EXHIBIT 2.0
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), is made and entered into
as of December 29, 1995, by and among NORTH AMERICAN TECHNOLOGIES GROUP, INC., a
Delaware corporation ("NATK"), GAIA TECHNOLOGIES, INC., a Texas corporation and
wholly-owned subsidiary of NATK ("Sub"), GAIA HOLDINGS, INC., a Delaware
corporation ("Gaia Holdings") formerly known as GAIA Technologies, Inc., THOR
VENTURES, L.C., a Texas limited liability company ("Thor Ventures"), and THOR
INDUSTRIES, INC., a Texas corporation ("Thor Industries;" collectively with Thor
Ventures and Gaia Holdings, the "Seller").
RECITALS
The parties hereto wish to provide for the purchase by Sub and sale by
Seller of substantially all of the assets and business of Seller (other than
certain "Excluded Assets," as defined herein), such that subsequent to such
purchase and sale, Sub will have acquired and can operate such assets and
businesses as a going concern, on the terms and conditions set forth in this
Agreement, and certain other matters as described herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS; CERTAIN RELATED MATTERS
1.1 PURCHASE AND SALE OF PURCHASED ASSETS. Subject to the terms and
conditions of this Agreement, and on the basis and in reliance on the
representations, warranties, covenants and agreements set forth in this
Agreement, at the Closing (as defined below), Seller shall sell, transfer,
convey, assign and deliver to Sub, and Sub shall purchase from Seller, as a
going concern, all of the "Purchased Assets," as such term is defined in Section
1.3 hereof.
1.2. PURCHASE PRICE. In exchange for Seller's sale, transfer, conveyance,
assignment and delivery of the Purchased Assets, and subject to the terms and
conditions of this Agreement, and on the basis and in reliance on the
representations, warranties, covenants and agreements set forth in this
Agreement, at the Closing, Sub shall:
(a) pay or cause to be paid to Seller an aggregate amount equal to
$2,450,000 (the "Cash/Note Portion of the Purchase Price"), of which:
(i) an amount equal to approximately $500,000 will be paid in the
form of forgiving the principal amount of the $500,000 Loan (the "$500,000
Loan"), an additional amount will be paid in the form of forgiving the
principal amount drawn down as of the Closing on the $600,000 Loan (the
"$600,000 Loan") (and no deductions from the Cash/Note Portion of the
Purchase Price shall be made to reflect a forgiveness of any interest that
may be due on either the $500,000 Loan, the $600,000 Loan or otherwise), as
such terms are defined in that certain
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Promissory Note, Security Agreement and First Option to Purchase Certain
Assets (the "$2,100,000 Note"), dated as of September 29, 1995, in the
principal amount of $2,100,000 issued by Seller in favor of NATK, and an
additional $24,500 shall be deducted therefrom to represent Seller's
portion of the Audit Fees (as defined in Section 4.1), and
(ii) the remaining balance of the Cash/Note Portion of the Purchase
Price will be paid at the Closing (the "Closing Payment"), at the option of
NATK, either (x) wholly in cash or (y) partially in cash and the remainder
thereof by the issuance at the Closing of a 90-day promissory note (the "90
Day Note") issued jointly and severally by Sub and NATK, in the principal
amount equal to the non-cash portion of the Closing Payment. Such 90 Day
Note shall be in the form of EXHIBIT E, attached hereto and made a part
hereof.
(b) cause to be issued and delivered to Seller an aggregate of 1,666,667
shares (the "NATK Shares") of common stock, par value $.001 per share, of NATK
("NATK Common Stock"), which shares shall be issued in the names and
denominations set out in Section 2.2(b)(ii) hereof, subject to the escrow
provisions set out in Escrow Agreement (as defined below);
(c) grant to those parties named therein those rights set forth in that
certain Gaia/Thor Royalty Agreement, substantially in the form of EXHIBIT A,
attached hereto and made a part hereof (the "Gaia/Thor Royalty Agreement");
(d) grant to those parties named therein those rights set forth in that
certain Gaia-TieTek License Agreement, substantially in the form of EXHIBIT B,
attached hereto and made a part hereof (the "Gaia-TieTek License Agreement");
and
(e) forgive, or otherwise assume and discharge Seller (to the satisfaction
of Seller) from any liability (including without limitation any liability for
payments of principal or interest) under or with respect to, the $500,000 Loan,
the $600,000 Loan and the $1,000,000 Loan (as defined below in the $2,100,000
Note, the "$1,000,000 Loan"), if any, such forgiveness, assumption and/or
discharge to be evidenced in a writing mutually acceptable to the parties;
provided, however, that if any interest or other payments shall have been made
with respect to any of the $500,000 Loan, the $600,000 Loan or the $1,000,000
Loan prior to the Closing, then at the Closing the aggregate amount of such
payments shall be repaid to Seller, or otherwise accounted for in a manner
mutually acceptable to the parties.
1.3 THE PURCHASED ASSETS AND THE EXCLUDED ASSETS.
(a) Purchased Assets. The assets to be purchased and sold at the Closing
(the "Purchased Assets") shall consist of all of the assets and business (other
than the Excluded Assets specified in Section 1.3(b) below) owned by Seller of
every kind, character and description, whether tangible, real, personal or
mixed, and wheresoever
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located, whether carried on the books of Seller or not carried in such books due
to having been expensed, fully depreciated or otherwise. The Purchased Assets
shall include without limitation the following (except in each such case, as are
expressly included in the Excluded Assets):
(i) all technologies, know-how, patents, service marks, copyrights,
trademarks, tradenames and similar intellectual property rights and assets
including without limitation those identified or referred to on SCHEDULE
1.3(A) attached hereto and made a part hereof;
(ii) all accounts receivable and or other rights to receive payment owing
to Seller ("Accounts Receivable") on the Closing Date (as defined below),
including without limitation those listed on SCHEDULE 1.3(A);
(iii) all of the inventories of products, work-in-progress, supplies and
materials owned by Seller on the Closing Date ("Inventory"), including
without limitation the Inventory listed on SCHEDULE 1.3(A), which Schedule
classifies the Inventory by category, quantity and item description;
(iv) all tangible personal property owned by Seller, including without
limitation furniture, fixtures, tools, machinery and equipment, computers,
computer software, data bases, computer disks, drives and other data
storage equipment and information, telephone systems, file cabinets and
desks (collectively, "Tangible Personal Property");
(v) all of Seller's rights in, to and under all contracts of Seller,
including without limitation those identified on SCHEDULE 1.3(A);
(vi) all of Seller's rights in, to and under all leases of tools,
furniture, machinery, equipment and other items of tangible personal
property entered into prior to the date hereof, all of which leases are
listed on SCHEDULE 1.3(A);
(vii) to the extent transferable or assignable by their express terms or
the terms of any law relating thereto, all franchises, licenses, permits,
certificates, approvals and other government authorizations necessary or
appropriate to own and operate the Purchased Assets, including without
limitation the exclusive right to use any and all trade marks, tradenames,
service marks, copyrights and similar rights relating to the business of
Seller, including among others the names, "GAIA Technologies," "Hard
Goods," and "Leaky Pipe;"
(viii) all of the Company's rights in, to and under all warranties and
service contract commitments;
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(ix) all rights in, to and under each contract, agreement, purchase order,
work order and commitment involving Seller, including without limitation
those listed on SCHEDULE 1.3(A) attached hereto and made a part hereof;
(x) all cash and cash equivalents on hand and in banks;
(xi) all prepaid expenses, prepaid insurance, deposits and other similar
items;
(xii) all books and records owned by Seller, including without limitation
all customer lists, credit records, computer records, contracts, leases,
sales representation agreements, sales agency agreements, marketing and
advertising materials, operating manuals, rental or lease payment record,
purchase orders, schedules of assets correspondence with vendors, books of
account, files, papers, books, and all other public and confidential
business records (collectively, the "Business Records"), whether in hard
copy form or electronically or magnetically stored;
(xiii) all rights, claims, lawsuits and choses in action against third
parties relating to the Purchased Assets arising out of transactions
occurring prior to the Closing Date (excluding the Retek Judgment, as
referred to on Schedule 1.3(b) hereto);
(xiv) all rights in, to and under all representations, warranties,
covenants and guaranties made or provided by third parties with respect to
the Purchased Assets; and
(xv) all goodwill of the business of Seller and the items identified in
this Section 1.3(a);
provided, however, that to the extent the assignment of any lease, claim, right,
benefit, warranty, service contract, commitment, or other contract, agreement,
purchase order, work order or other commitment referred to in this Section
1.3(a) shall require the consent of another party other than Seller or an
affiliate of a Seller, this Agreement shall not constitute an assignment thereof
if an attempted assignment would constitute a breach thereof, and in lieu
thereof Seller shall cooperate with Sub, and shall use its best efforts to cause
the affiliates of Seller to cooperate, as appropriate, in any reasonable
arrangement designed to provide to Sub the benefits thereunder.
