Exhibit 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (Agreement) is made and entered into as
of August 1, 2001, by and among REN CORPORATION, an Oklahoma corporation (Ren),
and RENTECH, INC., a Colorado corporation (Rentech). The following circumstances
precede the execution of this Agreement:
A. REN is a privately owned corporation that is engaged in the
manufacture of complex, computer controlled test systems sold to industrial
customers to test the specifications and quality of hydraulics and many
additional variables of automated equipment produced by them.
B. Rentech is a publicly owned energy corporation that owns
technology useful for converting gases derived from carbon-bearing materials
into synthetic liquid hydrocarbons such as clean burning diesel fuel. Rentech
also owns a subsidiary that produces environmentally clean and biodegradable
stains and sealers, and it owns another subsidiary that provides well logging
services to the oil and gas industry.
C. REN and Rentech have agreed that Rentech will purchase 56% of
the issued and outstanding shares of common stock of Ren.
D. REN is authorized to issue 50,000 shares of its common stock,
of which 5,600 are now issued and outstanding. The issued and outstanding shares
are owned in the following amounts by the following persons (Shareholders):
E. As of the date of this Agreement, Rentech has loaned to
REN$623,899.39 as cash advances against the Purchase Price subsequently
described in this Agreement. Total accrued interest on the cash advances is
$116,704.91.
F. As of the date of this Agreement, Rentech has issued 400,000
shares of its common stock to REN equal to $644,000.00 as advances of the
Purchase Price. The total of advances against the Purchase Price, including cash
and common stock, is $1,384,604.30.
G. On or about June 13, 2000, REN purchased the real property it
had leased at 0000 Xxxxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx for its office, with
a portion of the loan proceeds.
NOW THEREFORE, in consideration of the background circumstances and the
mutual covenants and agreements herein set forth, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
SALE AND PURCHASE
1.1 Purchase. Subject to the terms and conditions set forth in
this Agreement, at the Closing, (as defined in Section 3.1), REN will sell and
transfer 7,127 shares of its common stock (the REN Shares) to Rentech, and
Rentech will purchase the Ren Shares from Ren.
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1.2 Purchase Price. The entire purchase price (Purchase Price) to
be paid by Rentech for the REN Shares is $1,384,604.30, of which $623,899.39
will be credited against the indebtedness owed by REN to Rentech for the cash
advances, $116,704.91 will be credited against the indebtedness owed by REN to
Rentech for interest on the cash advances, and $644,000 will be credited to the
purchase price for the shares of common stock of Rentech previously issued to
REN(the Rentech Shares).
(a) Description of Ren's Indebtedness to Rentech. Ren's
indebtedness to Rentech is subject to a Loan Agreement between them dated May
11, 1999, as amended. The indebtedness is evidenced by a promissory note dated
May 12, 1999 in the original principal amount of $200,000, made by REN payable
to Rentech, which has been amended as of July 21, 1999, February 29, 2000 and
May 12, 2000 (Promissory Note I). The principal balance of Promissory Note I is
$573,899.39 as of the date of this Agreement. A second promissory note was
executed by REN in favor of Rentech dated July 13, 2000 in the principal amount
of $200,000 (Promissory Note II). A third promissory note was executed by REN in
favor of Rentech dated October 17, 2000 in the principal amount of $200,000
(Promissory Note III). A fourth promissory note was executed by REN in favor of
Rentech dated February 16, 2001 in the principal amount of $122,000 (Promissory
Note IV). In addition, Rentech advanced Stock to REN in the amount of $122,000
on or about February 16, 2001(Stock Advance I), and advanced cash in the amount
of $50,000 on or about July 20, 2001 (Cash Advance I).
(b) Application of Purchase Price to Indebtedness. The
Purchase Price shall be credited to pay in full the principal and interest due
as of the Closing on Promissory Note I, Promissory Note II, Promissory Note III,
Promissory Note IV, Stock Advance I, and Cash Advance I, all of which shall be
cancelled at Closing.
