AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
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SECTION 1 THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Effect of the Merger. . . . . . . . . . . . . . . . . . . . . . 2
1.2 Effective Time of the Mergers . . . . . . . . . . . . . . . . . 3
1.3 Articles of Incorporation and Bylaws of Mesa
Following Effective Time. . . . . . . . . . . . . . . . . . . . 4
1.4 Directors of Mesa . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2 CONVERSION AND EXCHANGE OF STOCK. . . . . . . . . . . . . . . . 4
2.1 Conversion and Exchange of Mesa Stock at
Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Surrender and Exchange of Stock . . . . . . . . . . . . . . . . 5
2.3 Adjustments Because of Changes in Liquids
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3 REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER AND THE MESA COMPANIES. . . . . . . . . . . . . 5
3.1 Existence; Qualification. . . . . . . . . . . . . . . . . . . . 6
3.2 Title to Stock and Subsidiaries . . . . . . . . . . . . . . . . 6
3.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Financial Statements. . . . . . . . . . . . . . . . . . . . . . 7
3.5 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Permits, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . 8
3.7 Fixed Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8 Contracts and Agreements; Adverse Restrictions. . . . . . . . . 9
3.9 Transaction with Related Parties. . . . . . . . . . . . . . . . 9
3.10 Title and Liens . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Employment Agreements and Benefit Plans . . . . . . . . . . . . 11
3.13 Continuation of Business. . . . . . . . . . . . . . . . . . . . 11
3.14 Copies Complete; No Default . . . . . . . . . . . . . . . . . . 11
3.15 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 No Hazardous Waste, Other Facilities. . . . . . . . . . . . . . 12
3.17 No Exposure to Hazardous or Toxic Substances. . . . . . . . . . 13
3.18 Underground Storage Tanks . . . . . . . . . . . . . . . . . . . 13
3.19 Disposal Facilities Used. . . . . . . . . . . . . . . . . . . . 13
3.20 Borrowed Monies . . . . . . . . . . . . . . . . . . . . . . . . 13
3.21 Absence of Certain Changes, Events or
Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.22 Tax Returns and Audits. . . . . . . . . . . . . . . . . . . . . 14
3.23 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.24 Rights and Authorizations . . . . . . . . . . . . . . . . . . . 16
3.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.26 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . 16
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3.27 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.28 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 17
3.29 Approval by Shareholder and Directors . . . . . . . . . . . . . 17
3.30 Specific Representations and Warranties Relating
to Pooling-of-Interests Accounting. . . . . . . . . . . . . . . 18
3.31 Disclosure Schedules. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4 RESALES OF LIQUIDS STOCK. . . . . . . . . . . . . . . . . . . . 18
4.1 Stock Distribution Agreement. . . . . . . . . . . . . . . . . . 18
4.2 Investment Representations and Warranties . . . . . . . . . . . 19
(a) Investment Intent . . . . . . . . . . . . . . . . . . . . 19
(b) Access to Information . . . . . . . . . . . . . . . . . . 19
(c) Investment Advice . . . . . . . . . . . . . . . . . . . . 19
SECTION 5 REPRESENTATIONS AND WARRANTIES OF LIQUIDS . . . . . . . . . . . 20
5.1 Corporate Organization. . . . . . . . . . . . . . . . . . . . . 20
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Copies Complete; No Default . . . . . . . . . . . . . . . . . . 21
5.5 No Conflict.. . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.6 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.7 Representations and Warranties Relating to
Pooling-of-Interests Accounts . . . . . . . . . . . . . . . . . 22
5.8 Brokers, Finders, Etc.. . . . . . . . . . . . . . . . . . . . . 22
5.9 Financial Statements. . . . . . . . . . . . . . . . . . . . . . 22
5.10 Accuracy of Registration Statement. . . . . . . . . . . . . . . 22
5.11 Representations Relating to Tax-Free
Reorganizations . . . . . . . . . . . . . . . . . . . . . . . . 23
5.12 Absence of Voting or Buy-Sell Agreement . . . . . . . . . . . . 24
SECTION 6 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . 24
6.2 Access to Information . . . . . . . . . . . . . . . . . . . . . 26
6.3 Public Announcements. . . . . . . . . . . . . . . . . . . . . . 27
6.4 Notification of Material Events . . . . . . . . . . . . . . . . 27
6.5 Certain Employee Matters. . . . . . . . . . . . . . . . . . . . 28
6.6 Employment Agreements . . . . . . . . . . . . . . . . . . . . . 28
6.7 THIS SECTION HAS BEEN INTENTIONALLY LEFT BLANK. . . . . . . . . 28
6.8 Noncompetition. . . . . . . . . . . . . . . . . . . . . . . . . 28
6.9 Election of Shareholder to Board of Directors of
Liquids . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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6.10 Redemption of Mesa Series A Preferred Stock . . . . . . . . . . 28
6.11 Liquids Stock Options . . . . . . . . . . . . . . . . . . . . . 29
6.12 Resignations. . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.13 Amendments to Liquids/AWW Merger Agreement. . . . . . . . . . . 29
6.14 Certain Indebtedness. . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7 CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . 30
7.1 Conditions to the Obligations of Liquids and the
Newco Companies . . . . . . . . . . . . . . . . . . . . . . . . 30
(a) Accuracy of Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . . . 30
(b) Performance of Covenants. . . . . . . . . . . . . . . . . 31
(c) No Adverse Proceedings or Events. . . . . . . . . . . . . 31
(d) Deliveries at Closing . . . . . . . . . . . . . . . . . . 31
(e) Opinion of Counsel. . . . . . . . . . . . . . . . . . . . 31
(f) Qualification as Pooling of Interest. . . . . . . . . . . 31
(g) Closing of the AWW Merger . . . . . . . . . . . . . . . . 31
7.2 Conditions to Obligations of the Shareholder and
the Mesa Companies. . . . . . . . . . . . . . . . . . . . . . . 31
(a) Accuracy of Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Performance of Covenants. . . . . . . . . . . . . . . . . 32
(c) No Adverse Proceedings or Events. . . . . . . . . . . . . 32
(d) Deliveries at Closing . . . . . . . . . . . . . . . . . . 32
(e) Opinion of Counsel. . . . . . . . . . . . . . . . . . . . 32
(f) Closing of the AWW Merger . . . . . . . . . . . . . . . . 32
(g) Complete Execution of Stock Voting
Agreement . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 8 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.1 Time and Place. . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 Deliveries by Shareholder at Closing. . . . . . . . . . . . . . 33
8.3 Deliveries by Liquids at Closing. . . . . . . . . . . . . . . . 33
8.4 Expenses of Closing . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.1 Mutual Consent. . . . . . . . . . . . . . . . . . . . . . . . . 34
9.2 By Liquids. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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9.3 By the Shareholder. . . . . . . . . . . . . . . . . . . . . . . 36
9.4 Termination by the Shareholder or Liquids . . . . . . . . . . . 37
SECTION 10 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 37
10.1 General Indemnity . . . . . . . . . . . . . . . . . . . . . . . 37
10.2 Limitations on Indemnity. . . . . . . . . . . . . . . . . . . . 38
(a) Indemnification Period. . . . . . . . . . . . . . . . . . 39
(b) Indemnification Procedure . . . . . . . . . . . . . . . . 39
(c) Limitations on Indemnified Losses . . . . . . . . . . . . 39
(d) Third-Party Beneficiaries . . . . . . . . . . . . . . . . 40
(e) Defense of Third-Party Claims . . . . . . . . . . . . . . 40
SECTION 11 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.2 Integrated Agreement. . . . . . . . . . . . . . . . . . . . . . 42
11.3 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.4 Invalidity. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.5 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . 42
11.6 Litigation Expense. . . . . . . . . . . . . . . . . . . . . . . 43
11.7 Counterpart Execution . . . . . . . . . . . . . . . . . . . . . 43
11.8 Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . 43
11.9 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . 43
11.10 Negation of Third-Party Beneficiary . . . . . . . . . . . . . . 43
11.11 Survival of Representations and Warranties. . . . . . . . . . . 43
11.12 Knowledge Defined . . . . . . . . . . . . . . . . . . . . . . . 43
11.13 Waiver of Subrogation, Etc. . . . . . . . . . . . . . . . . . . 44
11.14 Joint and Several Agreements, Representations,
Warranties, and Covenants . . . . . . . . . . . . . . . . . . . 44
11.15 Schedules and Exhibits. . . . . . . . . . . . . . . . . . . . . 44
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement"), dated as of June 16,
1997 (the "Effective Date"), is entered into between and among U S LIQUIDS INC.
("Liquids"), a Delaware corporation; MESA ACQUISITION CORP. ("Mesa Newco"), T&T
GS ACQUISITION CORP. ("T&T Newco"), and PHOENIX F&O ACQUISITION CORP. ("P
Newco"), each a Texas corporation and a wholly-owned subsidiary of Liquids (the
"Newco Companies"); MESA PROCESSING, INC. ("Mesa"), T&T GREASE SERVICE, INC.
("T&T") and PHOENIX FATS & OILS, INC. ("Phoenix"), each a Texas corporation
(collectively referred to as the "Mesa Companies"), and XXXXXX X. XXXXXXX (the
"Shareholder").
R E C I T A L S:
Liquids, by and through its subsidiary corporations, is engaged in the
environmental services business, and among other things, Liquids provides
environmental services for major and independent oil and gas companies and
manages, treats, and disposes of nonhazardous oil field waste. Mesa is in the
business, generally, of collecting, processing, and recycling fats and oils,
servicing grease traps and septic tanks, and selling these processed and
recycled finished products in the marketplace (referred to as the "Mesa
Business"). T & T is affiliated with Mesa by common ownership, and owns and
operates a business which complements and works together with the business of
Mesa. Phoenix is also affiliated with Mesa by common ownership, and provides
general and administrative support to Mesa and T&T. American WasteWater Inc.
("AWW") is a Texas corporation engaged in the business of processing
nonhazardous liquid wastes. Liquids has developed a plan whereby the business
of Liquids will be combined with the businesses of AWW, Mesa, T&T, and Phoenix.
Liquids, AWW, Mesa, T&T, and Phoenix are all privately owned. The plan
contemplates that each of Mesa, T&T, Phoenix, and AWW will merge into a separate
Newco Company, pursuant to which Mesa, T&T, Phoenix, and AWW will each become a
subsidiary corporation of Liquids, with the stockholders of those corporations
receiving Liquids stock in the mergers.
The respective boards of directors of Liquids, the Newco Companies, and the
Mesa Companies have approved the merger of Mesa Newco into Mesa (the "Mesa
Merger"), T&T Newco into T&T (the "T&T Merger") and P Newco into Phoenix (the
"Phoenix Merger"), (collectively, the "Mergers") upon the terms and subject to
the conditions set forth herein and have approved this Agreement as a "plan of
reorganization" within the meaning of Section 368(a)(1)(A) and Section
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended.
Further, the respective boards of directors of Liquids, another wholly-
owned subsidiary of Liquids, and AWW have approved the merger of that wholly-
owned subsidiary of Liquids into AWW (the "AWW Merger") pursuant to the terms
and conditions of an agreement and plan of merger, dated as of the date hereof
among Liquids, AWW Acquisition Corp. and AWW) (the "Liquids/AWW Merger
Agreement") upon the terms and conditions set forth therein.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, and agreements herein contained, the
parties agree as follows:
SECTION 1
THE MERGER
1.1 EFFECT OF THE MERGER. In accordance with the provisions of this
Agreement and the Texas Business Corporation Act (the "Texas Act"), at the
Effective Time (as defined in Section 1.2 hereof):
1.1.1 Mesa Newco shall be merged with and into Mesa; the
separate existence of Mesa Newco shall cease; and Mesa as the surviving
corporation shall continue its corporate existence under the laws of the State
of Texas. Pursuant to the Mesa Merger, Mesa shall possess all the rights,
privileges, powers, and franchises of Mesa Newco and shall be subject to all the
restrictions, disabilities, and duties of Mesa Newco; all rights, privileges,
powers, and franchises of Mesa Newco and all property, real, personal, and
mixed, belonging to Mesa Newco shall be vested in Mesa; and all property,
rights, privileges, powers, and franchises and every other interest shall be
thereafter as effectually the property of Mesa as they were of Mesa Newco, and
the title to any real estate vested by deed or otherwise in Mesa Newco shall not
revert or be in any way impaired by reason of the Mesa Merger, provided that all
rights of creditors and all liens upon any property of Mesa Newco shall be
preserved unimpaired and all debts, liabilities, and duties of Mesa Newco shall
thenceforth attach to Mesa and may be enforced against Mesa Newco to the same
extent as if said debts, liabilities, and duties have been incurred or
contracted by Mesa. Without limiting the generality of the foregoing, the Mesa
Merger shall have the effects as set forth in the Texas Act.