Except as specifically listed on any Schedule referred to in this Section
1.3(a), all of such Purchased Assets shall be delivered free and clear of any
liens, claims, pledges, security interests or encumbrances of any kind, except
(i) liens for current taxes not yet due or payable and (ii) claims and liens
imposed by law and incurred in the ordinary course of business for obligations
not yet due to carriers and materialmen.
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(b) Excluded Assets. Seller shall not sell, convey, assign, transfer or
deliver to Sub at the Closing, and Sub shall not be obligated to purchase (or
make any payments or otherwise discharge any liability or obligation of Seller
with respect to), those assets owned by Seller or any of them that are
identified on SCHEDULE 1.3(B), attached hereto and made a part hereof (the
"Excluded Assets"). As used herein, the term, "Purchased Assets" shall not
include any of the Excluded Assets, and to the extent that any item or asset is
identified both in Section 1.3(a) as a Purchased Asset and in this Section
1.3(b) as an Excluded Asset, such item shall constitute an Excluded Asset for
all purposes.
1.4 ASSUMED LIABILITIES. At the Closing, Sub shall assume and agree to
pay or perform only those obligations and liabilities of Seller expressly set
forth in this Section 1.4 (the "Assumed Liabilities"). Except for the Assumed
Liabilities, Sub shall not assume or be deemed to have assumed and shall not be
responsible for any other obligation or liability of Seller, direct or indirect,
known or unknown, xxxxxx or inchoate, absolute or continent, including without
limitation any and all obligations regarding any foreign, Federal, state or
local income, sales, use, franchise or other tax liabilities, and Seller shall
indemnify and hold Sub harmless from all such liabilities and costs incurred by
Sub and arising out of or attributable to any such liabilities, all in
accordance with Article VI hereof. The Assumed Liabilities are:
(a) The accounts payable of Seller arising in the ordinary course of
business (and not incurred in violation of any law or in breach of any duty)
that are listed on SCHEDULE 1.4 hereto, but only in the amounts set forth on
such Schedule ("Accounts Payable") and excluding all reserves for contingent
liabilities;
(b) The capitalized lease obligations listed on SCHEDULE 1.4, if any,
arising on or after the Closing (and not incurred in violation of any law or in
breach of any duty) (collectively, the "Lease Obligations"), but excluding all
reserves for contingent liabilities;
(c) All other liabilities and claims against Seller incurred by Seller in
the ordinary course of business as of the Closing Date that both relate
exclusively to the Purchased Assets and are listed on SCHEDULE 1.4 but only in
the amounts set forth on such Schedule and excluding all reserves for contingent
liabilities;
(d) The obligations or liabilities of Seller that relate to the Purchased
Assets and exclusively to periods, events or circumstances after the Closing
Date (and not to events or circumstances occurring prior to the Closing Date,
except as described in SECTION 1.4) with respect to such Purchased Assets;
provided, however, that: (i) each of such obligations or liabilities shall be
on the same terms and conditions as are in effect prior to and on the Closing
Date; (ii) Sub shall assume no obligation or liability in, to or under any
contract, agreement, purchase order or lease that is not specifically referenced
on any Schedule referred to in Section 1.3 and (iii) Sub assumes no obligation
or liability in, to or under any illegal agreement, illegal lease or illegal
purchase order, or any obligation or liability, the performance of which would
be illegal.
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1.5 ALLOCATION OF PURCHASE PRICE. Seller and Sub agree that for Federal
income tax purposes the values of the Purchased Assets and the Assumed
Liabilities shall be the Purchase Price ("Tax Purchase Price"). The allocation
of such values shall be based on a joint determination, made in good faith, of
the fair market values of the Purchased Assets and Assumed Liabilities, and such
allocation is intended by the parties to comply with Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder. Such allocation will be determined by Sub, insofar as possible, in
accordance with generally accepted accounting principles.
Notwithstanding anything provision of this Agreement or any document to be
executed in connection herewith that may suggest otherwise, the parties
acknowledge and agree that substantially all of the value of the Purchased
Assets and Assumed Liabilities rests with those Purchased Assets and Assumed
Liabilities acquired or to be acquired by Sub from Gaia Holdings. In connection
therewith, any portion of the Cash/Note Portion of the Purchase Price, the NATK
Shares or the other consideration provided in connection with the purchase of
the Purchased Assets that is being paid or delivered to any party other than
Gaia Holdings is being so paid at the request and instruction of Gaia Holdings.
Seller and Sub shall prepare within two weeks of the Closing Date and
timely file the applicable Form 8594 with their respective Federal income tax
returns for the taxable year that includes the Closing Date. The parties agree
to use the allocation set forth on the agreed-to allocation in all returns and
reports filed with the taxing authorities. Each party shall take no action
inconsistent with the allocation reported on the Form 8594. If the Internal
Revenue Service, or any other taxing authority, challenges the allocation of the
Purchase Price, the party whose return is being examined shall promptly notify
the other party and shall promptly keep the other party fully informed regarding
all developments with respect to the allocation of the Tax Purchase Price.
ARTICLE II
THE CLOSING
2.1 CLOSING AND CLOSING DATE. The closing ("Closing") of the purchase and
sale of the Purchased Assets and the related transactions shall take place at
the offices of counsel for Seller, Xxxxx, Xxxxx & Xxxxx, 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxx 00000-0000, at 10:00 a.m., local time, on December 29,
1995, or at such other time and place and on such other date as the parties
hereto shall agree, but in no event shall such date be later than January 31,
1996, unless such date is extended by the mutual written agreement of the
parties hereto. The date of the Closing is referred to herein as the "Closing
Date."