ARTICLE II
THE CLOSING
2.1 Place and Time. The closing of the transaction to be completed
under this Agreement shall take place as soon as reasonably practical after the
execution of this Agreement by both parties by completion of the actions and
delivery of the documents described in Sections 2.2, 2.3 and 2.4 at the offices
of Rentech's attorneys, Brega & Xxxxxxx P.C., located at 0000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, XX 00000 (the Closing). Regardless of the actual time of the
Closing, the Closing shall be effective as of 12:01 a.m. local time on August 1,
2001 (the Effective Time).
2.2 Payment and Delivery by Rentech. At or before the Closing, and
subject to the terms and conditions set forth herein, Rentech shall:
(a) execute and deliver a cancellation of Promissory
Notes I, II, III and IV; and
(b) execute and deliver the certificate required by
Section 8.1 hereof.
2.3 Delivery by Ren. At or before the Closing, and subject to the
terms and conditions set forth herein, REN shall:
(a) present at the Closing full releases and other
evidence of full payment of each indebtedness
described in Section 2.4;
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(b) execute and deliver a certificate representing the
REN Shares, duly issued and executed by the
authorized officers of the Ren;
(c) deliver a recorded copy of the general warranty deed
to REN conveying the Real Property located at 0000
Xxxxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx to Ren;
(d) deliver a copy of the title insurance policy insuring
Ren's title to the real property located at 0000
Xxxxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx, insuring
title in REN without exceptions other than those
previously approved by Rentech at the time of the
closing of the real property;
(e) deliver, if not previously delivered, all documents
and certificates required from REN by the provisions
of Article VII of this Agreement;
(f) deliver an executed copy of the Employment Agreement
of Xxxx Xxxxxxx attached hereto as Exhibit A;
(g) execute and deliver the Agreement Between
Shareholders attached hereto as Exhibit B, which is
also executed by each of the Shareholders;
(h) execute and deliver the Confidentiality Agreements,
attached hereto as Exhibit C, executed by each of the
employees of REN listed in Schedule 3.2;
(i) execute and deliver a certified resolution of the
shareholders and board of directors of Ren, duly
signed by its president and secretary, authorizing
the execution of this Agreement, the execution and
delivery of the REN Shares, and the actions to be
taken by REN according to the terms of this
Agreement, as set forth in Section 7.6.
REN will from time to time after the Closing Date, at Rentech's request, execute
such further instruments as Rentech reasonably deems necessary to carry out the
sale of the REN Shares pursuant to this Agreement.
2.4 Indebtedness of Ren. Because the debts of REN described below
have not been paid in full as originally contemplated by the parties, the
Shareholders shall agree in the Shareholder Agreement to assign to Rentech their
rights to distributions of profits from REN until an amount of profits are
distributed to Rentech equal to $252,699.76, plus 8% interest on the outstanding
balance accruing on August 1, 2001.
Remaining
Approximate Amount
Amount as of as of
Item April 16, 1999 August 1, 2001
---- -------------- --------------
Accrued commission payable to
Ren's sales representative $235,000 $ 176,036.05
KAMO Economic Development Corporation 160,000 -0-
CDBG/Xxxxx Co. Trust Promissory Note 4,200 -0-
COEDD Promissory Note (generator) 33,000 19,403.23
Xxxxxx Supply Company Promissory Note 41,000 -0-
Accounts Payable 300,000 64,176.20
Loans from officers of REN to REN 30,000 30,600.00
Panamet (trade payable) -0- 69,375.00
Less:
Cash of Ren (-0-) (21,099.36)
Accounts Receivable of Ren (-0-) (78,929.96)
-------------- --------------
Total: $1,003,200 $ 252,699.76
============== ==============
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ARTICLE III.
REPRESENTATIONS OF REN
REN represents, promises and warrants to the Rentech as follows:
3.1 Organization. REN is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Oklahoma and has
all power and authority to own its property and carry on its business as now
conducted and has all necessary licenses, permits and government approvals.
3.2 Authorization. The execution, delivery and performance of this
Agreement and any other documents or instruments contemplated hereby have been
duly authorized by all necessary action of Ren, and this Agreement has been
executed and delivered by REN and constitutes a legal, valid and binding
obligation of REN enforceable in accordance with its terms.