1.1.2 T&T Newco shall be merged with and into T&T; the
separate existence of T&T Newco shall cease; and T&T as the surviving
corporation shall continue its corporate existence under the laws of the State
of Texas. Pursuant to the T&T Merger, T&T shall possess all the rights,
privileges, powers, and franchises of T&T Newco and shall be subject to all the
restrictions, disabilities, and duties of T&T Newco; all rights, privileges,
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powers, and franchises of T&T Newco and all property, real, personal, and mixed,
belonging to T&T Newco shall be vested in T&T; and all property, rights,
privileges, powers, and franchises and every other interest shall be thereafter
as effectually the property of T&T as they were of T&T Newco, and the title to
any real estate vested by deed or otherwise in T&T Newco shall not revert or be
in any way impaired by reason of the T&T Merger, provided that all rights of
creditors and all liens upon any property of T&T Newco shall be preserved
unimpaired and all debts, liabilities, and duties of T&T Newco shall thenceforth
attach to T&T and may be enforced against T&T Newco to the same extent as if
said debts, liabilities, and duties have been incurred or contracted by T&T.
Without limiting the generality of the foregoing, the T&T Merger shall have the
effects as set forth in the Texas Act.
1.1.3 P Newco shall be merged with and into Phoenix; the
separate existence of P Newco shall cease; and Phoenix as the surviving
corporation shall continue its corporate existence under the laws of the State
of Texas. Pursuant to the Phoenix Merger, Phoenix shall possess all the rights,
privileges, powers, and franchises of P Newco and shall be subject to all the
restrictions, disabilities, and duties of P Newco; all rights, privileges,
powers, and franchises of P Newco and all property, real, personal, and mixed,
belonging to P Newco shall be vested in Phoenix; and all property, rights,
privileges, powers, and franchises and every other interest shall be thereafter
as effectually the property of Phoenix as they were of P Newco, and the title to
any real estate vested by deed or otherwise in P Newco shall not revert or be in
any way impaired by reason of the Phoenix Merger, provided that all rights of
creditors and all liens upon any property of P Newco shall be preserved
unimpaired and all debts, liabilities, and duties of P Newco shall thenceforth
attach to Phoenix and may be enforced against P Newco to the same extent as if
said debts, liabilities, and duties have been incurred or contracted by Phoenix.
Without limiting the generality of the foregoing, the Phoenix Merger shall have
the effects as set forth in the Texas Act.
1.2 EFFECTIVE TIME OF THE MERGERS. Each Merger shall become
effective when a properly executed Articles of Merger, the form of which is
attached hereto as Exhibit 1.2, is duly filed with the Office of the Secretary
of State of Texas, which filing shall be made simultaneously with the closing of
the transactions contemplated by this Agreement. The date and time when the
Mergers shall become effective is referred to as the "Effective Time."
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1.3 ARTICLES OF INCORPORATION AND BYLAWS OF MESA FOLLOWING EFFECTIVE
TIME. The Articles of Incorporation and Bylaws of each of the Mesa Companies,
as in effect immediately prior to the Effective Time, shall be the Articles of
Incorporation and Bylaws of each respective Mesa Company immediately after the
Effective Time.
1.4 DIRECTORS OF MESA. As of the Effective Time, the officers and
directors of each of the Mesa Companies shall be as follows:
Xxxxxx X. Xxxxxxx
W. Xxxxxxx Xxx.
SECTION 2
CONVERSION AND EXCHANGE OF STOCK
2.1 CONVERSION AND EXCHANGE OF MESA STOCK AT EFFECTIVE TIME.
2.1.1 At the Effective Time, by virtue of the Mesa Merger and
without any action on the part of any party hereto, (i) all of the shares of
Mesa common stock (the "Mesa Stock"), par value $1.00 per share, issued and
outstanding as of the Effective Time shall be converted into shares of Liquids
common stock, par value $.01 per share (the "Liquids Stock"), and (ii) each
issued and outstanding share of common stock of Mesa Newco, par value $.01 per
share, shall be converted into one share of common stock of Mesa, par value
$1.00 per share.
2.1.2 At the Effective Time, by virtue of the T&T Merger and
without any action on the part of any party hereto, (i) all of the shares of T&T
common stock (the "T&T Stock"), par value $1.00 per share, issued and
outstanding as of the Effective Time, shall be converted into shares of Liquids
common stock, par value $.01 per share (the "Liquids Stock"), and (ii) each
issued and outstanding share of common stock of T&T Newco, par value $.01 per
share, shall be converted into one share of common stock of T&T, par value $1.00
per share.
2.1.3 At the Effective Time, by virtue of the Phoenix Merger
and without any action on the part of any party hereto, (i) all of the shares of
Phoenix common stock (the "Phoenix Stock"), par value $1.00 per share, issued
and outstanding as of the Effective Time shall be converted into shares of
Liquids common stock, par value $.01 per share (the "Liquids Stock"), and (ii)
each issued and outstanding share of common stock of P Newco, par value $.01 per
share, shall be converted into one share of common stock of Phoenix, par value
$1.00 per share.
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The Mesa Stock, T&T Stock, and Phoenix Stock are referred to herein
collectively as the "Mesa Companies Stock."
The total number of shares of Liquids Stock into which the Mesa Companies
Stock will be converted pursuant to Sections 2.1.1, 2.1.2, and 2.1.3, shall be
1,062,500.
2.2 SURRENDER AND EXCHANGE OF STOCK. At the Effective Time, the
Shareholder shall cease to have any rights as a shareholder of any of the Mesa
Companies, except such rights as he may have pursuant to this Agreement. After
the Effective Time, the Shareholder shall be entitled to receive, upon surrender
to Liquids of all certificates representing any of his ownership in the Mesa
Companies Stock, a certificate or certificates representing the 1,062,500 shares
of Liquids Stock into which his Mesa Companies Stock shall have been converted
in accordance with Section 2.1 hereof.
2.3 ADJUSTMENTS BECAUSE OF CHANGES IN LIQUIDS STOCK. The number of
shares of Liquids Stock to be issued pursuant to Section 2.1 shall be subject to
equitable adjustment in the event of any stock split, stock dividend, reverse
stock split, or other change in the number of shares of Liquids Stock
outstanding and issuable pursuant to the transactions contemplated hereunder.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER AND THE MESA COMPANIES
In order to induce Liquids and the Newco Companies to enter into this
Agreement, the Mesa Companies jointly and severally represent, warrant, and
covenant to Liquids and to the Newco Companies, effective as of the date of this
Agreement and again as of the Closing Date, each of the matters set forth in
this Section 3. Further, the Shareholder represents, warrants, and covenants to
Liquids and to the Newco Companies, effective as of the date of this Agreement
and again as of the Closing Date, each of the matters set forth in Sections 3.1,
3.2, 3.3, 3.4, 3.9, 3.21, 3.22 and 3.29.
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3.1 EXISTENCE; QUALIFICATION. Each Mesa Company and Subsidiary,
defined below, is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation (except that
with respect to Grasas, defined below, this representation and warranty shall be
limited to the knowledge of the Mesa Companies) and is qualified or licensed and
in good standing in all jurisdictions in which the nature of its business or the
properties owned by it require or will require it to be qualified or licensed to
do business, except where failure to be so qualified or licensed will not have a
material adverse effect on the Mesa Companies as a whole.
3.2 TITLE TO STOCK AND SUBSIDIARIES.
(a) Mesa has issued and outstanding 1,000 shares of Mesa Stock and
10,000 shares of Series A Preferred Stock, $1.00 par value. Xxxxxx X.
Xxxxxxx owns all 1,000 shares of the issued and outstanding Mesa Stock, and
Sterling Trust Co., for the benefit of Xxxxxxx X. Xxxxx, Xx., M.D., owns
all 10,000 issued and outstanding shares of the Mesa Series A Preferred
Stock, $1.00 par value. Prior to Closing, the Mesa Series A Preferred
Stock shall be redeemed as described in Section 6.10. T&T has issued and
outstanding 1,000 shares of T&T Stock. The Shareholder owns all such
shares of the issued and outstanding T&T Stock. Phoenix has issued and
outstanding 1,000 shares of Phoenix Stock. The Shareholder owns all such
shares of the issued and outstanding Phoenix Stock. The Shareholder has
good title to all of the Mesa Companies Stock of record and beneficially,
free and clear of all liens, pledges, claims, contract restrictions and
encumbrances of any kind. None of the Mesa Companies Stock is subject to
any buy-sell agreement or any other contractual right or restriction. All
issued and outstanding shares of the Mesa Companies Stock have been duly
authorized and validly issued and are fully paid and nonassessable. There
are no outstanding subscriptions, options, contracts, commitments,
warrants, calls, agreements, understandings or other arrangements or rights
of any character affecting or relating in any manner to the issuance of
stock or other securities of any Mesa Company (whether by subscription,
option, exchange, right of conversion, right of refusal or otherwise) or
entitling anyone to acquire shares of stock or other securities of any kind
of any Mesa Company.
(b) Mesa owns all 100 issued and outstanding shares of Mesa
International, Inc., a Barbados corporation ("MII"), and South Texas By-
Products, Inc., a Texas Corporation. Further, the Shareholder owns all
1,000 issued and outstanding shares of Imperial Services, Inc., doing
business as T&T, and all 1,000 issued and outstanding shares of National
Enviro Waste Company, Inc., a Texas corporation. The Shareholder also owns
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49% of the issued and outstanding stock of Grasas Alimenticias
Premezciadas, S.A. DE C.V. (GAPSA) ("Grasas"). Imperial Services, Inc.,
Mesa International, Inc., South Texas By-Products, Inc., National Enviro
Waste Company, Inc., and Grasas are collectively referred to herein as the
"Subsidiaries."
(c) The Shareholder agrees that upon request by Liquids at or any
time following Closing, the Shareholder shall execute such documents as are
requested by Liquids to cause all issued and outstanding shares of any of
the Subsidiaries owned by the Shareholder to be transferred to Liquids or
to a Mesa Company designated by Liquids.
(d) The Shareholder represents and warrants to Liquids that he has
previously entered into a verbal agreement with the holders of all issued
and outstanding shares of stock of Grasas whereby the Shareholder has the
right to acquire ownership of all issued and outstanding stock of Grasas
not presently owned by the Shareholder. However, the Shareholder does not
represent and warrant that this verbal agreement is legally enforceable by
him. Nevertheless, if so requested by Liquids, then the Shareholder shall
at or anytime following Closing take such action as is reasonably necessary
and appropriate to acquire all issued and outstanding shares of Grasas not
presently owned by the Shareholder. If such action is requested by
Liquids, then Liquids will indemnify and hold the Shareholder harmless for
any costs or expenses incurred in connection with acquiring such stock of
Grasas.
3.3 AUTHORITY. Each Mesa Company and Subsidiary has all requisite
right, power and authority to own, lease and operate its properties, to carry on
its business as it has previously been carried on, and to perform its
obligations under this Agreement. This Agreement is a valid and legally binding
obligation of each Mesa Company and the Shareholder, enforceable against them in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3.4 FINANCIAL STATEMENTS. The Mesa Companies have delivered to
Liquids copies of the following financial statements (the "Financial
Statements") of Mesa, T&T, Phoenix and the Subsidiaries at Schedule 3.4:
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(i) Balance Sheet, as of March 31, 1997 (the "Balance Sheet
Date") and Balance Sheets as of December 31, 1995 and December 31, 1995;
and
(ii) Income Statements for the three (3) months ended March 31,
1996 and fiscal years ending December 31, 1996, December 31, 1995, and
December 31, 1994.