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2.2 CLOSING TRANSACTIONS. At the Closing:
(a) General
(i) Bills of Sale. Each of the parties thereto shall execute and deliver
to the other party thereto a Xxxx of Sale and Assignment, substantially in
the forms of EXHIBITS C-1, C-2 and C-3, attached hereto and made a part
hereof (the "Bills of Sale"); and
(ii) Assignment of Patents. Seller shall execute and deliver that certain
Assignment of Patents, substantially in the form of EXHIBIT D, attached
hereto and made a part hereof (the "Assignment of Patents");
(b) Purchase Price
(i) The Closing Payment. Sub shall issue and deliver by certified check or
wire transfer an amount equal to cash portion of the Closing Payment, if
any, to the party or parties as Gaia Holdings shall instruct it. If the
Closing Payment is not paid in full in cash, as contemplated by the
provisions of Section 1.2(a) hereof, NATK and Sub shall issue the 90 Day
Note as contemplated by Section 1.2 (a) hereof. The remainder of the
Cash/Note Portion of the Purchase Price shall be applied as contemplated by
Section 1.2(a) hereof;
(ii) NATK Stock. NATK shall issue four certificates representing the NATK
Shares, in the names and number of shares as set forth below:
NUMBER
NAME OF SHARES
GAIA Holdings, Inc. 222,223 (Pledged Shares)
333,333
Thor Ventures, L.C. 444,444 (Pledged Shares)
666,667
The 222,223 NATK Shares and the 444,444 NATK Shares identified above as the
"Pledged Shares" are sometimes collectively referred to herein as the
Pledged Shares." At the Closing, NATK shall deliver to the Escrow Agent the
certificates representing the Pledged Shares pursuant to the Escrow
Agreement, and shall deliver to Gaia Holdings, the certificate representing
the 333,333 Shares and to Thor Ventures, the certificate representing the
666,667 Shares; and
(iii) Re-delivery of Promissory Notes. NATK shall re-deliver to Seller
the $2,100,000 Note marked "CANCELED;"
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(c) Crosstie Business Related Matters.
(i) NATK, TieTek (as defined below), each of Messrs. Xxxxxxx and Xxxxxxxx,
and J. Xxxxx Xxxxxxx shall execute and deliver that certain Crosstie
Purchase Option and Loan Agreement, dated as of December 29, 1995 (the
"Crosstie Purchase Option Agreement"), and the Crosstie Note (as defined in
the Crosstie Purchase Option Agreement);
(ii) Seller shall cause to be delivered to the Escrow Agent named in the
Escrow Agreement the certificates representing shares of capital stock of
TIETEK, Inc., a Texas corporation ("TieTek"), then held by NATK, as pledgee
of such shares, pursuant to the provisions of the Escrow Agreement; and
(iii) NATK, Sub, Seller, TieTek, the owners of all of the outstanding
shares of capital stock of TieTek, and the party named therein as the
Escrow Agent (the "Escrow Agent") shall execute and deliver that certain
Escrow Agreement, substantially in the form of EXHIBIT G, attached hereto
and made a part hereof (the "Escrow Agreement"), relating to the Pledged
Shares and the TieTek Shares as described or referred to in the Escrow
Agreement;
(d) Other License and Royalty Related Matters. Sub shall execute and
deliver the Gaia/Thor Royalty Agreement and the Gaia-TieTek License Agreement;
and
(e) Employment Agreements, Retek Equipment Purchase Option Matters and
Other Matters
(i) Each of Sub and Xxxxxxx Xxxxxxx ("Xxxxxxx") shall execute and deliver
that certain Employment Agreement substantially in the form of EXHIBIT H,
attached hereto and made a part hereof (the "Xxxxxxx Employment
Agreement"), and each of NATK and Xxxxxxx shall execute and deliver the
Stock Option Agreement attached as an exhibit thereto;
(ii) Each of Sub and Xx. Xxxxx X. Xxxxxxxx ("Xxxxxxxx") shall execute and
deliver that certain Employment Agreement substantially in the form of
EXHIBIT I, attached hereto and made a part hereof (the "Xxxxxxxx Employment
Agreement"), and each of NATK and Xxxxxxxx shall execute and deliver the
Stock Option Agreement attached as an exhibit thereto; and
(iii) Gaia Holdings and Sub shall execute and deliver that certain Option
Agreement, substantially in the form of EXHIBIT J, attached hereto and made
a part hereof (the "Retek Equipment Purchase Option").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF NATK AND THE SUB. NATK and Sub
represent and warrant, jointly and severally, to Seller those matters set forth
on EXHIBIT K, attached hereto and made a part hereof.
3.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Each of the Sellers
represent and warrant, jointly and severally, to NATK and the Sub those matters
set forth on EXHIBIT L, attached hereto and made a part hereof.
ARTICLE IV
COVENANTS
Each of the covenants of NATK and Sub or either of them contained in this
Article IV shall be deemed joint and several covenants and agreements of NATK
and Sub. Each of the covenants of Seller or any of them contained in this
Article IV shall be deemed joint and several covenants and agreements of all of
the Sellers.
4.1 AUDIT. The approximately $49,000 of fees and expenses ("Audit Fees")
incurred in connection with the preparation of certain audited financial
statements of Seller (or one or more of them) by NATK's independent auditors
shall be divided and paid 50% by NATK and 50% by Seller; provided, however, that
Seller's portion thereof shall be paid by the deduction of the Cash/Note Portion
of the Purchase Price (with such amount first being deducted from the principal
amount of the 90-day Note, if any), as provided in Section 1.2(a) hereof.
4.2 [Intentionally Omitted]
4.3 CORPORATE ACTION. At or before the Closing, Seller shall cause to
occur all corporate action necessary on behalf of any of them to effect the
purchase and sale of the Purchased Assets and the other transactions
contemplated by this Agreement to occur at or before the Closing. At or before
the Closing, NATK and Sub shall cause to occur all corporate action necessary on
behalf of any of them to effect the purchase and sale of the Purchased Assets
and the other transactions contemplated by this Agreement to occur at or before
the Closing.
4.4 CONFIDENTIALITY.
(a) Confidentiality of NATK-Related Information. With respect to
information concerning NATK, Sub or any transaction proposed by this Agreement
that is or has been made available to Seller, whether before or after the date
hereof, Seller agrees that it shall hold such information in strict confidence,
shall not use such information except for the sole purpose of evaluating the
transactions proposed hereby and shall not
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disseminate or disclose any of such information other than to its directors,
officers, employees, shareholders, affiliates, agents and representatives who
need to know such information for the sole purpose of evaluating the
transactions proposed hereby (each of whom shall be informed by Seller of the
confidential nature of such information and directed by Seller in writing to
treat such information confidentially) and shall not use (or permit any of its
directors, officers, employees, shareholders, affiliates, agents or
representatives to use) such information to the detriment (detriment to be
determined by NATK) of NATK, its directors, officers, employees or shareholders.