3.3 Financial Reports. True and correct copies of the financial
statement (including a balance sheet and statement of income) of REN for each of
the last five (5) years, and for a current month (collectively, the Reports)
will be provided to Rentech by separate delivery. At Closing REN shall deliver
to Rentech a true and correct copy of the financial statements including a
balance sheet and statement of income of REN as of the last day of the most
current month for which available, prepared from the books of REN without audit
since January 2001 (the Interim Reports). (Collectively, the Reports and the
Interim Reports shall be referred to as the Financial Reports). All such
Financial Reports are in accordance with the books and records of Ren, have been
prepared consistently throughout the periods indicated, reflect all material
assets and, to Ren's knowledge, material liabilities of Ren, and present fairly
and completely, in all material respects, the financial condition of REN and its
Business at such dates and results of its operations for the periods then ended,
subject only, in the case of the Interim Reports, to normal year end
adjustments.
3.4 Absence of Adverse Changes. Except as reflected in Financial
Reports, and as disclosed on Schedule 3.4, since January 1, 2001, Ren, its
business and its assets have not suffered or undergone any change that is
reasonably likely to have an adverse effect on the business, condition
(financial or otherwise), or prospects (whether as a result of any change as to
inventory or other assets, any loss of a competitive position, any natural
disaster, accident, strike, or any other event or condition affecting or
relating to its business, REN or its assets, whether or not related to any of
the foregoing), experienced any labor difficulty or suffered any damage,
destruction or loss (whether or not insured). Except as reflected in Financial
Reports and as disclosed on Schedule 3.4, as of the date of this Agreement,
since April 16, 1999, REN and its business have not:
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(a) incurred any obligations or liabilities (whether absolute,
accrued, contingent, or otherwise and whether due or to become due),
except current liabilities in the ordinary course of business and
consistent with past practice;
(b) written down or written up the value of any inventory or
equipment;
(c) canceled or waived any claim of right of substantial value or
sold, assigned, transferred or encumbered any of its properties or
assets, real, personal, or mixed, tangible or intangible, except for
fair consideration and in the ordinary course of business and
consistent with past practice;
(d) granted any increase in compensation, rate of compensation or
commission payable or to become payable, or made any loan, advance or
other extension of credit to any of its employees or agents except
merit increases made in the usual and ordinary course of business.
(e) changed the methods of accounting or accounting principles or
practices of REN set forth in or reflected in the Financial Reports;
(f) lost any key employees;
(g) terminated or been advised of the termination of its
relationship with any material customer or supplier;
(h) changed in any material respect the business policies or
practices of REN or failed to operate the business of REN in good faith
and in the ordinary course; and
(i) agreed, whether in writing or not, to do any of the foregoing.
3.5 Title to Assets. REN has good and marketable title to all its
assets, including, without limitation, those reflected in the Financial Reports
or acquired since the date thereof (except for property disposed of since such
date in the ordinary course of business consistent with past practice), in each
case free and clear of liens, easements or title imperfections except that, as
of the date of this Agreement, its assets may be subject to liens for current
taxes not yet due and payable. As of the Closing Date, Ren's assets shall be
subject to no liens and REN shall have good and marketable title to all assets
free and clear of liens.
3.6 Compliance With Other Instruments. REN has complete and
unrestricted power to undertake and perform all of the obligations contained in
this Agreement. Neither the execution and delivery, nor the consummation of the
transactions provided for in this Agreement, will violate the Articles of
Incorporation of REN or any material agreement, mortgage, indenture, license,
franchise, permit, judgment, decree, order, law or regulation by which REN is
bound.
3.7 Litigation. Except as set forth in Schedule 3.7, there are no
actions, claims, suits, investigations, litigation or proceedings pending, or,
to the knowledge of Ren, threatened against or relating to REN or its business,
including any that would question the validity of this Agreement or any other
agreements contemplated hereunder or any action taken or to be taken pursuant to
or in connection with the provisions of this Agreement or any other agreement
contemplated hereunder, nor is there any reasonable basis for any such action,
claim, suit, proceeding or investigation. There are no judgments, orders,
decrees, citations, fines or penalties heretofore assessed (and not discharged
or otherwise satisfied) against REN under any United States federal, state,
local or foreign law, and there are no unsatisfied judgments against Ren.