Each Balance Sheet described in (i) above fairly presents the financial
condition of the subject Mesa Company as of the date set forth thereon, and the
Income Statements described in (ii) above fairly present the results of
operations of the subject Mesa Company for the period set forth thereon. The
Financial Statements have been prepared in accordance with generally accepted
accounting principles, subject in the case of the unaudited Financial
Statements, to such year-end audit adjustments as would be made if they were
audited and the absence of complete footnotes.
3.5 LIABILITIES. Schedule 3.5 contains a list and description of all
liabilities, whether fixed, contingent, or uncontested, as to which any Mesa
Company or Subsidiary or any part of its respective business is subject on the
Effective Date to the knowledge of the Mesa Companies, except those liabilities
shown on the December 31, 1996 Balance Sheet or incurred in the ordinary course
of business or which do not, in the aggregate, materially and adversely affect
the business of the Mesa Companies taken as a whole. At Closing, the
Shareholder shall finally certify to Liquids that Schedule 3.5, as updated as of
the Closing Date, is true, complete, and accurate, and such updated
Schedule 3.5, as finally certified at Closing, will not vary materially and
adversely from the Schedule 3.5 delivered to Liquids as of the Effective Date.
3.6 PERMITS, LICENSES, ETC. Schedule 3.6 contains a list of all
material permits, licenses, applications, certificates, trademarks, trade names,
and similar such items and rights, either pending, in negotiation, or otherwise
relating to the business of any Mesa Company or Subsidiary. To the knowledge of
each Mesa Company, except as set forth on Schedule 3.6, all of the permits,
licenses, applications, franchises and other items set forth therein are
adequate for the operation of the business of each Mesa Company or Subsidiary,
except as would not have a material adverse effect upon the Mesa Companies and
Subsidiaries taken as a whole, are valid and in full force and effect and will
be owned by the Mesa Company or Subsidiary listed on Schedule 3.6 at Closing.
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3.7 FIXED ASSETS. Schedule 3.7 includes a list of all applicable
title reports and title insurance policies and all leases, including those
covering vehicles, relating to the assets of each Mesa Company or Subsidiary.
To the knowledge of the Mesa Companies, all of the vehicles, machinery and
equipment shall be in the same condition on the Closing Date which they were in
as of the Effective Date, less ordinary wear and tear. All leases of fixed
assets shall be in full force and effect and binding upon the parties thereto,
and none of the parties thereto shall be in breach of any of the material
provisions thereof at the Effective Time. The Mesa Companies shall regularly
update Schedule 3.7 between the Effective Date and the Closing Date to cause the
information contained in Schedule 3.7 to continue to be reasonably accurate on
the Closing Date. At Closing, the Shareholder shall finally certify to Liquids
that Schedule 3.7, as updated as of the Closing Date, is true, complete, and
accurate, and such updated Schedule 3.7 as finally certified, shall not vary
materially and adversely from the Schedule 3.7 delivered to Liquids as of the
Effective Date.
3.8 CONTRACTS AND AGREEMENTS; ADVERSE RESTRICTIONS. Schedule 3.8
includes copies, as of the Effective Date, a copy of all material agreements to
which any Mesa Company or Subsidiary is a party or by which it or any of its
property is bound (including, but not limited to, joint venture or partnership
agreements, loan agreements, bonds, mortgages, liens, pledges or other security
agreements in any way relating to the business of any Mesa Company or
Subsidiary). Except as indicated in Schedule 3.8, all such agreements included
in Schedule 3.8 are in full force and effect and binding upon the parties
thereto, and to the knowledge of each Mesa Company none of the parties thereto
is in breach of any material provisions thereof.
3.9 TRANSACTION WITH RELATED PARTIES. Except as set forth on
Schedule 3.9 or for matters in the ordinary course of business, such as claims
for salary, expense reimbursements, and similar items, neither the Shareholder
nor any person who is affiliated with him has any claim of any kind against any
Mesa Company or Subsidiary.
3.10 TITLE AND LIENS.
(a) At the Effective Time, each Mesa Company or Subsidiary will
have good and indefeasible title to all contracts, assets and leasehold
estates, real and personal, owned and used in its business, subject to no
security interest, mortgage, pledge, lien, or encumbrance, except for:
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(i) liens or security interests reflected on
Schedule 3.10(a) as securing specified liabilities that have no
payment which is due through the date hereof which is not paid;
(ii) liens for current taxes and assessments that are not
yet due and payable;
(iii) materialmen's, mechanics', workers', repairmen's or
other similar liens arising in the ordinary cause of business for
amounts not due and payable; or
(iv) any other encumbrance (excluding any security
interest, mortgage, pledge or lien) which does not materially and
adversely affect the use or value of any contract, asset or leasehold
estate (including without limitation utility easements, reservations
of mineral rights and similar matters), or the business, operations,
or financial condition of the Mesa Companies taken as a whole.
(b) The legal descriptions of all real properties owned or used
by a Mesa Company or Subsidiary are attached at Schedule 3.10(b) (referred
to herein as the "Real Property"). To the extent any such Real Property is
held in the name of the Shareholder, the Shareholder and the Mesa Companies
agree to, within 125 days after the Closing, take such actions as shall be
requested by Liquids to transfer such real property to a Mesa Company
acceptable to Liquids at such time, at or following the Closing, as such
Real Property may be permissibly transferred. During the period between
the Effective Time and the date upon which any such Real Property is so
transferred, the Shareholder shall make such Real Property available to the
Mesa Companies or Subsidiaries on the same basis upon which he is making it
available to them as of the Effective Date. The parties agree that in
order to enable the Shareholder to transfer such Real Property, the
mortgage indebtedness on such Real Property, in the amounts set forth on
Schedule 3.10(b), shall be required to be satisfied. Liquids agrees that
it shall pay such Real Property mortgage indebtedness following the Closing
and shall pay any other ordinary expenses required to be paid in order to
enable the Shareholder to transfer such Real Property to one or more of the
Mesa Companies as required herein. There are no leases, agreements or
arrangements which create in or confer on any person or entity the right to
occupy, possess, or use all or any portion of the Real Property or create
in or confer on any such person or entity any right, title or interest in
or to the Real Property or any portion thereof; except as set forth on
Schedule 3.10(b), no portion of the Real Property contains any wetlands or
lies within any
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floodway or the 100 year flood plain as determined or designated by the
U.S. Army Corp of Engineers or any other federal, state or local
governmental agency or instrumentality which materially interferes with the
use of the Real Property, except as disclosed in any title insurance policy
furnished to Liquids pursuant to Section 3.7; and there are no claims or
demands pending or, to the best knowledge of the Shareholder, threatened by
any person against the Real Property which, if valid, would create in, or
confer on, any person other than the party identified as the owner thereof
in Schedule 3.10(b), any right, title or interest in or to the Real
Property or any portion thereof or any interest therein.
3.11 PERSONNEL. Schedule 3.11 includes a list, as of the Effective
Date, of all officers, directors and employees of each Mesa Company and each
Subsidiary and their respective rates of compensation (including the portions
thereof attributable to bonuses), including any other salary, bonus or other
compensation arrangement made with any of them.
3.12 EMPLOYMENT AGREEMENTS AND BENEFIT PLANS. None of the Mesa
Companies have any pension, profit-sharing, deferred compensation, stock option,
employee stock purchase or other employee benefit plan or arrangement except as
described on Schedule 3.12.
3.13 CONTINUATION OF BUSINESS. It is the contemplation of the parties
that substantially all employees, agents, and independent contractors who are
regularly engaged in the performance of services in the business of the Mesa
Companies or Subsidiaries prior to Closing shall continue to be willing to
perform those same services on the same terms and conditions as they were
performed prior to Closing, and none of the Mesa Companies has any reason to
know of any such employees, agents, or independent contractors who will not so
continue to perform those services as aforesaid.
3.14 COPIES COMPLETE; NO DEFAULT. The certified copies of the
Articles of Incorporation and Bylaws, both as amended to date, of each Mesa
Company attached as Schedule 3.14, and the copies of all leases, instruments,
agreements, licenses, permits, certificates or other documents which have been
delivered to Liquids in connection with the transactions contemplated hereby are
substantially complete and accurate and are true and correct copies of the
originals thereof, as amended. Except as provided in Schedule 3.14, none of
such leases, instruments, agreements, licenses, permits, certificates or other
documents requires notice to, or the consent or approval of, any governmental
agency or other
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third party to any of the transactions contemplated hereby. Any consents or
approvals that are required shall be obtained by the Mesa Companies prior to
Closing.
3.15 BANK ACCOUNTS. Schedule 3.15 contains a list, as of the date
hereof, of:
(a) the name of each bank in which each Mesa Company or
Subsidiary has accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account; and
(d) the name of each person authorized to draw thereon or have
access thereto.
The Mesa Companies shall regularly update Schedule 3.15, and at Closing the Mesa
Companies shall certify the updated Schedule 3.15 as true and correct.
3.16 NO HAZARDOUS WASTE, OTHER FACILITIES. Except as set forth on
Schedule 3.16,
(a) No Mesa Company or Subsidiary has ever transported or
disposed of, or contracted for the transportation or disposal of, hazardous
wastes, hazardous substances, infectious or medical waste, or radioactive
waste in violation of the Resource Conservation and Recovery Act of 1976,
as amended, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Atomic Energy Act of 1954, as
amended, or any comparable federal or state laws, or rules or regulations
promulgated under any of the foregoing; and
(b) No Mesa Company or Subsidiary has ever owned, operated
and/or leased a hazardous waste transfer, treatment, storage or disposal
facility.
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3.17 NO EXPOSURE TO HAZARDOUS OR TOXIC SUBSTANCES. To the knowledge
of the Mesa Companies, except as set forth in Schedule 3.17, none of the
employees of any Mesa Company or Subsidiary have, in the course and scope of
employment with such Mesa Company or Subsidiary, been exposed in a manner which
would be detrimental to their health to hazardous, infectious, radioactive or
toxic wastes or substances as those terms are defined in the Resource
Conservation and Recovery Act of 1976, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Atomic Energy Act of 1954, as amended, or any comparable federal or state laws,
or rules and regulations promulgated under any of the foregoing.
3.18 UNDERGROUND STORAGE TANKS. To the knowledge of the Mesa
Companies, except as set forth in Schedule 3.18, no Mesa Company has ever owned
or leased any real estate having any underground storage tanks containing
petroleum products or wastes or other hazardous substances and regulated by
40 CFR 280 and/or other applicable federal, state or local laws, rules,
regulations and requirements.
3.19 DISPOSAL FACILITIES USED. Schedule 3.19 contains a list, as of
the Effective Date, of all disposal sites (including dumps, landfills and all
other disposal facilities) utilized at any time since January 1, 1991 by any
Mesa Company for the disposal of any waste materials. For each such disposal
site, the Mesa Companies have provided to Liquids in Schedule 3.19:
(a) the name and address of such disposal site; and
(b) the type or types of waste materials delivered to such
disposal site.
3.20 BORROWED MONIES. None of the Mesa Companies or Subsidiaries is
in default or in violation of any agreement or note for the payment of borrowed
monies. Copies of all notes and other documents relating to indebtedness for
borrowed monies by any Mesa Company or Subsidiaries are identified on an
appropriate schedule hereto.
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3.21 ABSENCE OF CERTAIN CHANGES, EVENTS OR CONDITIONS. Except as
described in Schedule 3.21 or as otherwise expressly provided in or contemplated
by this Agreement, and except for any acts contemplated by, required by, or in
furtherance of the Mergers and the other transactions contemplated as a part of
the plan referred to under the caption "RECITALS" above, since March 31, 1997,
each Mesa Company and Subsidiary has: (a) conducted its business in the
ordinary course, not engaged or agreed to engage in any extraordinary
transactions or distributions, and not engaged or agreed to engage in any other
transaction except at arm's length and for fair consideration; (b) not disposed
of any of its assets, except in the ordinary course of business; (c) not
materially increased the level of compensation of any employee; (d) not issued
any stock or securities or rights with respect to any stock or securities, or
paid any dividends, redeemed any securities or otherwise caused any of its
assets to be distributed to its shareholder; (e) not borrowed any funds under
existing lines of credit or otherwise, except as reasonably necessary for the
ordinary operation of its business in a manner, and in amounts, in keeping with
historical practices, or made any loans or guaranteed the obligations of any
other persons; (f) not suffered any material and adverse change in its assets,
business, or operations, nor have any of its assets suffered any material and
adverse change in value other than ordinary wear and depreciation; (g) not
changed or amended its charter documents or bylaws; (h) not entered into any
contract, commitment, or transaction which is not in the ordinary course of its
business; and (i) not failed to keep its properties and assets insured with at
least as much liability and property damage, fire, and other casualty coverage
as was effective on December 31, 1996.
