EXHIBIT 10.19
EXCHANGE AGREEMENT
BY AND AMONG
E. XXXXXXX XXXXXX, B. XXX XXXXXX AND TEAM, INC.
DATED JULY 5, 2001
This agreement (the "Exchange Agreement") is entered into by and among
E. Xxxxxxx Xxxxxx ("Xxxxxx"), B. Xxx Xxxxxx ("Xxxxxx") and Team, Inc., ("Team")
to be effective as of July 5, 2001 (the "Effective Date"); Team, Xxxxxx and
Xxxxxx are sometimes collectively referred to herein as the "Parties";
WHEREAS, Xxxxxx, Xxxxxx and Team entered into a Stock Purchase
Agreement dated as of April 9, 1999 (the "Purchase Agreement") and pursuant
thereto Team purchased all of the issued and outstanding shares of the capital
stock of X-Ray Inspection, Inc., (the "X-Ray Stock") from Xxxxxx and Xxxxxx and
has paid the full amount of the purchase price due there under through the
Effective Date; and,
WHEREAS, Section 2.2.4 of the Purchase Agreement provides among other
things for the contingent payments of certain additional amounts ("Earn-Out") as
the Purchase Price for the X-Ray Shares if the conditions provided therein are
satisfied; and,
WHEREAS, Xxxxxx and Team have agreed that Manuel's entitlement to
receive additional payments of purchase price for the X-Ray Stock will be
canceled and that he will be nominated by the Board of Directors of Team (the
"Team Board") for election to the Team Board at the 2001 annual meeting of the
Team Shareholders; and,
WHEREAS, the Team Board has unanimously adopted a resolution nominating
Xxxxxx for election to the Team Board at the 2001 annual shareholders' meeting;
and,
WHEREAS, Xxxxxx and Team have agreed that Xxxxxx 's entitlement to
receive additional payments of purchase price for the X-Ray Shares will be
canceled in exchange for the grant by Team of the Option to purchase 100,000
shares of Team common stock with par value of $0.30 per share pursuant the terms
and conditions contained in the copy of the agreement (the "Option Agreement")
attached hereto as Exhibit A; and,
WHEREAS, Xxxxxx and Team have executed this Exchange Agreement
simultaneously with their execution of the Option Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained and other good and valuable consideration, the
receipt and adequacy of which is acknowledged, the Parties agree as follows:
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1. Termination of Entitlement to Receive Additional Payments under
Purchase Agreement. For and in exchange for the consideration described in the
above Recitals, Xxxxxx and Xxxxxx hereby relinquish any and all rights and
entitlements that either of them have or may have to receive Earn Out payments
pursuant to the Purchase Agreement. Without limiting the foregoing, the Purchase
Agreement is hereby amended as of the Effective Date to eliminate therefrom in
the entirety all of the provisions of Section 2.2.4 and Sections 2.2.4.1 through
2.2.4.8 inclusive.
2. Representations, Warranties and Covenants of Xxxxxx. Xxxxxx hereby
represents, warrants and covenants as follows:
(A) As of the Effective Date, Xxxxxx has not heretofore transferred,
assigned or pledged his interest in the Purchase Agreement or his right to
receive any additional payments thereunder and he is the beneficial owner of any
and all rights to receive additional payments for the X Ray Shares sold by him
to Team pursuant to the Purchase Agreement and no other party (other than B. Xxx
Xxxxxx) has any ownership interest in, lien or claim against or right to receive
any such payment whether presently due or that could hereafter arise under the
terms of the Purchase Agreement;
(B) Xxxxxx has the complete and total authority to enter into this
Amendment without the necessity of obtaining the consent of any other person;
(C) Xxxxxx will not hereafter make any claim against Team for any Earn
Out payments pursuant to the Purchase Agreement or for any additional
consideration for the X Ray Shares that Team purchased from him, excluding
Manuel's right under the Purchase Agreement (i) to receive Deferred Payments and
(ii) to assert indemnity claims and receive payments therefor.