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3.8 Environmental Matters. REN is and has at all times been in
compliance with all applicable United States, federal, state, local, and foreign
laws and regulations relating to environmental, land use, welfare, natural
resources, health and safety matters. There is no suit, claim, action or
proceeding pending or threatened against REN or any reasonable basis therefor,
in respect of (a) noncompliance by REN with any such laws or regulations, (b)
personal injury, wrongful death or other tortious conduct arising out of or
resulting from materials, commodities or products held, used, sold, transferred,
manufactured or disposed of by or on behalf of REN or one of its shareholders,
containing or incorporating any hazardous or toxic materials commodities or
substances, or (c) the presence or release or threatened release into the
environment of any pollutant, contaminant or toxic or hazardous material,
substance or waste, whether solid, liquid or gas (each a Hazardous Substance),
whether generated by REN or located at or about a site currently owned, leased
or otherwise used by REN or heretofore owned, leased or otherwise used by REN or
any predecessor entity and for which REN would have liability. There have been
no Hazardous Substances generated by REN that have been disposed of or come to
rest at any site that has been included in any published United States federal,
state or local "superfund" site list or any other list of hazardous or toxic
waste sites published by any governmental authority in the United States. Except
as set forth on Schedule 3.8, there are and have been no underground storage
tanks located on, no polychlorinated biphenyls (PCBs) or PCB-containing
equipment used or stored on, and no hazardous waste, as defined by the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss. 6901 et seq, stored on,
any site owned, leased or otherwise used by Ren. No such Hazardous Substance is
stored by or on behalf of REN at any site at which REN provides services. There
has been no release or threatened release by REN of Hazardous Substances on,
upon, into or from (x) any site currently owned, leased or otherwise used by
Ren, (y) any site heretofore owned, leased or otherwise used by REN or any
predecessor entity or (z) any other site at which REN provides services.
3.9 Tax Returns. REN has duly filed all tax reports and returns
required to be filed by it and has duly paid all taxes and other charges due as
shown thereon or claimed to be due from it by written notice from any federal,
state, or local taxing authorities, including, without limitation, those due in
respect of its properties, income, franchise, licenses, sales, and payrolls;
there are no tax liens upon any of its assets (other than liens for current
taxes not yet due); there are no agreements, waivers or other arrangements
providing for an extension of time with respect to the assessment of any tax or
deficiency against its assets or REN nor are there any actions, suits,
proceedings, investigations or claims now pending against REN or relating to its
business; and, there are no pending discussions or questions relating to, or
claims asserted for taxes or assessments against Ren.
3.10 Leases. REN is not bound to any leases pursuant to which REN
leases real or personal property except as identified on Schedule 3.10.
3.11 Intellectual Property. REN has no pending applications for
registration of any rights in Intellectual Property. No licenses, sublicenses or
covenants have been granted or entered into by REN in respect of any
Intellectual Property. "Intellectual Property" means, collectively: (a) all
registered, unregistered and pending (i) trade names, trade dress, trademarks,
service marks, assumed names, business names and logos, and all registrations
and applications therefor, (ii) all computer software, data files, manuals and
other specifications and documentation and all know-how related thereto, (iii)
technical information, data, process technology, technical papers, plans,
drawings and blue prints, (iv) all patents, patent applications, and inventions
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and discoveries that may be patentable, registered designs and invention
disclosures, (v) all know-how, trade secrets, proprietary inventions,
proprietary processes, proprietary formulas, proprietary know-how, proprietary
concepts, proprietary ideas, proprietary research and development, and
proprietary designs, and (vi) all other intellectual property, and (b) all
licenses, sublicenses, assignments in respect thereto and rights thereunder,
remedies against infringements thereof and rights to protection of interest
therein relating to the items set forth in clause (a) above.