3.22 TAX RETURNS AND AUDITS. Except as set forth in Schedule 3.22, as
of the Effective Date of this Agreement, each Mesa Company has, and as of the
Closing Date, it will have: (a) filed in accordance with applicable laws all
federal, state, and local tax returns required to be filed by it; (b) paid all
taxes, assessments, penalties, and interest charges shown to be due and payable
on each such return or otherwise due; and (c) accrued or created reserves for
all taxes due or to become due by it for all periods ending before, on or with
the Effective Date. No federal income tax liability of any Mesa Company has
been examined by the Internal Revenue Service during the six-year period ending
on December 31, 1996 nor has there been an examination of any other tax
liability of any Mesa Company during the past six (6) years. Except as set
forth in Schedule 3.22, no Mesa Company (i) has been delinquent in the payment
of any tax, assessment or governmental charge, nor has any tax deficiency been
proposed or assessed against it which has not been satisfied and (ii) has
executed any waiver of the statute of limitations on the assessment or
collection of any tax. Copies of the federal and state income tax returns of
each Mesa Company and each subsidiary, and all
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adjustments and amendments to such returns, for the three years ended
December 31, 1996, together with copies of all reports, as filed, of any taxing
authority relating to examinations thereof, have been previously delivered to
Liquids, and to the knowledge of each Mesa Company, each such tax return is
accurate and complete. Except as set forth in Schedule 3.22, each Mesa Company
has withheld or otherwise collected all taxes or amounts it is required to
withhold or collect under any applicable federal, state, or local law,
including, without limitation, any amounts required to be withheld or collected
with respect to social security, unemployment compensation, sales or use taxes
or workers' compensation, and all such amounts have been timely remitted to the
proper authorities. For purposes of this Section 3.22, the term "tax" or
"taxes" shall include, but not be limited to, income taxes, employment taxes,
excise taxes, sales and use taxes, franchise taxes, and any other tax that may
be imposed by a taxing authority.
None of the Mesa Companies is a party to any tax allocation or sharing
agreement or otherwise under any obligation to indemnify any person with respect
to taxes.
There are no accounting method changes or proposed account method changes
of the Mesa Companies that could give rise to an adjustment under Section 481 of
the Code for any period after the Closing.
There are no requests for rulings in respect of any tax pending between any
of the Mesa Companies and any tax authority.
None of the Mesa Companies is a party to any joint venture, partnership, or
other arrangement that is treated as a partnership for federal income tax
purposes.
3.23 LITIGATION. Except as set forth on Schedule 3.23, to the
knowledge of each Mesa Company, no Mesa Company or Subsidiary is subject to or
bound by any court, regulatory commission, board or administrative judgment,
order or decree, and no suit, action, proceeding or other litigation in any
court or before any administrative or arbitration panel or commission or before
or by any governmental department or agency to which any Mesa Company is a party
or which affects its business or properties is now pending. No Mesa Company has
any knowledge of any governmental proceeding or investigation involving any Mesa
Company or Subsidiary, nor does it have reason to believe that any such
proceeding or investigation is pending or threatened or that there exists any
basis for any such proceeding or investigation, except as may be set forth on
Schedule 3.23. No Mesa Company has any knowledge of any facts which might
reasonably be believed to be a basis for any other action, suit, proceeding,
arbitration, claim, or counterclaim against any Mesa Company or Subsidiary. To
the
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Mesa Companies' knowledge, there are no existing violations of federal, state or
local laws, ordinances, rules, regulations or orders by any Mesa Company or
Subsidiary which materially and adversely affect the business or properties of
the Mesa Companies, taken as a whole.
3.24 RIGHTS AND AUTHORIZATIONS. Each Mesa Company and Subsidiary owns
or holds all licenses, permits, approvals, and other authorizations
(collectively "Authorizations") which are used in or required for its business,
and at Closing, it shall own and hold all such Authorizations, outright and
without material restriction, except as set forth on Schedule 3.24. No Mesa
Company has any knowledge or has received any notice that any such Authorization
is not valid or sufficient or in full force and effect. Except as indicated in
Schedule 3.14 or Schedule 3.24, neither the execution and delivery nor the
consummation of the transactions contemplated hereby will cause a termination
of, or interfere in any respect with, the operation under any such
Authorizations.
3.25 INSURANCE. Schedule 3.25 contains a complete list of all such
insurance policies and a description of all pending claims (including the amount
of coverage thereunder) in effect as of the Effective Date. Such insurance
policies are owned exclusively by one or more Mesa Companies, except for life
insurance policies insuring the lives of employees of one or more of the Mesa
Companies. Except as specified in such policies, no Mesa Company has any
knowledge that any such insurance policies are subject to any retroactive rate
or audit adjustments or co-insurance arrangements. No notice of cancellation or
nonrenewal of or disallowance of any claim under any such policy has been
received.
3.26 NO CONFLICTS. Except as provided in Schedule 3.26, neither the
execution and delivery of this Agreement nor any of the related documents
contemplated hereby will violate, conflict with, or result in a breach of any
provisions of, or constitute a material default (or an event which, with notice
or lapse of time or both would constitute a material default) under, or result
in the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
lien, security interest, or encumbrance upon any of the properties or assets of
any Mesa Company or Subsidiary or otherwise comprising a part of the business of
the Mesa Companies or Subsidiaries under any of the terms, conditions or
provisions of (i) any of their respective charter documents or bylaws, or under
(ii) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation, to which any Mesa Company or
Subsidiary is a party or to which it or any of its properties or assets may be
subject.
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3.27 CONSENTS. Except as listed in Schedule 3.27, no notice to,
approval by, filing with, or authorization, consent or approval of, any federal,
state, local or other public body, agency or authority or any other third party
is necessary for the consummation of the transactions contemplated by this
Agreement and the carrying on of the business of the Mesa Companies and
Subsidiaries following the Closing Date. The foregoing notwithstanding, the
Mesa Companies make no representation or warranty as to the application of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or the Exon-Xxxxxx Amendment, Section 721 of the Defense Production Act
of 1950 ("Exon-Xxxxxx"), to the transactions contemplated by this Agreement. It
shall be the sole obligation of Liquids to determine the application of the HSR
Act or Exon-Xxxxxx to the transactions contemplated by this Agreement. To the
extent Liquids determines that the HSR Act or Exon-Xxxxxx applies to the
transactions contemplated by this Agreement the parties hereto shall cooperate
to comply therewith and all expenses incurred in complying with the HSR Act or
Exon-Xxxxxx shall be borne by Liquids.
3.28 ENVIRONMENTAL MATTERS. To the knowledge of the Mesa Companies,
except as set forth in Schedule 3.28, each Mesa Company and Subsidiary currently
is and at all times in the past has operated in substantial compliance in all
material respects with all federal, state and local laws, rules and regulations
(collectively, the "Environmental Laws") relating to the use, management,
handling, transport, treatment, generation, storage, disposal, release or
discharge of hazardous substances or wastes. Except as set forth in Schedule
3.28, no governmental agency has conducted any extraordinary audits,
assessments, tests or other reviews in connection with any Mesa Company's or
Subsidiary's compliance with any Environmental Law.
3.29 APPROVAL BY SHAREHOLDER AND DIRECTORS. This Agreement, each of
the Mergers, and all transactions contemplated hereby have been duly approved by
the Board of Directors of each Mesa Company and by the Shareholder in accordance
with applicable law and the Bylaws and the Articles of Incorporation of each
Mesa Company. Immediately following the execution of this Agreement, each Mesa
Company will provide to Liquids a copy, certified by the secretary of such
Company to be true and correct, of the resolutions of the Board of Directors and
Shareholder approving this Agreement, the applicable Merger, and the
transactions contemplated hereby. Neither the Shareholder nor any other person
has or will exercise any appraisal or dissenter's rights in connection with any
of the applicable Mergers.
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3.30 SPECIFIC REPRESENTATIONS AND WARRANTIES RELATING TO POOLING-OF-
INTERESTS ACCOUNTING.
(a) No Mesa Company has acquired any treasury stock during the
two-year period preceding the date hereof.
(b) Neither the voting stock structure of any Mesa Company nor
the relative ownership of shares of any Mesa Company has been altered or
changed materially within the two (2) years preceding the Effective Date.
(c) To the knowledge of each Mesa Company, there has been no
other transaction or action taken with respect to the equity ownership of
that Mesa Company in contemplation of the Mergers which would prevent
Liquids from accounting for the Mergers on a pooling-of-interests basis for
financial accounting purposes.
(d) No Mesa Company has been a subsidiary or division of another
corporation during the two-year period prior to the Effective Date.
(e) There has been no sale of any significant assets of any Mesa
Company other than in the ordinary course of business during the two-year
period preceding the Effective Date.
(f) The Shareholder will exercise his voting rights as to the
Liquids Stock to be received by him in the Mergers, and there will be no
mechanisms such as a voting trust or other shareholders' or voting trust
agreement that would in any way deprive or restrict the Shareholder from
exercising his voting rights as to the Liquids Stock received by him in the
Mergers.
3.31 DISCLOSURE SCHEDULES. Anything disclosed under any Schedule
referenced in this Section 3 shall be deemed disclosed under each and every
other Schedule referenced in this Section 3.
SECTION 4
RESALES OF LIQUIDS STOCK
4.1 STOCK DISTRIBUTION AGREEMENT. Contemporaneously with the
execution of this Agreement, the Shareholder shall deliver to Liquids a fully
executed Stock Distribution Agreement, in the form attached hereto as Exhibit
4.1. Liquids will also fully execute such Stock Distribution Agreement
contemporaneously with the execution of this Agreement.
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4.2 INVESTMENT REPRESENTATIONS AND WARRANTIES. The Shareholder
represents and warrants to Liquids, effective as of the date of this Agreement
and again as of the Closing Date, as follows:
(a) INVESTMENT INTENT. The Shareholder is acquiring the Liquids
Stock for his own account, as principal, for the purpose of investment, and
except as to the Liquids Stock to be registered for resale under the Stock
Distribution Agreement, not with a view to or for sale in connection with
any distribution thereof.
(b) ACCESS TO INFORMATION. The Shareholder has to his
satisfaction reviewed the business and affairs of Liquids and understands
the risks of, and other considerations relating to, his receipt of the
Liquids Stock. The Shareholder (i) has been furnished a copy of all
materials and information requested by him relating to Liquids and its
activities and proposed activities and any other information or materials
concerning Liquids and the Liquids Stock which he will receive as a result
of the Mergers, and (ii) has been afforded access and the opportunity to
obtain any and all information which he deems relevant and material to make
an informed decision as to his acquisition of the Liquids Stock, and to ask
questions of and receive answers from the officers, directors and employees
of Liquids including, without limitation, the background and experience of
such officers and directors and the current conduct, and status, and
prospects of Liquids' business.
(c) INVESTMENT ADVICE. The Shareholder has not relied on any
investment advice from Liquids or anyone acting on Liquids' behalf or on
any investment advisor other than his own attorneys, accountants, and
personal business and investment advisors in connection with evaluating the
risks and merits of owning Liquids Stock. The Shareholder acknowledges
that Liquids has advised him that he should seek professional advice from
his attorneys, accountants, and business and investment advisors with
respect to the risks and merits of ownership of the Liquids Stock and the
advisability of entering into this Agreement. However, the parties
acknowledge that the Shareholder is entitled to, and in fact has, relied
upon all representations, warranties, agreements, and covenants made by
Liquids and the Newco Companies in this Agreement and in all exhibits,
schedules, agreements, and documents related hereto.