If the obligations of the parties under this Agreement are terminated pursuant
to the provisions of this Agreement, Seller shall immediately return all such
information, all copies thereof and all information prepared by Seller based
upon the same, upon NATK's request. The above limitations on use, dissemination
and disclosure shall not apply to information that (i) is learned by Seller from
a third party entitled to disclose it; (ii) becomes known publicly other than
through Seller or any party who received the same through Seller; (iii) is
required by law or court order to be disclosed by Seller; or (iv) is disclosed
with the express prior written consent thereto of NATK. Seller shall undertake
all reasonable steps to ensure that the secrecy and confidentiality of such
information will be maintained in accordance with the provisions of this Section
4.4(a).
(b) Confidentiality of Seller-Related Information. With respect to
information concerning Seller or any transaction proposed by this Agreement that
is made available to NATK, whether before or after the date hereof, NATK agrees
that it shall hold such information in strict confidence, shall not use such
information except for the sole purpose of evaluating the transactions proposed
hereby and shall not disseminate or disclose any of such information other than
to its directors, officers, employees, shareholders, affiliates, agents and
representatives who need to know such information for the sole purpose of
evaluating the transaction proposed hereby (each of whom shall be informed by
NATK of the confidential nature of such information and directed by NATK in
writing to treat such information confidentially) and shall not use (or permit
any of its directors, officers, employees, shareholders, affiliates, agents or
representatives to use) such information to the detriment (detriment to be
determined by Seller) of Seller, its directors, officers, employees or
shareholders. If the obligations of the parties under this Agreement are
terminated pursuant to provisions of this Agreement, NATK shall immediately
return all such information, all copies thereof and all information prepared by
NATK based upon the same, upon Seller's request. The above limitations on use,
dissemination and disclosure shall not apply to information that (i) is learned
by NATK from a third party entitled to disclose it; (ii) becomes known publicly
other than through NATK or any party who received the same through NATK; (iii)
is required by law or court order to be disclosed by NATK; or (iv) is disclosed
with the express prior written consent thereto of Seller. NATK shall undertake
all reasonable steps to ensure that the secrecy and confidentiality of such
information will be maintained in accordance with the provisions of this Section
4.4(b).
(c) Nondisclosure. Neither of the parties hereto shall disclose to the
public or to any third party the existence of this Agreement or the transactions
proposed hereby
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as described herein or any other material non-public information concerning or
relating to the other party hereto, other than with the express prior written
consent of the other party hereto, except as may be required by law or court
order or to enforce the rights of such disclosing party under this Agreement, in
which event the contents of any proposed disclosure shall be discussed with the
other party before release; provided, however, that notwithstanding anything to
the contrary contained in this letter, either party may disclose this letter to
any of its directors, officers, employees, shareholders, affiliates, agents and
representatives who need to know such information for the sole purpose of
evaluating the transactions proposed hereby, and to any party whose consent is
required in connection with any such proposed transaction. The parties
anticipate issuing a mutually acceptable, joint press release announcing the
Closing of the purchase and sale of the Purchased Assets and the related
transactions.
4.5 [Intentionally Omitted]
4.6 CONSENTS. NATK, Sub and each Seller shall cooperate and use their
best efforts to obtain, prior to the Closing, all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts with any Seller as are necessary for the consummation
of the transactions contemplated by this Agreement; provided, however, that the
parties shall not be required to seek the consent, approval or authorization of
the landlords under, or otherwise amend the written agreements relating to, the
lease agreements pursuant to which any Seller leases any real or personal
property.
4.7 FILINGS. NATK, Sub and each Seller shall, as promptly as practicable,
make any required filings and any other required submissions, under any law,
statute, order rule or regulation with respect to the transactions contemplated
by this Agreement and shall cooperate with each other with respect to the
foregoing.
4.8 ALL REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement and to the fiduciary duties and obligations of the board of directors
or similar group governing NATK, Sub and each Seller, each of the parties to
this Agreement shall use all reasonable efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations, or to remove any injunctions or
other impediments or delays, legal or otherwise, as soon as reasonably
practicable, to consummate the transactions contemplated by this Agreement.
4.9 PUBLIC ANNOUNCEMENTS. NATK and Seller shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement or the other transactions contemplated by this
Agreement and shall not issue any other press release or make any other public
statement relating to the same without prior consultation with the other
parties, except as may be required by law or, with respect to NATK, by
obligations pursuant to any listing agreement with an national securities
exchange. Notwithstanding the foregoing or anything in this Agreement to the
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contrary, NATK may inform its financial advisors and placements agents, any of
NATK's investors or potential investors, and any purchaser representative or
other advisor of any such investor or potential investor of the progress of the
transactions contemplated by this Agreement and the proposed terms and
conditions of this Agreement.
4.10 NOTIFICATION OF CERTAIN MATTERS. Seller shall give prompt notice to
NATK, and NATK shall give prompt notice to Seller, of (a) the occurrence or non-
occurrence of any event, the occurrence or non-occurrence of which would cause
any of its representations or warranties in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Closing and (b) any
material failure of Seller, on the one hand, or NATK or the Sub, on the other
hand, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement; provided,
however, the delivery of any notice pursuant to this Section shall not limit or
otherwise affect the remedies available to the party receiving such notice under
this Agreement.
4.11 EXPENSES. Except as otherwise expressly provided herein (including
without limitation the provisions of Section 4.1 hereof), all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses whether or not the
transactions contemplated hereby are consummated. Seller shall pay any and all
fees and expenses that may be due XxXxxxx & Company or any of its affiliates in
connection with any of the transactions contemplated by this Agreement.
4.12. REGISTRATION RIGHTS. (a) Conditional Right to Piggyback. Subject
to the provisions and conditions of this Section 4.12, if NATK (sometimes
referred to in this Section as the "Company") proposes to register shares of
NATK Common Stock under the Securities Act of 1933, as amended (the "Securities
Act"), and if the registration form to be used may be used for the registration
of the shares of NATK Common Stock to be received by Seller in connection with
the purchase and sale of the Assets as provided in Section 1.2(b) of this
Agreement (the "Newly Issued Shares") (such registration event being referred to
herein as a "Piggyback Registration"), NATK shall, as promptly as reasonably
practical, give written notice to each of the holders of such Newly Issued
Shares (the "Shareholders") and will include in such Piggyback Registration,
subject to the allocation provisions below, all Newly Issued Shares with respect
to which NATK has received written requests (from the Shareholders owning of
record such Newly Issued Shares) for inclusion within 20 days after NATK's
mailing of such notice. The rights granted to the Seller under this Section
4.12(a) shall be exerciseable by any of them only during the period beginning
six (6) months following the Closing Date and ending three (3) years and six (6)
months after the Closing Date (the "Registration Rights Period"). The term
"Newly Issued Shares" shall include any Pledged Shares that are released or to
be released from the pledge thereof pursuant to the Crosstie Note during the
Registration Rights Period.