3.12 Employee Matters. Schedule 3.12 lists all employees employed
by REN(collectively, the Employees), including for each such Employee: (i) his
or her position and title; (ii) his or her date of hire; (iii) his or her
salary; (iv) his or her unpaid wages, accrued vacation time and accrued personal
time; and (v) any bonuses paid to him or her with respect to the fiscal year
ended December 31, 2000 or earned by him or her with respect to the current
fiscal year. REN shall as soon as reasonably practicable, but in any event
within five days after the Closing, provide to Rentech the foregoing information
with respect to any other Employees hired prior to the Closing. There are no
continuing contracts of employment with any employees of Ren. REN has complied
with all applicable laws relative to employee benefits, including COBRA and the
Employee Retirement Income Security Act of 1974, as amended (ERISA), and there
are no unfunded liabilities relating to any pension or welfare benefit plan for
which REN could be liable. REN is not a party to any collective bargaining
agreement and there is no existing dispute or controversy between REN and any of
the Employees. None of the Employees are represented by a labor union and, to
Ren's knowledge, there is no labor union organizing activity by or among such
Employees. REN does not maintain or contribute to, nor has it ever maintained or
contributed to, any employee benefit plan (as defined in ERISA) that is an
employee pension benefit plan (as defined in ERISA). REN does not maintain or
contribute to, nor has it ever maintained or contributed to, an employee benefit
plan that is an employee welfare benefit plan (as defined in ERISA).
3.13 Contracts and Commitments. The only continuing contract,
agreement, plan, arrangement, or commitment for the benefit of or relating to
Ren's business that it holds and that will continue past the Closing are those
described on Schedule 3.13.
3.14 Compliance with Law. REN has not received any notice of any
violation of and, to the best of Ren's knowledge, has complied in all material
respects with all laws, regulations, and orders applicable to its business
including all rules and regulations of the Occupational Health and Safety
Administration, and all federal, state and local environmental laws, rules and
regulations.
3.15 Licenses and Permits. REN holds all licenses and permits
which, to the best of Ren's knowledge, are required for Ren's operation of its
business, all of which are in full force and effect. REN has all governmental
and regulatory licenses and permits necessary for the conduct of the business as
presently conducted for the ownership of its assets. All such licenses and
permits are set forth on Schedule 3.15, are in full force and effect, and except
as set forth on Schedule 3.15, no written notice of any violations has been
received by REN relating to such licenses or permits. REN is not in violation of
any such license or permit, and no proceeding or investigation is pending or, to
Ren's knowledge, threatened that would have the effect, directly or indirectly,
of revoking or limiting in any way such license or permits. To the extent that
any such license or permit cannot be obtained independently by Rentech without
condition other than application and the payment of applicable fees, such
licenses and permits are fully assignable to Rentech.
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3.16 Disclosure. No material representation or warranty by REN
contained in this Agreement and no statement contained in any exhibit, schedule
certificate, list, or other writing furnished to Rentech pursuant to the
provision hereof, to the best knowledge of Ren, contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements therein not materially misleading.
3.17 Certain Agreements. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance, unemployment
compensation, parachute payment, bonus or otherwise) becoming due to any
employee of REN or any other person from REN under any plan, agreement or
otherwise, (ii) increase any benefits otherwise payable to any Employee under
any plan or agreement, or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
3.18 Books and Records. REN has made available to Rentech true and
correct copies of the books and of all corporate (including minute books and
stock record books) and financial records of Ren.
3.19 Standstill. Neither REN nor any shareholder of REN has entered
into any arrangement or understanding with any person other than Rentech
regarding this sale, exchange or other disposition of any of its common stock.
3.20 Capitalization. As of the date of this Agreement, the
authorized common stock of REN consists of 50,000 shares of common stock of
which 5,600 shares were issued and outstanding. All of such outstanding shares
have been validly issued and are fully paid and nonassessable. No shares of
common stock of REN are subject to preemptive rights or any other similar rights
or any liens or encumbrances. Except as disclosed in Schedule 3.20: (i) there
are no outstanding options, warrants, script, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of Ren, or arrangements by which
REN is or may become bound to issue additional shares of capital stock of Ren,
and (ii) there are no outstanding debt securities. If requested by Rentech, REN
has furnished to Rentech, and Rentech acknowledges receipt of same by its
signature hereafter, true and correct copies of Ren's Articles of Incorporation,
as amended, as in effect on the date hereof (Articles of Incorporation), and
Ren's Bylaws, as in effect on the date hereof (the Bylaws).