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SECTION 5
REPRESENTATIONS AND WARRANTIES OF LIQUIDS
Liquids represents, warrants, and covenants to the Shareholder, effective
as of the date of this Agreement and again as of the Closing Date, as follows:
5.1 CORPORATE ORGANIZATION. Each of Liquids and the Newco Companies
is a corporation duly organized, validly existing and in good standing under the
laws of the state of its domicile, and has all requisite corporate power and
authority to enter into this Agreement and perform its obligations hereunder.
5.2 AUTHORIZATION. Liquids has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The Board of Directors of Liquids and each Newco Company
have, and the shareholder of each Newco Company has, duly authorized the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. No other corporate proceedings on the part of
Liquids or any Newco Company is necessary to approve and authorize the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement constitutes the valid and binding agreement
of Liquids and the Newco Companies, enforceable against them in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and except as such enforceability may be affected by
equitable principles (whether considered in a proceeding at law or in equity).
5.3 CAPITALIZATION. As of the date of this Agreement, the authorized
stock and securities of Liquids consist of 50,000,000 shares of common stock,
$.01 par value per share, of which 3,538,875 shares (post-reverse split) are
issued and outstanding. The authorized stock and securities of each Newco
Company consist solely of ten thousand (10,000) shares of common stock, $.01 par
value per share, of which one thousand (1,000) shares are issued and
outstanding. All of such issued and outstanding shares of capital stock of
Liquids and the Newco Companies have been duly authorized and validly issued and
are fully paid and nonassessable. Except as described in Schedule 5.3, there
are no outstanding or authorized subscriptions, options, contracts, commitments,
warrants, calls, agreements, understandings or other arrangements or rights of
any character affecting or relating in any manner to the issuance of capital
stock or other securities of Liquids (whether by subscription, option, exchange,
right of conversion, right of refusal or otherwise) or entitling
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anyone to acquire shares of the capital stock of Liquids or other securities of
any kind of Liquids.
5.4 COPIES COMPLETE; NO DEFAULT. The certified copies of the
Certificate of Incorporation and Bylaws, both as amended to date, of Liquids and
the Newco Companies and the copies of all other documents which have been
delivered by Liquids to the Mesa Companies in connection with the transactions
contemplated hereby are substantially complete and accurate and are true and
correct copies of the originals thereof; and the execution of this Agreement and
the performance of the obligations hereunder will not violate or result in a
breach or constitute a default under any of the terms and provisions hereof.
5.5 NO CONFLICT. Neither the execution and delivery of this
Agreement nor any other related documents contemplated hereby will violate,
conflict with, or result in a breach of any provisions of or constitute a
default (or an event which, with the giving of notice or lapse of time, or both,
would constitute a default) under or result in the termination of or accelerate
the performance required by or result in a right of termination or acceleration
under or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Liquids or the Newco
Companies under any of the terms, conditions or provisions of (i) the charter
documents or bylaws of Liquids and the Newco Companies, or (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Liquids or any Newco Company is a party or to
which either of them or any of their properties or assets may be subject.
5.6 LITIGATION. Except as set forth on Schedule 5.6, to its
knowledge, Liquids (which for purposes of this Section 5.6 includes any first
tier or more remote subsidiary corporation of Liquids) is not subject to or
bound by any court, regulatory commission, board or administrative judgment,
order or decree, and no suit, action, proceeding or other litigation in any
court or before any administrative or arbitration panel or commission or before
or by any governmental department or agency to which Liquids is a party or which
affects the business or properties of Liquids is now pending; Liquids has no
knowledge of any governmental proceeding or investigation involving Liquids nor
does it have reason to believe that any such proceeding or investigation is
pending or threatened or that there exists any basis for any such proceeding or
investigation, except as may be set forth on Schedule 3.23; to its knowledge,
there are no existing violations of federal, state or local laws, ordinances,
rules, regulations or orders by Liquids which materially and adversely affect
the
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business or property of Liquids or the possession, use, occupancy or operation
of any of its facilities or business.
5.7 REPRESENTATIONS AND WARRANTIES RELATING TO POOLING-OF-INTERESTS
ACCOUNTS. Liquids will not knowingly take or cause to be taken any action or
cause any matter to occur which might reasonably prevent the Mergers to be
accounted for as a pooling-of-interests.
5.8 BROKERS, FINDERS, ETC. All negotiations relating to this
Agreement and transactions contemplated hereby have been carried on without the
intervention of any broker, finder, or other person, acting on behalf of Liquids
in any manner as to give rise to any claim against Liquids for any brokerage,
finder's, or similar fee or commission.
5.9 FINANCIAL STATEMENTS. Liquids has delivered to the Shareholder
copies of the following financial statements (the "Financial Statement") of
Liquids at Schedule 5.9:
(i) Balance Sheet as of December 31, 1996; and
(ii) Income Statement for the period from inception to December
31, 1996.
The Balance Sheet fairly presents the financial condition of Liquids as of the
date set forth thereon, and the Income Statement fairly presents the results of
operation for the period indicated thereon, all in accordance with generally
accepted accounting principles, subject to year-end audit adjustments and the
absence of complete footnotes.
5.10 ACCURACY OF REGISTRATION STATEMENT. As of the Effective Date,
Liquids is preparing a registration statement to be filed by Liquids with the
SEC on Form S-1 (the "Registration Statement") as soon as practicable following
the closing of the Mergers. Liquids hereby represents and warrants that the
Registration Statement, when filed, will not to Liquids' knowledge contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
However, Liquids shall have no responsibility hereunder for any untrue
statements of a material fact or omissions to state a material fact in the
Registration Statement which are derived from information which has been
provided to or which should have been provided to Liquids by the Shareholder or
any of the Mesa Companies in respect of the Shareholder or the Mesa Companies.
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5.11 REPRESENTATIONS RELATING TO TAX-FREE REORGANIZATIONS.
(a) Prior to the Mergers, Liquids will be in control of each Newco
Company within the meaning of Code Section 368(c).
(b) Following the Mergers, Liquids has no plan or intention to issue
additional shares of capital stock of any Mesa Company which would result
in Liquids losing control of that Mesa Company within the meaning of
Section 368(c) of the Internal Revenue Code.
(c) Liquids has no plan or intention to reacquire any of the Liquids
Stock issued in the Mergers.
(d) Liquids has no plan or intention to (i) liquidate any Mesa
Company, (ii) merge any Mesa Company with or into another corporation,
(iii) sell or otherwise dispose of the stock of any Mesa Company except for
transfers of stock to corporations controlled by Liquids, or (iv) cause any
Mesa Company to sell or otherwise dispose of any of its assets or of any of
the assets acquired from any Newco Company, except for dispositions made in
the ordinary course of business or transfers of assets to a corporation
controlled by Liquids.
(e) No Newco Company will have any liabilities assumed by any Mesa
Company, and will not transfer to any Mesa Company any assets subject to
liabilities in the Mergers.
(f) The Newco Companies were formed expressly for the purpose of
effecting the Mergers, and as a result of the Mergers, the Mesa Companies
will hold 100% of the Newco Companies' assets held by the Newco Companies
immediately prior to the Mergers.
(g) Following the Mergers, Liquids shall cause the Mesa Companies to
continue their historic business or use a significant portion of their
historic business assets in a business.
(h) There is no intercorporate indebtedness existing between any Mesa
Company and Liquids or between any Newco Company and any Mesa Company.
(i) The Liquids Stock is voting common stock of Liquids as described
in Code Section 368(a)(2)(E).
(j) Liquids does not own, nor has it owned in the past five (5)
years, any stock of any Mesa Company.
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(k) Neither Liquids nor any Newco Company is an investment company as
defined in Code Section 368(a)(2)(F)(iii) and (iv).
5.12 ABSENCE OF VOTING OR BUY-SELL AGREEMENT. There is no existing
agreement to which Liquids is a party which imposes any voting obligation or
buy-sell obligation with respect to any Liquids Stock, except as set forth in or
contemplated by this Agreement or the AWW Merger Agreement.
SECTION 6
COVENANTS
The Mesa Companies jointly and severally make certain covenants to Liquids
and the Newco Companies, and Liquids and the Newco Companies jointly and
severally make certain covenants to the Mesa Companies below. Further, the
Shareholder guarantees the full and complete performance by the Mesa Companies
of those matters set forth in Sections 6.1, 6.4, 6.6 and 6.10 and makes the
covenants set forth in Section 6.7 and Section 6.14.
6.1 CONDUCT OF BUSINESS. Except as otherwise provided for or
contemplated by this Agreement or in Schedule 6.1, and except for any acts
contemplated by, required by, or in furtherance of the Mergers and the other
transactions contemplated as a part of the plan referred to under the caption
"RECITALS" above, during the period from the Effective Date of this Agreement to
the Effective Time, each Mesa Company agrees that it will conduct its business
and operations according to its ordinary and usual course and consistent with
past practice, and will use its commercially reasonable best efforts to preserve
intact its business organization, to keep available the services of its officers
and employees and to maintain satisfactory relationships with licensors,
licensees, suppliers, contractors, distributors, customers and others having
business relationships with it. Except as otherwise expressly provided in or
contemplated by this Agreement, and except for any acts contemplated by,
required by, or in furtherance of the Mergers and the other transactions
contemplated as a part of the plan referred to under the caption "RECITALS"
above, prior to the Effective Time, each Mesa Company agrees that it will not,
without the prior written consent of Liquids, which Liquids shall not
unreasonably withhold, do any of the things listed in this Section 6.1.
Further, except as otherwise expressly provided in or contemplated by this
Agreement, and except for any acts contemplated by, required by, or in
furtherance of the AWW Mergers, and the other transactions contemplated as a
part of the plan referred to under the caption "RECITALS" above, Liquids will
not do any of the acts listed below
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without the prior written consent of the Mesa Companies, which consent shall not
be unreasonably withheld. The acts referred to above are as follows:
(a) amend its Articles of Incorporation or Bylaws (and in the
case of Liquids, amend its Certificate of Incorporation or Bylaws);
(b) authorize for issuance, issue, sell or deliver (whether
through the issuance or granting of additional options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of
any class or any securities convertible into shares of stock of any class;
(c) split, combine or reclassify any shares of its stock, or
redeem or otherwise acquire any shares of the stock;
(d) (i) create, incur or assume any debt (other than debt
created, incurred or assumed in the ordinary course of its business,
consistent with past practice and with respect only to acquisition by it of
property used in the ordinary course of business); (ii) create, incur or
assume any (A) long-term debt (including capitalized lease obligations), or
(B) short-term debt except trade payables incurred in the ordinary course
of business and consistent with past practice; (iii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person; or (iv)
make any loans, advances or capital contributions to, or investments in,
any other person or entity, other than short-term investments in financial
instruments in the ordinary course of business and consistent with past
practice;
(e) (i) increase in any manner the compensation of any of its
directors, officers or other employees; or (ii) commit itself to any
additional pension, profit-sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right, group
insurance, severance pay, retirement or other employee benefit plan,
agreement or arrangement, or to any employment or consulting agreement with
or for the benefit of any person, or amend any of such plans or any of such
agreements in existence on the date hereof;
(f) sell, transfer, mortgage, or otherwise dispose of or
encumber any real property;
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(g) except in the ordinary course of business and consistent
with past practice or pursuant to contractual obligations existing on the
date hereof (i) sell, transfer, mortgage, or otherwise dispose of or
encumber any personal property with a market value which, individually or
in the aggregate, exceeds $10,000; (ii) pay, discharge or satisfy claims,
liabilities or obligations (absolute, accrued, contingent or otherwise); or
(iii) cancel any debts or intentionally waive any claims or rights;
(h) make any capital expenditure or commitment except in the
ordinary course of business consistent with past practices and in an amount
in excess of $10,000 individually or in the aggregate;
(i) enter into any other agreements, commitments or contracts
which, individually or in the aggregate, are material, except agreements,
commitments or contracts expressly provided for or contemplated by this
Agreement or for the purchase, sale or lease of goods or services in the
ordinary course of business, consistent with past practice and not in
excess of current requirements or for the provision of data processing or
related services in the ordinary course of business and consistent with
past practice, or otherwise make any material change in the conduct of its
business or operations, taken as a whole;
(j) make any distribution with respect to any of the Mesa
Companies Stock; or
(k) agree, whether in writing or otherwise, to do any of the
foregoing.