12
(b) Demand Registration. During the Registration Rights Period and only
if NATK does not then have a registration statement filed with the Securities
and Exchange Commission ("SEC") or an effective registration statement,
Shareholders holding 75% or more of the Newly Issued Shares (which, for purposes
of such calculation, shall include the Pledged Shares) may request in writing
that the Company register such Newly Issued Shares under the Securities Act (a
"Registration Request"). The Company shall use all reasonable efforts to
expedite and effect the registration of such Newly Issued Shares that are the
subject of the Registration Request (the "Registrable Shares"). The Company may
include in any such registration (x) similar securities held by other parties
with registration rights and (y) similar securities that the Company desires to
register (provided, however, that the Newly Issued Shares shall, to the maximum
extent the Company is then permitted to do so, always have first priority with
respect to any registration pursuant to this Section 4.12(b)). The Company
shall have up to 180 days from the date of the Registration Request to file a
registration statement with the SEC. Notwithstanding anything herein to the
contrary any registration pursuant to this Section 4.12(b) (a "Demand
Registration") will not be deemed to have been effected unless it has become
effective and remained effective no less than 90 days (unless terminated with
the consent of the holders of such Registrable Shares); provided further, than
any such registration that does not become effective after the Company has filed
a registration statement in accordance with the provisions of this Section
4.12(b) solely by reason of the refusal to proceed of the holders of such
Registrable Shares that have made a Registration Request, including failure to
comply with the provisions of this Agreement (other than any refusal to proceed
based upon the advice of counsel to such holders that the registration
statement, or the prospectus contained therein, contains an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, or that such registration statement or such
prospectus, or the distribution contemplated thereby, otherwise violates or
would, if such distribution using such prospectus took place, violate any
applicable state or federal securities law) shall be deemed to have been
effected by the Company at the request of such holders. Notwithstanding
anything herein to the contrary, the NATK shall not be obligated to perform in
the aggregate more than one Demand Registration under the provisions of this
Section 4.12(b).
(c) Expenses. NATK will pay the Registration Expenses (as defined below),
but the Underwriting Commissions (as defined below) will be shared by NATK and
the holders of the Newly Issued Shares that are included in the Piggyback
Registration or a Demand Registration (each sometimes referred to as a
"Securities Registration" herein) in proportion to any securities included on
their behalf.
(d) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of NATK, and the managing
underwriters advise NATK that in their opinion the number of shares of NATK
Common Stock requested to be included in such registration exceeds the number
that can be sold in such offering, at a price reasonably related to fair value,
NATK will allocate the shares of
13
Common Stock to be included as follows: first, the securities NATK proposes to
sell on its own behalf; and second, other shares of NATK Common Stock (including
without limitation the Newly Issued Shares owned of record by the Shareholders)
requested by any shareholders or other parties (with rights against NATK
relating to such registration) to be included in such registration, pro rata on
the basis of the number of shares of NATK Common Stock owned of record by the
parties (other than NATK) desiring to have their shares so included (or, at the
sole option and in the discretion of NATK, any other reasonable method it deems
equitable, so long as such equitable method is determined by NATK in good faith,
primarily taking into account any contractual or other legal obligations of NATK
with respect thereto). The allocation priority specified above may not be
changed to lower the priority given to the Newly Issued Shares held by the
Shareholders to a priority below that of any other shareholder who acquired
equity securities of the Company as a result of the purchase by the Company (or
its affiliates) of the assets of another organization, or the acquisition by the
Company (or its affiliates) of another organization, whether by merger,
consolidation, stock purchase or otherwise.
(e) Priority on Secondary Registrations. If a Piggyback Registration is
initiated as an underwritten secondary registration on behalf of holders of NATK
Common Stock, and the managing underwriters advise NATK in writing that in their
opinion the number of shares of NATK Common Stock requested to be included in
such registration exceeds the number that can be sold in such offering, at a
price reasonably related to fair value, NATK will allocate the securities to be
included as follows: first, the shares of NATK Common Stock requested to be
included by the holders initiating such registration; and second, other shares
of NATK Common Stock (including without limitation the Newly Issued Shares owned
of record by the Shareholders) requested by any shareholders or other parties
(with rights against NATK relating to such registration) to be included in such
registration, pro rata on the basis of the number of shares of NATK Common Stock
owned of record by the parties (other than NATK) desiring to have their shares
so included (or, at the sole option and in the discretion of NATK, any other
reasonable method it deems equitable, so long as such equitable method is
determined by NATK in good faith, primarily taking into account any contractual
or other legal obligations of NATK with respect thereto). The allocation
priority specified above may not be changed to lower the priority given to the
Newly Issued Shares held by the Shareholders to a priority below that of any
other shareholder who acquired equity securities of the Company as a result of
the purchase by the Company (or its affiliates) of the assets of another
organization, or the acquisition by the Company (or its affiliates) of another
organization, whether by merger, consolidation, stock purchase or otherwise.
(f) Selection of Underwriters. In any Securities Registration, the
selection of investment banks(s), underwriters and manager(s), and the other
decisions regarding the underwriting arrangements and related matters for the
offering, shall be made exclusively by NATK.
(g) Registration Procedures. Whenever a holder of Newly Issued Shares
exercises its rights under this Section 4.12 (each an "Exercising Shareholder"),
NATK
14
will, as expeditiously as possible:
(i) furnish to each Exercising Shareholder such number of copies of
the applicable registration statement, each amendment and supplement thereto and
the prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as such Exercising Shareholder
may reasonably request in order to facilitate the disposition of the Newly
Issued Shares owned of record by such Exercising Shareholder to be included in
such registration statement;
(ii) use its best efforts to register or qualify such Newly Issued
Shares under such other securities or blue sky laws of such jurisdictions as the
managing underwriter(s) may request; and
(iii) cause such Newly Issued Shares to be listed or included on
securities exchanges on which shares of NATK Common Stock are then listed or
included.
(h) Indemnification.
(i) NATK will indemnify, to the extent permitted by law, each
Exercising Shareholder against all losses, claims, damages, liabilities and
expenses arising out of or resulting from any untrue or alleged untrue statement
of material fact contained in any registration statement, prospectus or
preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are caused by or contained in
any information furnished in writing to NATK by such Exercising Shareholder
expressly for use therein or by any such Exercising Shareholder's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after NATK has furnished such Exercising Shareholder with a
sufficient number of copies of the same.
(ii) In connection with any registration statement in which an
Exercising Shareholder is participating, each such Exercising Shareholder will
furnish to NATK in writing such information as is reasonably requested by NATK
for use in any such registration statement or prospectus and will indemnify, to
the extent permitted by law, NATK, its directors and officers and each person
who controls NATK (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of material fact or any omission or alleged omission of a
material fact required to be stated in the registration statement or prospectus
or any amendment thereof or supplement thereto or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in, or omitted from, information so furnished
in writing by such holder specifically for use in preparing the registration
statement. Notwithstanding the foregoing, the liability of an Exercising
Shareholder under this subsection (h)(ii) shall be limited to an amount equal to
the net proceeds actually received
15
by such Exercising Shareholder from the sale of such Exercising Shareholder's
Newly Issued Shares covered by the registration statement.
(iii) Any party entitled to indemnification under this subsection (h)
will: (x) give prompt notice to the indemnifying party of any claim with
respect to which such indemnified party seeks indemnification and (y) unless in
such indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made without its consent (but such consent will not be unreasonably withheld).
An indemnifying party who is not entitled, or elects not, to assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which case such
indemnifying party shall pay the fees and expenses of a sufficient number of
counsel so that such conflicts are resolved.