(D) Xxxxxx is familiar with the financial affairs, operations and
business prospects of the Company and of its Mechanical Inspection Services
Segment and has been provided with detailed financial data and other materials
pertaining to the Company and its Mechanical Inspection Services Segment
including all information he has requested. Xxxxxx has been afforded the
opportunity to discuss the Company's business prospects with senior officials of
the Company and is satisfied that he has been provided with all information that
is necessary for him to make an informed decision with respect to entering into
this Exchange Agreement.
3. Representations, Warranties and Covenants of Xxxxxx. Xxxxxx hereby
represents, warrants and covenants as follows:
(A) As of the Effective Date, Xxxxxx has not heretofore transferred,
assigned or pledged his interest in the Purchase Agreement or his right to
receive any additional payments thereunder and he is the beneficial owner of any
and all rights to receive any additional payments for the X Ray Shares sold by
him to Team pursuant to the Purchase Agreement and no other party (other than E.
Xxxxxxx Xxxxxx) has any ownership interest in, lien or claim against or right to
receive any such payment whether presently due or that could hereafter arise
under the terms of the Purchase Agreement;
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(B) Xxxxxx has the complete and total authority to enter into this
Amendment without the necessity of obtaining the consent of any other person;
(C) Xxxxxx will not hereafter make any claim against Team for any Earn
Out payments pursuant to the Purchase Agreement or for any additional
consideration for the X Ray Shares that Team purchased from him, excluding
Xxxxxx'x right under the Purchase Agreement (i) to receive Deferred Payments and
(ii) to assert indemnity claims and receive payments therefor.
(D) Xxxxxx is familiar with the financial affairs, operations and
business prospects of the Company and of its Mechanical Inspection Services
Segment and has been provided with detailed financial data and other materials
pertaining to the Company and its Mechanical Inspection Services Segment
including all information he has requested. Xxxxxx has been afforded the
opportunity to discuss the Company's business prospects with senior officials of
the Company and is satisfied that he has been provided with all information that
is necessary for him to make an informed decision with respect to entering into
this Exchange Agreement.
4. Representations, Warranties and Covenants of Team. Team hereby
represents, warrants and covenants with Xxxxxx and Xxxxxx as follows:
(A) Team is fully authorized to enter into this Amendment and that it
is binding upon and enforceable against Team in accordance with its terms.
(B) The Option Agreement has been duly authorized and executed on
behalf of Team and is binding upon and enforceable against Team in accordance
with its terms.
(C) Attached hereto as Exhibit B is a true copy of resolutions adopted
by the Team Board as of the Effective Date.
(D) This Exchange Agreement shall not affect Manuel's and Xxxxxx'x
right to receive Deferred Payments pursuant to the terms and conditions of the
Purchase Agreement and/or their right to assert indemnity claims under the
Purchase Agreement and receive, if entitled, to payments for such claims.
5. Survival of Representations, Warranties and Covenants. The
Representations, Warranties and Covenants contained herein shall survive the
execution of this Exchange Agreement and the completion of the transactions
covered thereby.
6. Amendment to Purchase Agreement - Incorporation By Reference. The
Purchase Agreement as amended by this Exchange Agreement is hereby reaffirmed
and shall continue in full force and effect and, as amended, is hereby
incorporated herein for all purposes.
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7. Reliance Upon Own Professional Advisors. Each of the Parties has
been represented by and has relied upon his/its own separate legal counsel,
accountants and other advisors in connection with all matters pertaining to this
Exchange Agreement. Each Party acknowledges that no representations or
warranties have been made with respect to the tax consequences of the
transactions covered by this Exchange Agreement and that each Party shall be
responsible for determining and satisfying his/its own tax liability with
respect to the matters covered by this Exchange Agreement.
IN WITNESS WHEREOF, the Parties have executed this Exchange Agreement
on the date set forth below to be effective as of July 5, 2001.
/s/ E. XXXXXXX XXXXXX
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E. Xxxxxxx Xxxxxx
/s/ B.DAL.XXXXXX
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B. Xxx Xxxxxx
Team, Inc.
By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx, Chairman and CEO
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