6.2 ACCESS TO INFORMATION.
(a) The Mesa Companies will afford Liquids and its
representatives access, during normal business hours, to all of its
business, operations, properties, books, files and records and will
cooperate in the examination thereof. Liquids agrees that all information,
including the existence and contents of this Agreement and the other
agreements among the parties, so provided will be treated as confidential
(except for necessary disclosures to professional advisors, and except for
securities law disclosures, and further except for disclosures to any
underwriter with whom Liquids negotiates to offer and sell its stock), that
Liquids will not disclose or make any use of such confidential information
unless the same is or shall become available to it through nonconfidential
means or shall otherwise come into the public domain. If the transactions
contemplated by this Agreement are not consummated for any reason, then
after this Agreement
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is terminated, Liquids will continue to hold in confidence all information
obtained from the Mesa Companies and will return to the Mesa Companies all
copies of any confidential documents obtained by Liquids in connection with
the transactions contemplated by this Agreement.
(b) Liquids will afford the Shareholder access, during normal
business hours, to all of its business, operations, properties, books,
files and records and will cooperate with the Shareholder and his
representative in the audit and examination thereof and will do everything
reasonably necessary to enable the Shareholder and his representative to
make a complete examination of the business, assets and properties of
Liquids and the condition thereof. The Shareholder agrees that all
information, including the existence and contents of this Agreement and the
other agreements among the parties, so provided will be treated as
confidential (except for necessary disclosures to professional advisors,
and except for any disclosures required by law, including securities law
disclosure and further except for disclosures to any underwriter with whom
Liquids negotiates to offer and sell its stock), that the Shareholder will
not disclose or make any use of such confidential information unless the
same is or shall become available to it through nonconfidential means or
shall otherwise come into the public domain. If the transactions
contemplated by this Agreement are not consummated for any reason, then
after this Agreement is terminated, the Shareholder will continue to hold
in confidence all information obtained from Liquids and will return to
Liquids all copies of any confidential documents obtained by Mesa or the
Shareholder in connection with the transactions contemplated by this
Agreement.
6.3 PUBLIC ANNOUNCEMENTS. Each Mesa Company, its officers and
directors, employees, and agents will consult with Liquids before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement and shall not issue any such press
release or make any such public statement without Liquids' prior approval.
Liquids will use its commercially reasonable best efforts to consult with the
Shareholder before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement.
6.4 NOTIFICATION OF MATERIAL EVENTS. Each party shall promptly
notify the others in writing of the occurrence of any event which will or could
reasonably be expected to result in its failure to satisfy any of the
representations, warranties, covenants, or conditions specified in this
Agreement.
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6.5 CERTAIN EMPLOYEE MATTERS. The Mesa Companies will each take
reasonable steps necessary to maintain and enforce all employment contracts and
noncompetition and nondisclosure agreements which it now has and has had with
its employees and former employees.
6.6 EMPLOYMENT AGREEMENTS. The Shareholder shall execute and deliver
to Liquids at Closing the Employment Agreement in the form attached hereto at
Exhibit 6.6, which shall also be executed and delivered by Liquids at Closing.
6.7 THIS SECTION HAS BEEN INTENTIONALLY LEFT BLANK.
6.8 NONCOMPETITION. At Closing, the Shareholder shall deliver a
Noncompetition Agreement which shall be fully executed and in the form set forth
at Exhibit 6.8.
6.9 ELECTION OF SHAREHOLDER TO BOARD OF DIRECTORS OF LIQUIDS. At
Closing, the Shareholder will execute the Stock Voting Agreement in the form set
forth at Exhibit 6.9, and Liquids will use its commercially reasonable best
efforts to cause the Stock Voting Agreement to be executed by Xxxxxxx X. Xxx,
the Xxxxx Xxxxxxx & Xxxxxx X. Xxx Family L.L.C., Xxxx X. Xxxxxxxxx, the Xxxx X.
and Xxxxxxxxx X. Xxxxxxxxx Family L.L.C., and Xxxxxxx X. XxXxxxx. Following
Closing, Liquids will use its commercially reasonable best efforts to cause Xxxx
Xxxxxx to execute and become a party to the Stock Voting Agreement. The
execution of this Stock Voting Agreement shall be a condition to Closing as
further described in Section 7.
6.10 REDEMPTION OF MESA SERIES A PREFERRED STOCK. At Closing, the
Mesa Companies and the Shareholder shall cause all 10,000 shares of issued and
outstanding Series A Preferred Stock of Mesa and the Promissory Note of Mesa,
dated May 5, 1993, originally payable to Xxxxxx X. Xxxxx, Xx., M.D. in the
original principal amount of $60,000 to be redeemed by one or more of the Mesa
Companies for a redemption price not to exceed $120,000, including any amounts
paid for any accrued or other dividends owing on the Series A Preferred Stock.
Liquids shall provide to the Mesa Companies the funds necessary for the
redemption of such shares of Series A Preferred Stock and Promissory Note.
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6.11 LIQUIDS STOCK OPTIONS. Liquids has adopted a stock option plan
entitling optionees to purchase Liquids Stock. Following the Closing, options
to purchase not less than 62,500 shares of Liquids Stock will be granted to
those employees of the Mesa Companies as designated by the Shareholder, and if
he fails for any reason to do so within sixty (60) days after the Closing Date,
then those options shall be granted to such employees of the Mesa Companies as
Liquids deems deserving. It is contemplated by the parties that the exercise
price of these stock options shall be a price per share equal to or not
materially different from the anticipated price per share for which Liquids
Stock will be sold in an initial public offering presently being prepared for by
Liquids and certain other necessary persons. The exercise price of these
options to be granted pursuant to this Section 6.11 shall not be less than the
exercise price of the stock options contemporaneously granted to other optionees
under that stock option plan. The exercise price of these options shall be
adjusted as appropriate for any recapitalization, stock dividend, or other
change in capital structure or capitalization. Liquids will use its
commercially reasonable efforts to cause these options to qualify as incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended.
6.12 RESIGNATIONS. Each officer and director of each Mesa Company and
Subsidiary (other than those whom Liquids shall have specified in writing at
least two [2] days prior to the Closing and except for Xxxxx MCG. Xxxxxxxxx as
the required Barbados director of MII) shall execute and deliver to Liquids at
Closing his or her written resignation as an officer or director of such Mesa
Company effective as of the Closing.
6.13 AMENDMENTS TO LIQUIDS/AWW MERGER AGREEMENT. Liquids does not
presently contemplate entering into any amendment to the Liquids/AWW Merger
Agreement. However, in the event the Liquids/AWW Merger Agreement is amended,
then Liquids shall promptly give notice thereof to Shareholder. If any such
amendment would have a material adverse effect upon the Mesa Companies, then the
Shareholder shall have the right, for a period of ten (10) days following the
receipt of notice of such amendment, to give notice to Liquids that he desires
to terminate this Agreement.
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6.14 CERTAIN INDEBTEDNESS. The parties acknowledge and agree that
those liabilities listed on Schedule 6.14 (the "Shareholder's Personal
Liabilities") have been incurred by the Shareholder on behalf of the Mesa
Companies or have been incurred by a Mesa Company and guaranteed by the
Shareholder and, as between the Mesa Companies and the Shareholder, have been
treated as liabilities of the Mesa Companies. At the Closing, the Mesa
Companies shall assume and become responsible for all of the Shareholder's
Personal Liabilities. As soon as practicable following Closing, but in any
event within the earlier of thirty (30) days following the date upon which the
Registration Statement referred to in Section 5.10 is declared effective or 120
days following Closing, Liquids will cause the Shareholder to be released from
any personal liability on those eleven (11) Shareholder's Personal Liabilities
set forth on Schedule 6.14 and marked with an asterisk. As soon as practicable
following Closing, but in any event within the earlier of thirty (30) days
following the date upon which the Registration Statement referred to in Section
5.10 is declared effective or 120 days following Closing, Liquids will use its
commercially reasonable efforts to cause the Shareholder to be released from any
personal liability on the Shareholder's Personal Liabilities listed on Schedule
6.14 but not marked with an asterisk. To the extent that the Shareholder is not
released from any of the Shareholder's Personal Liabilities listed on Schedule
6.14 and not marked with an asterisk, Liquids will indemnify the Shareholder
from expenses or losses incurred by him in connection with such Shareholder's
Personal Liabilities.
SECTION 7
CLOSING CONDITIONS
7.1 CONDITIONS TO THE OBLIGATIONS OF LIQUIDS AND THE NEWCO COMPANIES.
Each and every obligation of Liquids and the Newco Companies under this
Agreement and under the other agreements, instruments, and documents related to
this Agreement (the "Related Documents") shall be subject to the satisfaction,
as of Closing, of each of the following conditions, each of which can be waived
by Liquids, but only in writing:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Mesa Companies and the Shareholder
contained in this Agreement shall be true and correct as of the date hereof
and shall be deemed to have been made again at Closing and shall then be
true and correct, except for any inaccuracy of a representation or warranty
which in the reasonable opinion of Liquids is not material.
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(b) PERFORMANCE OF COVENANTS. Each of the covenants and other
obligations of the Mesa Companies and the Shareholder to be performed by
any of them on or before Closing pursuant to the terms hereof shall have
been duly performed and complied with in all material respects, except for
the failure to perform or comply with any covenant or obligation which in
the reasonable opinion of Liquids is not material.
(c) NO ADVERSE PROCEEDINGS OR EVENTS. No suit, action or other
proceeding shall be pending before any court or governmental agency in
which it is sought to restrain or prohibit any of the transactions
contemplated by this Agreement or to obtain damages or other relief in
connection with this Agreement or the transactions contemplated hereby,
unless such suit, action or proceeding is without substantial merit or
basis.
(d) DELIVERIES AT CLOSING. All documents or instruments
required to be delivered at Closing by Mesa and/or the Shareholder shall be
delivered and tendered at Closing.
(e) OPINION OF COUNSEL. At Closing, Liquids shall receive an
opinion from Reihsen & Associates, counsel to the Mesa Companies and the
Shareholder, dated the Closing Date, in the form set forth at Exhibit
7.1(e).
(f) QUALIFICATION AS POOLING OF INTEREST. There shall be no
material risk that any of the Mesa Mergers will not qualify as a "pooling
of interests" for financial accounting purposes.
(g) CLOSING OF THE AWW MERGER. The closing of the Mesa Mergers
shall be conditional upon the contemporaneous closing of the AWW Merger.
7.2 CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDER AND THE MESA
COMPANIES. Each and every obligation of the Mesa Companies and the Shareholder
under this Agreement shall be subject to the satisfaction at Closing of the
following conditions, each of which may be waived by the Shareholder, but only
in writing:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in Section 5 hereof shall be true
and correct as of the date hereof and shall be deemed to have been made
again at Closing and shall then be true and correct, except for any
inaccuracy of a representation or warranty which in the reasonable opinion
of the Shareholder is not material.
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(b) PERFORMANCE OF COVENANTS. Each of the covenants and other
obligations of Liquids and the Newco Companies to be performed by them on
or before Closing pursuant to the terms hereof shall have been duly
performed and complied with in all material respects, except for the
failure to perform or comply with any covenant or obligation which in the
reasonable opinion of the Shareholder is not material.
(c) NO ADVERSE PROCEEDINGS OR EVENTS. No suit, action or other
proceeding shall be pending before any court or governmental agency in
which it is sought to restrain or prohibit any of the transactions
contemplated by this Agreement or to obtain damages or other relief in
connection with this Agreement or the transactions contemplated hereby,
unless such suit, action or proceeding is without substantial merit or
basis.
TAB DELIVERIES AT CLOSING. All documents or instruments
required to be delivered at Closing by Liquids or the Newco Companies or
their respective shareholders shall be delivered and tendered at Closing.
(e) OPINION OF COUNSEL. At Closing, Liquids' counsel, Xxxxxxx
Xxxxxx & Xxxxx, a professional corporation, shall deliver to the
Shareholder and the Mesa Companies its opinion, dated the Closing Date, in
the form set forth at Exhibit 7.2(e).