(i) Compliance with Underwriting Arrangements. No Shareholder may
participate in any Securities Registration unless such Shareholder: (i)
agrees to sell his Newly Issued Shares on the basis provided in any underwriting
arrangements approved by NATK and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
(j) Limitations on NATK's Obligations. In connection with its obligations
to register any of the Newly Issued Shares as provided in this Section 4.12,
NATK shall have no obligation (i) to assist or cooperate in the offering or
disposition of such Newly Issued Shares, (ii) except as expressly provided in
this Section 4.12, to indemnify any Shareholder, (iii) to obtain a commitment
from an underwriter relative to the sale of such Newly Issued Shares, or (iv) to
include such Newly Issued Shares within an underwritten offering of NATK
conducted on a firm basis.
(k) Definitions. As used in this Section 4.12, (x) "Registration
Expenses" means all expenses incident to NATK's performance of or compliance
with the provisions of this Section 5.12 and the registration of any other
securities in connection therewith, including without limitation all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, expenses and
fees for listing the securities to be registered on exchanges, and fees and
disbursements of counsel for NATK and all independent certified public
accountants, underwriters (other than Underwriting Commissions) and other
persons retained by NATK in connection therewith, and (y) "Underwriting
Commissions" means all underwriting discounts or commissions relating to the
sale of securities of NATK, but excludes any expenses reimbursed to
underwriters.
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(l) Limited Transferability or Assignability of Registration Rights.
Notwithstanding anything in this Section 4.12 or elsewhere in this Agreement to
the contrary, none of the rights granted to any holder of Newly Issued Shares
under this Section 4.12 shall be assignable or transferable by such Shareholder,
nor shall any such rights inure to the benefit of such Shareholder's assigns or
beneficiaries or any other party, including without limitation any subsequent
beneficial or record holder of any of the Newly Issued Shares or any interest
therein, without the prior written consent thereto of NATK (which consent shall
not be unreasonably withheld); provided, however, that such rights may be
transferred or assigned, without the prior written consent thereto of NATK, to
any current shareholder of Gaia Holdings or any member of Thor Ventures, or to
the spouse or children of any such shareholder or member who is a natural
person, to any trust the sole beneficiaries of which are any of such
shareholder's or member's spouse or children, and upon the death of any such
shareholder or member, to his or her estate; and provided further, that such
rights may not be further transferred or assigned to any other party or parties.
4.13 DISCLOSURE DOCUMENTS. Each Seller shall supply to NATK the necessary
information in writing, or cause the necessary information to be supplied in
writing, relating to Seller for inclusion in any documents to be filed with the
Securities and Exchange Commission or any regulatory agency in connection with
the transactions contemplated by this Agreement.
4.14. ONE DIRECTOR NOMINEE. NATK shall use its best efforts to cause Xx.
Xxxxxxx (or another nominee selected by Sellers then holding a majority of the
NATK Shares and reasonably acceptable to NATK) to be elected or appointed to the
Board of Directors of NATK not later than the first regularly scheduled NATK
Board of Directors meeting in 1996. In addition, from the date hereof and
continuing until the Crosstie Purchase Option (as defined in the Crosstie
Purchase Option Period) is either exercised or has expired (which occurs first),
NATK shall use its best efforts to cause the name of Xx. Xxxxxxx (or another
nominee selected by Sellers then holding a majority of the NATK Shares and
reasoanbly acceptable to NATK) to be included in the list of nominees for the
Board of Directors of NATK in the each proxy statement delivered to the
stockholders of NATK in connection with the each meeting of stockholders of NATK
at which directors are to be elected. If, on or before the date such proxy is
prepared in preliminary form, such nominee is then (for any reason) not an
employee of NATK, Sub or any of its affiliates, then, at the election of
Sellers, NATK shall use its best efforts to substitute for such nominee the name
of another substitute nominee (as selected by Sellers then holding a majority of
the NATK Shares) mutually acceptable to such Sellers and NATK in such list of
director nominees.
ARTICLE V
CONDITIONS TO CONSUMMATION OF THE CLOSING TRANSACTIONS
5.1 CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of each Seller to
consummate the purchase and sale of the Purchased Assets and the other
transactions
17
contemplated to be consummated by it at the Closing (collectively, the "Closing
Transactions") are subject to the satisfaction (or waiver by Seller) at or prior
to the Closing (or at such other time prior thereto as may be expressly provided
in this Agreement) of each of the following conditions:
(a) Seller shall have had the opportunity to conduct a due diligence
review of the books, records, operations, physical plant and facilities,
contracts and other documents of NATK and nothing shall have come to its
attention that would reasonably be expected to have a Material Adverse Effect on
NATK on and after the Closing.
(b) The representations and warranties of NATK and the Sub set out in this
Agreement shall be true and correct in all material respects, and no fact or
circumstance shall have come to the attention of Seller that is not disclosed in
this Agreement or any document or other writing delivered by NATK to Seller
prior to the date of this Agreement that could reasonably be expected to have a
Material Adverse Effect on NATK or the consideration to be received by the
Seller in connection with the transactions contemplated hereby to be consummated
at the Closing.
(c) Each of NATK and the Sub shall have complied in a timely manner and in
all material respects with their respective covenants and agreements set out in
this Agreement.
(d) All director, shareholder, lender, lessor and other parties' consents
and approvals, as well as all filings with, and all necessary consents or
approvals of, all federal, state and local governmental authorities and
agencies, as are required under this Agreement, applicable law or any applicable
contract or agreement (other than as contemplated by this Agreement) to complete
the purchase and sale of the Purchased Assets and the other transactions at the
Closing shall have been secured, including without limitation that this
Agreement shall have been approved by the affirmative vote of the owners of each
Seller in accordance with applicable law.
(e) No statute, rule, regulation, executive order, decree, injunction or
restraining order shall have been enacted, entered, promulgated or enforced by
any court of competent jurisdiction or governmental authority that prohibits or
restricts the consummation of the purchase and sale of the Assets at the Closing
or the related transactions.
(f) The Closing shall have occurred not later than January 31, 1996,
unless such date is extended by the mutual written agreement of the parties
hereto.
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5.2 CONDITIONS TO NATK'S AND THE SUB'S OBLIGATIONS.
The obligations of NATK and the Sub to consummate the Closing Transactions
at the Closing are subject to the satisfaction (or waiver by NATK) at or prior
to the Closing (or at such other time prior thereto as may be expressly provided
in this Agreement) of each of the following conditions:
(a) NATK shall have been provided with an executed copy of each of those
certain Termination of License Agreements, in the form of EXHIBIT M-1 and
EXHIBIT M-2, attached hereto and made a part hereof, and that certain
Termination of Sublicense, in the form of EXHIBIT N, attached hereto and made a
part hereof, and the parties thereto shall have certified to NATK at the Closing
that each such License Termination Agreement is in full force and effect, and
has not been amended, altered or terminated as of the Closing.
(b) NATK shall have had the opportunity to conduct a due diligence review
of the books, records, operations, physical plant and facilities, contracts and
other documents of each Seller and nothing shall have come to its attention that
would reasonably be expected to have a Material Adverse Effect on any Seller or
the Purchased Assets (taken as a whole) on and after the Closing.