3.21 Issuance of Securities. At or prior to Closing, the REN Shares
shall be duly authorized and reserved for issuance and shall be validly issued,
fully paid and non-assessable, free from all taxes, liens and charges with
respect to the issue thereof, and will not be subject to preemptive rights or
other similar rights of stockholders of Ren.
3.22 No Brokers; No General Solicitation. REN has taken no action
that would give rise to any claim by any person for brokerage commissions,
finder's fees or similar payments relating to this Agreement and the
transactions contemplated hereby. REN and Rentech both acknowledge that no
broker was involved with respect to the transactions contemplated hereby.
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ARTICLE IV.
CONDUCT OF BUSINESS PRIOR TO CLOSING
REN covenants and agrees that prior to the Closing, except as Rentech
shall have consented in writing:
4.1 Operation in Ordinary Course. Ren's business will be conducted
only in the ordinary course of business consistent with past practice.
4.2 Operation of the Business. REN shall use its best efforts to
keep its business intact and to preserve the goodwill of suppliers, customers
and others having business relations with Ren.
4.3 Employees. REN shall pay all salaries, wages, payroll taxes,
benefits, vacation pay, all other fringe benefit costs, and all other costs of
every nature whatsoever as they become due.
4.4 Payment of Liabilities. REN shall pay as the same become due
all of its liabilities.
4.5 Payment of Taxes. REN shall promptly file all tax returns and
pay all federal, state and local tax assessments and governmental charges which
are or may be lawfully levied or assessed against Ren, its business its assets,
including, but not limited to, ad valorem, sales, use, excise, franchise, and
personal property taxes.
4.6 Maintenance of Properties. REN will maintain all its assets in
customary repair, order and condition, reasonable wear and use and damage by
fire or other casualty excepted.
4.7 Maintenance of Books. REN will maintain its books, accounts
and records in the usual manner on a basis consistent with prior periods. REN
will duly comply in all material respects with all laws and decrees applicable
to it.
4.8 Update Schedules. REN shall advise Rentech of any changes in
the information provided in the schedules attached to this Agreement.
4.9 Exclusivity; Acquisition Proposals. Unless and until this
Agreement shall have been terminated by either party pursuant to Article IX,
except as required by law, REN shall not (and shall instruct their officers,
directors, agents, representatives or affiliates not to take or cause, directly
or indirectly, any of the following actions with any person other than Rentech
and its designees or agents: (i) solicit, encourage, initiate or participate in
any negotiations, inquiries or discussions with respect to any offer or proposal
to acquire all or any substantial part of Ren's assets or capital stock
(Acquisition Transaction); (ii) disclose any information not customarily
disclosed to any person concerning its business or its assets except in the
ordinary course of business consistent with past practice and as required
pursuant to a governmental request for information; (iii) enter into or execute
any agreement relating to an Acquisition Transaction, or other agreement calling
for the sale, directly or indirectly, of all or any significant part of Ren's
business or its assets; or (iv) make or authorize any public statement,
recommendation or solicitation with respect to any Acquisition Transaction or
any offer or proposal relating to an Acquisition Transaction other than with
respect to the transactions contemplated hereby.
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ARTICLE V.
PRE-CLOSING COVENANTS OF REN AND RENTECH
5.1 Environmental Survey. If Rentech elects to obtain an
environmental survey of Ren's real property, REN and Rentech shall cooperate in
obtaining, at Rentech's expense, a Phase I environmental survey of the Real
Property on which Ren's business is operated. The Phase I survey shall be
ordered from an environmental consultant by Rentech, at its expense, no later
than ten (10) days after the date hereof and shall be completed as promptly as
possible. If a Phase II environmental survey is required by the environmental
consultant preparing the Phase I survey, REN shall be responsible for the cost
of the Phase II survey.