(f) CLOSING OF THE AWW MERGER. The closing of the Mesa Mergers
shall be conditional upon the contemporaneous closing of the AWW Merger.
(g) COMPLETE EXECUTION OF STOCK VOTING AGREEMENT. At Closing,
Liquids shall deliver to the Shareholder the Stock Voting Agreement,
referred to in Section 6.9, fully executed by Xxxxxxx X. Xxx, the Xxxxx
Xxxxxxx & Xxxxxx X. Xxx Family L.L.C., Xxxx X. Xxxxxxxxx, the Xxxx X. and
Xxxxxxxxx X. Xxxxxxxxx Family L.L.C., and Xxxxxxx X. XxXxxxx.
SECTION 8
CLOSING
8.1 TIME AND PLACE. The closing (the "Closing") of the transactions
contemplated in this Agreement shall occur as soon as possible after all
conditions to Closing contained herein are satisfied (the "Closing Date"), at
Houston, Texas, or at such other place or at such other time as Liquids may
designate.
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8.2 DELIVERIES BY SHAREHOLDER AT CLOSING. At Closing, the
Shareholder and the Mesa Companies shall deliver the following Related
Documents, each of which shall be fully executed and completed as appropriate or
as required under this Agreement:
(a) all stock certificates representing all shares of Mesa
Stock, T&T Stock, and Phoenix Stock issued and outstanding as of the
Effective Time;
(b) the opinion of counsel referred to in Section 7.1(e);
(c) the executed Employment Agreement referred to in
Section 6.6;
(d) all corporate books, minutes, records, tax returns, reports,
etc. related to the Mesa Companies and their respective businesses;
(e) the Noncompetition Agreement referred to in Section 6.8;
(f) the resignations referred to in Section 6.12; and
(g) all other certificates, documents, and other instruments
required to be delivered by the Mesa Companies or the Shareholder pursuant
to this Agreement.
8.3 DELIVERIES BY LIQUIDS AT CLOSING. At Closing, Liquids shall
deliver the following Related Documents, each of which shall be fully executed
and completed as appropriate or as required under this Agreement:
(a) all stock certificates representing all shares of Liquids
Stock required to be delivered by Liquids to the Shareholder pursuant to
this Agreement;
(b) the opinion of counsel to Liquids referred to in Section
7.2(e);
(c) the executed Employment Agreement referred to in Section
6.6; and
HL all other certificates, documents, and other instruments
required to be delivered by Liquids pursuant to this Agreement.
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8.4 EXPENSES OF CLOSING. The Mesa Companies have engaged the
services of Reihsen & Associates as legal counsel to the Mesa Companies in
connection with the transactions contemplated by this Agreement. The Mesa
Companies shall submit to Liquids all invoices for legal services so incurred by
the Mesa Companies. All invoices for legal services and charges shall be on a
reasonably detailed line-item form basis. Liquids agrees to promptly pay any
such legal fees and expenses. It is acknowledged that certain of such fees and
expenses will be for services which have benefitted the Shareholder in
connection with the transactions contemplated by this Agreement. Any such legal
fees and expenses shall be deemed to have been incurred by the Mesa Companies
and shall be payable hereunder. This Section 8.4 shall not limit any expenses
which are incurred by the Mesa Companies or the Shareholder in connection with
any matters for which they are indemnified pursuant to this Agreement or in any
Related Document. No amounts payable to Liquids' accountants, attorneys,
underwriters, investment bankers, or other outside consultants (collectively,
"Consultants"), regardless of whether such Consultants perform services in
respect of the Mesa Companies or the Shareholder (including, without limitation,
preparation of financial statements of the Mesa Companies or any registration
statements or portions thereof), shall be included within the expenses deemed to
have been incurred by the Mesa Companies. Liquids shall be solely responsible
for the payment of all fees and expenses of any Consultants engaged by it.
SECTION 9
TERMINATION
9. MUTUAL CONSENT. This Agreement may be terminated by the mutual
consent of the Shareholder and Liquids.
9.2 BY LIQUIDS. This Agreement may be terminated by Liquids if a
material default shall be made by any Mesa Company or the Shareholder in the
observance of or in the due and timely performance by any of them of any of
their respective material agreements and covenants herein contained, or if there
shall have been a material breach by any of them of any of their respective
material warranties and representations herein contained, or if the conditions
of this Agreement to be complied with or performed by any of them at or before
Closing shall not have been complied with or performed on or before August 1,
1997, unless such noncompliance or nonperformance shall have been waived by
Liquids in writing. Notwithstanding the foregoing, if any Mesa Company or the
Shareholder materially defaults in the observance of or in the due and timely
performance of any of the material agreements and covenants herein contained or
materially breaches any of the material warranties and representations herein
contained, and if that material default or breach is curable by such defaulting
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party, then the defaulting party may give notice (the "Notice of Intent to
Cure") to Liquids, making express reference to this Section 9.2 and setting
forth in detail the facts and circumstances of the material default or breach
and further setting forth such defaulting party's intent to cure the same and
describing how the material default or breach will be cured. Within seven (7)
business days of this Notice of Intent to Cure by the defaulting party, Liquids
will give a response notice to such defaulting party (the "Response Notice") as
to whether Liquids consents to the proposed cure of the material default or
breach by such defaulting party; provided, however, that Liquids shall not
unreasonably withhold consent to cure. The failure by Liquids to give a timely
Response Notice shall be deemed to be a consent by Liquids to the proposed cure.
If consent to cure is granted by Liquids, then such defaulting party shall have
ten (10) days following the date of Liquids' Response Notice (or if no Response
Notice is given, then seventeen (17) days from the date of the Notice of Intent
to Cure) to cause the material default or breach to be cured. For purposes of
this Section 9.2, a material default in the observance of or in the due and
timely performance of any of the material agreements and covenants herein
contained is curable only if the defaulting party can cause such material
agreements and covenants to be observed and performed, and so long as such cure
will cause the material default to become immaterial. For purposes of this
Section 9.2, a material default of any of the material warranties and
representations herein contained is curable only if the defaulting party causes
such material warranties and representations to become true and correct, and so
long as the failure of any such material warranties and representations to be
true and correct is rendered immaterial. In the event that any Mesa Company or
the Shareholder materially defaults in the observance of or in the due and
timely performance of any of the material agreements and covenants herein
contained or materially breaches any of the material warranties and
representations herein contained, and if that material default or breach is
curable by such defaulting party, and if such defaulting party does not give
Notice of Intent to Cure to Liquids, as described above, then Liquids shall have
the right to terminate this Agreement, but only after first giving notice of its
intent to terminate to the Shareholder, in which event the defaulting party
shall have the right, for a period of five (5) business days from that notice,
to give to Liquids a Notice of Intent to Cure. Failure by the defaulting party
to give the Notice of Intent to Cure shall be deemed a waiver of that right. If
a Notice of Intent to Cure is given by such defaulting party, then the procedure
described above shall be followed.
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9.3 BY THE SHAREHOLDER. This Agreement may be terminated by the
Shareholder, if a material default shall be made by Liquids or any Newco Company
in the observance of or in the due and timely performance by any of them of any
of their respective material agreements and covenants herein contained, or if
there shall have been a material breach by any of them of any of their
respective warranties and representations, or if the conditions of this
Agreement to be complied with or performed by any of them at or before Closing
shall not have been complied with or performed on or before August 1, 1997,
unless such noncompliance or nonperformance shall have been waived by the
Shareholder in writing. Notwithstanding the foregoing, if Liquids or any Newco
Company materially defaults in the observance of or in the due and timely
performance of any of the material agreements and covenants herein contained or
materially breaches any of the material warranties and representations herein
contained, and if that material default is curable by such defaulting party,
then such defaulting party may give notice (the "Notice of Intent to Cure") to
the Shareholder, making express reference to this Section 9.3 and setting forth
in detail the facts and circumstances of the material default or breach and
further setting forth such defaulting party's intent to cure the same and
describing how the material default or breach will be cured. Within seven (7)
business days of this Notice of Intent to Cure by such defaulting party, the
Shareholder may give a response notice to such defaulting party (the "Response
Notice") as to whether the Shareholder consents to the proposed cure of the
material default or breach by such defaulting party; provided however, that the
Shareholder shall not unreasonably withhold consent to cure. The failure by the
Shareholder to give a timely Response Notice shall be deemed to be a consent by
the Shareholder to the proposed cure. If consent to cure is granted by the
Shareholder, then such defaulting party shall have ten (10) days following the
date of the Shareholder's Response Notice (or if no Response Notice is given,
then seventeen (17) days from the date of the Notice of Intent to Cure) to cause
the material default or breach to be cured. For purposes of this Section 9.3, a
material default in the observance of or in the due and timely performance of
any of the material agreements and covenants herein contained is curable only if
such defaulting party can cause such material agreements and covenants to be
observed and performed, and so long as such cure will cause the material default
to become immaterial. For purposes of Section 9.3, a material default of any of
the material warranties and representations herein contained is curable only if
such defaulting party causes such material warranties and representations to
become true and correct, and so long as the failure of any such material
warranties and representations to be true and correct prior to their cure is
rendered immaterial. In the event that Liquids or any Newco Company materially
defaults in the observance of or in the due and timely performance of any of the
material agreements and covenants herein contained or materially breaches any of
the material warranties and representations herein contained, and if
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that material default or breach is curable by such defaulting party, and if such
defaulting party does not give a Notice of Intent to Cure, as described above,
then the Shareholder shall have the right to terminate this Agreement, but only
after first giving notice of its intent to terminate to Liquids, in which event
such defaulting party shall have the right, for a period of five (5) business
days from that notice, to give to the Shareholder a Notice of Intent to Cure.
Failure by such defaulting party to give the Notice of Intent to Cure shall be
deemed a waiver of that right. If a Notice of Intent to Cure is given by such
defaulting party, then the procedure described above shall be followed.
9.4 TERMINATION BY THE SHAREHOLDER OR LIQUIDS. If the Shareholder
terminates this Agreement pursuant to this Section 9, this Agreement shall be
deemed terminated on behalf of all of the Mesa Companies and the Shareholder.
If Liquids terminates this Agreement pursuant to this Section 9, this Agreement
shall be deemed terminated on behalf of all of the Newco Companies and Liquids.
SECTION 10
INDEMNIFICATION
The Mesa Companies and the Shareholder make the following indemnities, and
where specifically stated, Liquids makes the following indemnities, which shall
not be in limitation of any remedies and rights otherwise available to the
indemnified persons under this Agreement or by law.
10.1 GENERAL INDEMNITY.
(a) (i) Subject to the limitations set forth in Section 10.2,
the Mesa Companies (collectively the "Indemnitor") agree that they will
indemnify and hold harmless the Newco Companies and Liquids and their
respective officers, directors, employees, and agents (the "Indemnitees")
from and against all losses, damages, costs, and expenses relating to any
claims, actions, suits, proceedings, demands, assessments, and adjustments,
including reasonable attorneys' fees and expenses of investigation
(collectively, the "Indemnified Losses"), reasonably incurred by any of the
aforesaid Indemnitees as a result of or incident to any material breach by
any Mesa Company of any representation, warranty, covenant, or agreement
set forth herein or on any schedule, exhibit, or certificate made or
delivered in connection herewith by or on behalf of any Mesa Company (an
"Indemnification Event"). With respect to any Indemnification Event
relating to any environmental matter, the Indemnified Loss shall also
include
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any costs and expenses of analysis, testing, remediation, transportation,
incineration, treatment, or other necessary and appropriate disposition or
mitigation of a hazardous environmental condition.
(ii) Subject to the limitations set forth in Section 10.2, the
Shareholder (the "Indemnitor") agrees that he will indemnify and hold
harmless the Newco Companies and Liquids and their respective officers,
directors, employees, and agents (the "Indemnitees") from and against all
losses, damages, costs, and expenses relating to any claims, actions,
suits, proceedings, demands, assessments, and adjustments, including
reasonable attorneys' fees and expenses of investigation (collectively, the
"Indemnified Losses"), reasonably incurred by any of the aforesaid
Indemnitees as a result of or incident to any material breach by the
Shareholder of any representation, warranty, covenant, or agreement set
forth herein or on any schedule, exhibit, or certificate made or delivered
in connection herewith by or on behalf of the Shareholder (an
"Indemnification Event").