(c) None of the owners of any Seller shall have filed with a Seller a
written objection to the sale of the Purchased Assets, as required by Article
5.12A(1)(a) of the TBCA or the applicable provisions of any other law in order
for such owner to perfect the right to dissent from such proposed action.
(d) NATK shall be satisfied that the acquisition of the Purchased Assets
pursuant to this Agreement is a tax-free transaction to NATK under the Code (as
defined in this Agreement).
(e) The representations and warranties of Seller set out in this Agreement
shall be true and correct in all material respects, and no fact or circumstance
that is not disclosed in this Agreement or any document or other writing
delivered by Seller to NATK prior to the date of this Agreement shall have come
to the attention of NATK that could reasonably be expected to have a Material
Adverse Effect on Seller or any of them or the Purchased Assets (take as a
whole).
(f) Seller shall have complied in a timely manner and in all material
respects with their covenants and agreements set out in this Agreement.
(g) All director, shareholder, lender, lessor and other parties' consents
and approvals, as well as all filings with, and all necessary consents or
approvals of, all federal, state and local governmental authorities and
agencies, as are required under this Agreement, applicable law or any applicable
contract or agreement (other than as contemplated by this Agreement) to complete
the transactions contemplated to occur at
19
the Closing shall have been secured, including without limitation that this
Agreement shall have been approved by the affirmative vote of the owners of each
Seller by the requisite vote, if any, in accordance with the TBCA or other
applicable laws.
(h) No statute, rule, regulation, executive order, decree, injunction or
restraining order shall have been enacted, entered, promulgated or enforced by
any court of competent jurisdiction or governmental authority that prohibits or
restricts the consummation of the purchase and sale of the Purchased Assets at
the Closing or the related transactions.
(i) The Closing shall have occurred not later than January 31, 1996,
unless such date is extended by the mutual written agreement of the parties
hereto.
(j) NATK shall be satisfied that the offer and issuance of the shares of
NATK Shares to Seller in connection with the transactions contemplated to occur
at the Closing are exempt from the registration provisions of the Securities Act
and similar provisions under applicable state securities laws.
(k) Each of the shareholders of Gaia Holdings and Thor Industries, and
each of the members of Thor Ventures, shall have executed and delivered to NATK
at or prior to the Closing a copy of an investment representation letter
("Investment Representation Letter") substantially in the form of EXHIBIT O,
attached hereto and made a part hereof.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION BY SELLER. Each Seller jointly and severally agrees
to indemnify, defend and hold harmless, NATK, Sub and their affiliates,
officers, directors, employees, contractors and agents (collectively, NATK, Sub
and such other parties are being referred to as the "NATK Parties") against and
from any and all taxes, penalties, interest, claims, suits, causes of action
(recognized now or at any later time), liabilities, responsibilities, damages,
losses, costs, assessments and expenses, including without limitation reasonable
attorney's fees and other expenses of defending any actions or claims, amounts
of judgments and amounts paid in settlement (collectively, all of the foregoing
being referred to herein as "Costs") incurred by, asserted against or imposed
upon any of the NATK Parties arising out of or attributable to:
(a) any breach of any representation, warranty, covenant or agreement made
by Seller herein or in any schedule, exhibit, certificate, document or agreement
furnished by Seller in connection herewith (including without limitation any of
the documents to be executed and delivered at the Closing), or made by a
shareholder or member of any Seller in such party's Investment Representation
Letter;
(b) Any nonfulfillment of any agreement hereunder or entered into in
connection herewith by Seller or by a shareholder or member of any Seller; or
20
(c) Any claim, known or unknown, arising out of, or by virtue of, or based
upon any Seller's operation of any Purchased Asset prior to the Closing.
6.1 INDEMNIFICATION BY NATK AND SUB. NATK and Sub jointly and severally
agree to indemnify, defend and hold harmless, each Seller and their affiliates,
officers, directors, employees, contractors and agents (collectively, each
Seller and such other parties are being referred to as the "Seller Parties")
against and from any and all Costs incurred by, asserted against or imposed upon
any of the Seller Parties arising out of or attributable to:
(a) any breach of any representation, warranty, covenant or agreement made
by NATK or Sub herein or in any schedule, exhibit, certificate, document or
agreement furnished by NATK or Sub in connection herewith or relating hereto
(including without limitation any of the documents to be executed and delivered
at the Closing);
(b) Any nonfulfillment of any agreement hereunder or entered into in
connection herewith by NATK or Sub; or
(c) Any claim, known or unknown, arising out of, or by virtue of, or based
upon any NATK's or Sub's operation of any Purchased Asset after the Closing.
6.3 CERTAIN INDEMNIFICATION-RELATED MATTERS. Any party entitled to
indemnification under the provisions of this Article VI will: (a) give prompt
notice to the indemnifying party of any claim with respect to which such
indemnified party seeks indemnification and (b) unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled, or elects not, to assume the defense of
a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which case such
indemnifying party shall pay the fees and expenses of a sufficient number of
counsel so that such conflicts are resolved.
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be terminated and the purchase and
sale of the Purchased Assets and the other Closing Transactions may be abandoned
at any time prior to the Closing:
21
(a) by mutual written consent of the board of directors of NATK, the Sub
and Seller; or
(b) by either of NATK or Seller:
(i) if the Closing shall not have occurred on or before January 31,
1996, unless such date is extended by the mutual written agreement of the
parties hereto, and in such event, only until the date the Closing has been
extended; provided, however, that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before that date; or
(ii) if any court of competent jurisdiction, or any governmental
body, regulatory or administrative agency or commission having appropriate
jurisdiction shall have issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall not have been overturned; or
(iii) if the board of directors or managers (as appropriate) of any
Seller, in the exercise of its fiduciary duties and after consultation with
counsel, shall have withdrawn its recommendation to such corporation's
shareholders or such organization's members that they approve of this Agreement,
or if the board of directors of NATK, in the exercise of its fiduciary duty and
after consultation with counsel, shall have failed to approve of the
consummation of the transactions contemplated hereby.
7.2 NOTICE AND EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1, written notice thereof
shall forthwith be given to the other party or parties specifying the provision
pursuant to which such termination is made, and this Agreement shall forthwith
become void and have no effect without any liability on the part of any party or
its directors, officers or shareholders, except for the provisions of this
Section 7.2 and Sections 4.4 and 4.9, which shall survive any termination of
this Agreement. Nothing contained in this Section 7.2 shall relieve any party
from any liability for any breach of this Agreement.
7.3 EXTENSION; WAIVER. Any time prior to the Closing, the parties may (a)
extend the time for the performance of any of the obligations or other acts of
any other party under or relating to this Agreement; (b) waive any inaccuracies
in the representations or warranties by any other party or (c) waive compliance
with any of the agreements of any other party or with any conditions to its own
obligations. Any agreement on the part of any other party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
7.4 AMENDMENT AND MODIFICATION. This Agreement may not be amended except
by an instrument in writing signed by all of the parties hereto.
