parties, or if no single
arbiter can be agreed upon, an arbiter or arbiters shall be selected in
accordance with the rules of the American Arbitration Association and such
dispute, difference, or disagreement shall be settled by arbitration in
accordance with the then prevailing commercial rules of the American Arbitration
Association, and judgment upon the award rendered by the arbiter may be entered
in any court having jurisdiction. In the event of such arbitration, the
prevailing party shall be entitled to reasonable legal fees to be fixed by the
arbitrator.
9.9 Severability. If any provision of this Agreement is declared
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unenforceable by a court of competent jurisdiction, such provision shall be
enforced to the greatest extent permitted by law, and such declaration shall not
affect the validity of any other provision of this Agreement.
10.10 Time for Performance. If the time for performance of any obligation
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set forth in this Agreement falls on a Saturday, Sunday or legal holiday,
compliance with the obligation on the next business day following such Saturday,
Sunday, or legal holiday shall be considered acceptable.
10.11 Counterparts. This Agreement may be executed in multiple
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counterparts, each of which shall be considered an original, but all of which
shall be considered one instrument.
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10.12 Confidentiality. Each party to this Agreement shall keep all
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information obtained from the other parties as a result of its due diligence
investigation confidential. No party shall release such confidential information
without the consent of the other.
IN WITNESS WHEREOF, this Agreement has been executed as of the Effective Date
set out on page one (1).
AMERICAN INTERNATIONAL INDUSTRIES, INC.
By: _______________________________
Xxxx X. Xxxxx, III
It's: Chief Financial Officer
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Tough Trucks and Accessories, Inc. d/b/a/ "Armor Linings"
By: _______________________________
Xxx X. Xxxxxx, Shareholder
By: _______________________________
Xxxx Xxxxxxx Xxxxxxx, Shareholder
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