(b) Subject to the limitations set forth in Section 10.2, the
Newco Companies and Liquids (the "Indemnitors") agree that they will
jointly and severally indemnify and hold harmless the Mesa Companies and
the Shareholder and their respective officers, directors, employees, and
agents (the "Indemnitees") from and against all Indemnified Losses,
reasonably incurred by any of the aforesaid Indemnitees as a result of or
incident to any material breach by any Newco Company or Liquids of any
representation, warranty, covenant, or agreement set forth herein or on any
schedule, exhibit, or certificate made or delivered in connection herewith
by or on behalf of Liquids or any Newco Company (an "Indemnification
Event"). With respect to any Indemnification Event relating to an
environmental matter, the Indemnified Loss shall also include any costs and
expenses of analysis, testing, remediation, transportation, incineration,
treatment, or other necessary and appropriate disposition or mitigation of
a hazardous environmental condition.
10.2 LIMITATIONS ON INDEMNITY. An Indemnitee, as described in Section
10.1(a) or (b) above, may seek indemnification from an Indemnitor, described in
that same section above, for any Indemnified Loss resulting from an
Indemnification Event which occurs during the Indemnification Period and in
respect of which a claim is made before the end of the Indemnification Period,
all as provided for as follows:
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(a) INDEMNIFICATION PERIOD. The "Indemnification Period" shall
include all periods of time prior to the Effective Date and shall expire
the earlier of one (1) year from the Closing Date or one (1) year from the
termination of this Agreement; except that, the Indemnification Period
relating to the representations and warranties contained in Section 3.22
shall extend for the applicable statute of limitations period.
(b) INDEMNIFICATION PROCEDURE. If an Indemnitee reasonably
believes that an Indemnification Event has occurred or is existing during
the Indemnification Period with respect to which the Indemnitee would have
a right of indemnification against an Indemnitor, then the Indemnitee may
give notice (the "Indemnification Notice") to each Indemnitor with respect
to whom a claim for Indemnification is being made. The Indemnification
Notice shall describe in reasonable detail the alleged Indemnification
Event, the basis for which the Indemnitee believes that there is an
Indemnification Event, the amount of Indemnified Losses theretofore paid by
the Indemnitee, and an estimate of the total amount of Indemnified Losses
which the Indemnitee believes may be incurred by the Indemnitee with
respect to the Indemnification Event. Any purported Indemnitee who does
not give an Indemnification Notice with respect to an Indemnification Event
during the Indemnification Period shall be deemed to have waived the right
to receive indemnification for that Indemnification Event.
(c) LIMITATIONS ON INDEMNIFIED LOSSES. If an Indemnification
Notice is timely given, then the Indemnified Losses which the Indemnitee
may be entitled to recover hereunder shall include any such Indemnified
Losses incurred by the Indemnitee, whether during or after the
Indemnification Period. However, no indemnification shall be allowed
against the Shareholder, as Indemnitor under Section 10.1(a)(ii) except to
the extent that the total amount of Indemnified Losses payable with respect
to all Indemnification Events under Section 10.1(a)(ii) exceed $100,000 in
the aggregate; provided further, that the amount of Indemnified Losses
which may be recovered against the Shareholder shall not exceed the sum of
the value of the Liquids Stock received by the Shareholder as a result of
the Mergers, with such value to be determined at such time as the
Indemnitee is first entitled to recover any Indemnified Losses. However,
in the event that the Indemnitor has transferred any of such Liquids Stock
in any arm's-length sale, then the value of that transferred Liquids Stock
shall be deemed to be the actual sales price thereof reduced by the amount
of income taxes incurred by the Indemnitor attributable to the sale. For
these purposes, the amount of income taxes which the Indemnitor shall be
deemed to have incurred as a result of any such sale shall be the
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difference between the income taxes which would have been incurred by the
Indemnitor had the sale not occurred less the actual income taxes incurred
by the Indemnitor. Further, no indemnification shall be allowed under
Section 10.1(b) except to the extent that the total amount of Indemnified
Losses payable with respect to all Indemnification Events under Section
10.1(b) exceed $100,000 in the aggregate.
(d) THIRD-PARTY BENEFICIARIES. Any Indemnitee who is not a
signatory party to this Agreement shall nevertheless be deemed to be a
third-party beneficiary of this Agreement for purposes of this Section 10.
(e) DEFENSE OF THIRD-PARTY CLAIMS. In the event any claim,
action, suit, proceeding, demand, assessment, or adjustment is asserted
against any Indemnitee hereunder other than by an Indemnitor (such claim,
action, suit, proceeding, demand, assessment, or adjustment being referred
to herein as a "Third-Party Claim"), then the Indemnitee shall defend the
Third-Party Claim in a diligent, prudent, and good faith manner. The
Indemnitee shall also use reasonable efforts to mitigate, to the extent
reasonably possible under the circumstances, the amount of the Indemnified
Losses with respect to the Third-Party Claim. The Indemnitee shall not
make or agree to make any payments in settlement or compromise of any
Third-Party Claim or consent to the entry of any judgment with respect to
any Third-Party Claim without first giving notice thereof to the
Indemnitor. Nothing contained herein shall prevent the Indemnitor and
Indemnitee from further agreeing as between themselves as to the allocation
between them of the duties, responsibilities, and costs of defense and
settlement of any such Third-Party Claim. At all times, the Indemnitor and
Indemnitee will advise and consult with each other regarding the matters
contained in this Section 10 and shall be under a duty to act cooperatively
and in good faith.
SECTION 11
GENERAL
11.1 NOTICES. All notices required or permitted herein must be in
writing and shall be deemed to have been duly given the first business day
following the date of service if served personally or by telecopier, telex or
other similar communication to the party or parties to whom notice is to be
given, or on the third business day after mailing if mailed to the party or
parties to whom notice is to be given by registered or certified mail, return
receipt requested, postage prepaid, to the party to whom notice is to be given
at the address set forth below or to such other addresses as either party hereto
may designate to the other
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by notice from time to time for this purpose, on the first business day
following actual receipt if notice is given by an overnight express mail
service. All notices and other communications to the Shareholder shall be given
as follows:
The Mesa Companies
and the
Shareholder: Xxxxxx X. Xxxxxxx
----------- Mesa Processing, Inc.
0000 X. Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
(000) 000-0000
Telecopier No.: (000) 000-0000
WITH A COPY TO:
Xxxxxx X. Xxxxxxx, III
Reihsen & Associates
000 Xxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Liquids: U S Liquids Inc.
------- 000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
ATTN: W. Xxxxxxx Xxx, Chief Executive
Officer
(000) 000-0000
Telecopier No.: (000) 000-0000
WITH A COPY TO:
Xxxxxxx Xxxxxx & Xxxxx
1600 Bank of Oklahoma Plaza
000 Xxxxxx X. Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
(000) 000-0000
Attn: Xxx Xxxxx and Xxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
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11.2 INTEGRATED AGREEMENT. This Agreement contains and constitutes
the entire agreement between and among the parties herein and supersedes all
prior agreements and understandings between the parties hereto relating to the
subject matter hereof, including but not limited to that certain letter, dated
February 14, 1997. There are no agreements, understandings, restrictions,
warranties or representations among the parties relating to the subject matter
hereof other than those set forth or referred to herein. All schedules and
exhibits attached hereto are hereby incorporated herein and made a part of this
Agreement. This instrument is not intended to have any legal effect whatsoever,
or to be a legally binding agreement or any evidence thereof, until it has been
signed by all parties hereto. Any reference to this Agreement shall be deemed
to also refer to the exhibits, schedules, and attachments hereof.
11.3 CONSTRUCTION. This Agreement shall be construed, enforced and
governed in accordance with the laws of the State of Texas. In the event any
party hereto institutes any legal action in connection with any matter contained
herein, that legal action shall be instituted in the District Court of Xxxxxx
County, Texas, if in state court, and if federal court, then in the federal
district court of Houston, Texas. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter gender thereof or to the
plurals of each, as the identity of the person or persons or the context may
require. The descriptive headings contained in this Agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this Agreement or any provision contained herein.
Any reference to a person shall include any individual or legal entity.
11.4 INVALIDITY. If any provision contained in this Agreement shall
for any reason be held to be invalid, illegal, void or unenforceable in any
respect, such provisions shall be deemed modified so as to constitute a
provision conforming as nearly as possible to such invalid, illegal, void or
unenforceable provisions while still remaining valid and enforceable, and the
remaining terms or provisions contained herein shall not be affected thereby.
11.5 BINDING EFFECT. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, executors, personal representatives, successors and assigns.
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11.6 LITIGATION EXPENSE. In any action brought by a party hereto to
enforce the obligations of any other party hereto, the prevailing party shall be
entitled to collect from the other parties to such action such party's
reasonable attorneys' and accountants' fees, court costs and other expenses
incidental to such litigation.
11.7 COUNTERPART EXECUTION. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
11.8 AMENDMENT AND WAIVER. This Agreement may be amended at any
time, but only by an instrument in writing executed by both parties hereto.
A party hereto may waive any requirement to be performed by the other party,
provided that such waiver shall be in writing and executed by the party
waiving the requirement.
11.9 TIME OF ESSENCE. Time shall be of the essence with respect
to the performance by the parties hereto of their respective obligations
hereunder.
11.10 NEGATION OF THIRD-PARTY BENEFICIARY. Nothing contained in
this Agreement, expressed or implied, is intended to confer upon any person,
other than the parties hereto and their respective successors and assigns,
any rights or remedies under or by reason of this Agreement, nor is anything
in this Agreement intended to relieve or discharge the obligation or
liability of any third person to any party to this Agreement.
11.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, covenants, and warranties contained in this Agreement,
except as otherwise specifically stated, shall survive the Closing Date for a
period of one (1) year.
11.12 KNOWLEDGE DEFINED. For purposes of this Agreement, a
corporation will be deemed to know or have knowledge of any matter if any
executive officer or director of that corporation has actual knowledge of
that matter. Such an executive officer or director will be deemed to have
actual knowledge of any matter if, during the course of that executive
officer's or director's business and affairs, (i) he should have knowledge of
such matter and (ii) it would be highly unlikely that he did not have actual
knowledge of that matter. Each Mesa Company and the Shareholder shall be
deemed to have knowledge of any matter of which any of them has knowledge.
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11.13 WAIVER OF SUBROGATION, ETC. If the Shareholder materially
breaches any representation, warranty, covenant, or other obligation of the
Shareholder set forth in this Agreement, then he waives and agrees that he shall
not have any right of subrogation, indemnity, or similar remedy against Mesa;
provided, however, that this waiver shall not apply if this Agreement is
terminated and the Mesa Companies are not acquired by Liquids.
11.14 JOINT AND SEVERAL AGREEMENTS, REPRESENTATIONS, WARRANTIES,
AND COVENANTS. All agreements, representations, warranties, and covenants made
by any Mesa Company or by all Mesa Companies hereunder shall be deemed to be
made jointly and severally by all Mesa Companies, and all representations,
warranties, covenants made by Liquids or any Newco Company shall be deemed to be
made jointly and severally by Liquids and all Newco Companies.
11.15 SCHEDULES AND EXHIBITS. The parties acknowledge that
certain schedules and exhibits hereto pertaining to the Mesa Companies have been
prepared or assembled with the participation of representatives of Liquids.
Nevertheless, the Shareholder and the Mesa Companies represent and agree that
Liquids shall have no responsibility or liability for any participation in the
preparation of such schedules and exhibits and shall have no responsibility or
accountability therefor.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed below.
U S LIQUIDS INC.
By: /s/ W. Xxxxxxx Xxx
----------------------------
W. Xxxxxxx Xxx, Chief
Executive Officer
MESA ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
T&T GS ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
PHOENIX F&O ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
MESA PROCESSING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Xxxxxx X. Xxxxxxx, President
T&T GREASE SERVICE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
PHOENIX FATS & OILS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
SHAREHOLDER:
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