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ARTICLE VIII
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the parties hereto shall not be deemed waived
or otherwise affected by any investigation made by any other party hereto. Each
representation and warranty shall continue for a period of three (3) years after
the Closing Date. The provisions of this Section shall have no effect upon any
other obligation of the parties, whether to be performed before or after the
Closing.
8.2 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
or mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows (or at such other address or facsimile number
for a party as shall be specified by like notice):
(a) if to Seller, at: with a copy to:
Thor Ventures, L.C./
Gaia Holdings, Inc. Xxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxx., Xxxxx 000 Xxxxx, Xxxxx & Xxxxx
Xxxxxxxx, Xxxxx 00000 909 Xxxxxx, Suite 3300
Attention: Xxxxx X. Xxxxxxxx/ Houston, Texas 77010
Xxxxxxx X. Xxxxxxx Fax: (000) 000-0000
Fax: (000) 000-0000
and with a copy to:
J. Xxxxx Xxxxxxx
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
(b) if to NATK or the Sub, at: with a copy to:
North American Technologies Xxxxxxxx X. Xxx
Group, Inc. 0000 Xxxxx, Xxxxx 000
0000 Xxxxxxxx Xxxx., Xxxxx 000 Xxxxxxx, Xxxxx 00000
Xxxxxxxx, Xxxxx 00000 Fax: (000) 000-0000
Attention: Xxx X. Xxxxxxxxxx
Fax: (000) 000-0000
NATK and the Sub may rely on any notice it receives in accordance with the above
provisions from Thor Ventures or Gaia Holdings as a notice from Seller. Each
Seller may rely on any notice it receives in accordance with the above
provisions from NATK as a notice from NATK and the Sub.
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8.3 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, including all Exhibits
and Schedules hereto, (a) constitutes the entire agreement among the parties
with respect to its subject matter and supersedes all prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to such subject matter and (b) shall not be assigned by operation of law
or otherwise, provided that, subject to any approvals required by applicable
law, NATK or the Sub may assign its respective rights and obligation to any
majority-owning or owned, direct or indirect, parent, subsidiary or subsidiaries
of NATK, but no such assignment shall relieve NATK or the Sub of its obligations
under this Agreement.
8.4 BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
Nothing in this Agreement is intended to confer on any person other than the
parties to this Agreement or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
8.5 HEADINGS. The descriptive headings of the articles, sections,
subsections, exhibits and schedules of this Agreement are inserted for
convenience only, do not constitute a part of this Agreement and shall not
affect in any way the meaning or interpretation of this Agreement.
8.6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
8.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Texas, without regard to the laws that
might otherwise govern under principles of conflicts of laws applicable thereto.
8.8 ARBITRATION. In the event any party believes any other party hereto
has committed a breach of any provision of this Agreement or such parties cannot
agree on an interpretation of one or more of the provisions of this Agreement,
such parties agree to first meet in Houston, Texas, and discuss the same, and
attempt in good faith to resolve such matter. Any such matter, controversy or
claim arising out of or relating to this Agreement, or the breach of any
provision hereof, that cannot otherwise be resolved between the relevant parties
in such a meeting and discussion shall be settled by arbitration in Houston,
Texas, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction. Any award
rendered may include an award of reasonable attorneys' fees, costs and expenses.
8.9 COURTS IN XXXXXX COUNTY, TEXAS TO HAVE EXCLUSIVE JURISDICTION. THE
PARTIES AGREE THAT THE FEDERAL AND STATE COURTS LOCATED IN XXXXXX COUNTY, TEXAS
SHALL HAVE EXCLUSIVE JURISDICTION OVER AN ACTION BROUGHT TO ENFORCE THE RIGHTS
AND OBLIGATIONS CREATED IN OR ARISING FROM THIS AGREEMENT TO ARBITRATE, AND EACH
OF THE
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PARTIES HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF SAID COURTS.
NOTWITHSTANDING THE ABOVE, APPLICATION MAY BE MADE BY A PARTY TO ANY COURT OF
COMPETENT JURISDICTION WHEREVER SITUATED FOR ENFORCEMENT OF ANY JUDGMENT AND THE
ENTRY OF WHATEVER ORDERS ARE NECESSARY FOR SUCH ENFORCEMENT.
8.10 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
8.11. FURTHER ASSURANCES. From time to time hereafter and without further
consideration, each of the parties hereto shall execute and deliver such
additional or further instruments of conveyance, assignment, assumption and
transfer, and take such actions, as any other party hereto may reasonably
request in order to more effectively convey and transfer to such other party the
assets, rights or other property to be sold or conveyed to such other party
hereunder or as shall be reasonably necessary or appropriate in connection with
the carrying out of such other party's obligations hereunder or the purposes of
this Agreement.
8.12 CERTAIN DEFINITIONS. As used herein:
(a) "affiliate" shall have the meanings ascribed to such term in Rule 12b-
2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended to date (the "Exchange Act");
(b) "business day" shall mean any day other than a Saturday, Sunday or a
day on which federally chartered financial institutions are not open for
business in the City of Houston, Texas;
(c) "Encumbrance" shall mean any lien, claim, charge, pledge, security
interest hypothecation or other claim or encumbrance;
(d) "Material Adverse Effect" shall mean any adverse effect on the
business, condition (financial or otherwise) or results of operation of the
relevant party and its subsidiaries, if any, which is material to such party and
its subsidiaries, if any, taken as a whole;
(e) "Person" means any individual, corporation, partnership, association,
trust or other entity or organization, including a governmental or political
subdivision or any agency or institution thereof; and
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(f) "subsidiary" shall mean, when used with reference to an entity, any
corporation, a majority of the outstanding voting securities of which is owned
directly or indirectly, or a majority of the board of directors of which may be
elected, by such entity.
IN WITNESS WHEREOF, each of the parties have caused this Agreement to be
duly executed by or on behalf of such party, all as of the date first written
above.
NORTH AMERICAN TECHNOLOGIES
GROUP, INC.
By: /s/ Xxx Xxxxxxxxxx
Name: Xxx Xxxxxxxxxx
Title: President
GAIA TECHNOLOGIES, INC.
By: /s/ Xxx Xxxxxxxxxx
Name: Xxx Xxxxxxxxxx
Title: President
GAIA HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: President
THOR VENTURES, L.C.
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: President
THOR INDUSTRIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: President
26
Exhibit A Gaia/Thor Royalty Agreement
Exhibit B Gaia-TieTek License Agreement
Exhibit C-1 Xxxx of Sale (GAIA Holdings)
Exhibit C-2 Xxxx of Sale (Thor Industries, Inc.)
Exhibit C-3 Xxxx of Sale (Thor Ventures, L.C.)
Exhibit D Assignment of Patents
Exhibit E Form of 90 Day Note
Exhibit F [Intentionally Omitted]
Exhibit G Escrow Agreement
Exhibit H Xxxxxxx Employment Agreement
Exhibit I Xxxxxxxx Employment Agreement
Exhibit J Option Agreement (Retek Equipment Purchase Option)
Exhibit K NATK/Sub Representations and Warranties
Exhibit L Representations and Warranties of Seller
Exhibit M-1 Termination of License (Saturn-GAIA)
Exhibit M-2 Termination of License (Thor-GAIA)
Exhibit N Termination of Sublicense
Exhibit O Investment Representation Letter
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