5.2 Cooperation. Each of REN and Rentech shall use its best
efforts to cause the sale contemplated by this Agreement to be consummated, and,
without limiting the generality of the foregoing, to make all filings with and
give notices to third parties which may be necessary or reasonably required in
order to effect the transactions contemplated hereby.
5.3 Access to Premises. Between the date hereof and the Closing
Date, REN will afford to the officers and authorized representatives of Rentech
access during normal business hours to the premises, properties, and to the
books and records of REN in order that Rentech shall have the opportunity to
make such investigations as it shall desire and to permit Rentech to review such
financial and operating data and other information regarding Ren's business as
Rentech shall from time to time reasonably request. Neither party shall make
public disclosure of this Agreement prior to the Closing except as required in
connection with transfer of permits, licenses and other such transactions.
5.4 Confidentiality.
(a) Until the Closing has been completed, Rentech agrees
to keep confidential the non-public information that REN provides to
Rentech and not to use such information for any purpose whatsoever
other than evaluating the transactions contemplated in this Agreement.
Rentech further agrees that during such time it will not make any oral
or written disclosures concerning the information provided to it to any
person without the prior approval of Ren; provided, however, Rentech
may disclose such confidential information to persons subject to
Rentech's control who have a need to know such confidential information
in connection with the negotiations between Rentech and Ren, to
Rentech's affiliates, to existing or prospective lenders of or
investors in Rentech, all of whom will be directed and required to
maintain such information in the strictest confidence at all times.
(b) Except to the extent that Rentech has made public
announcements about this Agreement and its loans to and acquisition of
stock of Ren, which Rentech is expressly permitted to do, REN agrees to
keep in strictest confidence and to refrain from disclosing to any
person, except to its legal counsel, any aspect of the transactions
contemplated in this Agreement, including (without limitation) the
identify of Rentech, the existence of this Agreement, the terms and
conditions set forth in this Agreement, the contents of any discussions
and negotiations that already have taken place and that may take place
in the future, and the fact that REN or Rentech is contemplating a
transaction of the type set forth in this Agreement, as well as any
other matter relating to this Agreement or relating to the transactions
contemplated thereby.
ARTICLE VI.
REPRESENTATIONS BY RENTECH
Rentech represents, promises and warrants to REN as follows:
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6.1 Organization. Rentech is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Colorado, and has
all corporate power and authority to own its property and carry on its business
as now conducted.
6.2 Authorization. The execution, delivery and performance of this
Agreement and any other documents or instruments contemplated hereby has been
duly authorized by all necessary corporate actions of Rentech, and this
Agreement has been executed and will be delivered by Rentech and will constitute
a legal, valid and binding obligation of Rentech enforceable in accordance with
their terms.
6.3 Compliance With Other Instruments. Rentech has complete and
unrestricted power to undertake and perform all of the obligations contained in
this Agreement. Neither the execution and delivery, nor the consummation of the
transactions provided for in this Agreement, will violate the Articles of
Incorporation or the bylaws of Rentech or any material agreement, mortgage,
indenture, license, franchise, permit, lease or other instrument, judgment,
decree, order, law or regulation by which Rentech is bound.
6.4 Litigation. There is no action, suit, litigation or proceeding
pending, or, to the best knowledge of Rentech, threatened against or relating to
Rentech which could adversely affect the ability of Rentech to perform the
transactions contemplated by this Agreement.
ARTICLE VII.
CONDITIONS PRECEDENT TO RENTECH'S OBLIGATIONS
The obligation of Rentech to consummate the transactions contemplated
in this Agreement is subject to the fulfillment to its satisfaction or the
following conditions prior to or at the Closing (unless expressly waived in
writing by Rentech).
7.1 Representations, Warranties and Covenants. The representations
and warranties made by REN shall be true and correct in all material respects at
and as of the Closing Date; and REN shall have performed and complied in all
material respects with all covenants, agreements and conditions contained in
this Agreement required to be performed or complied with by it prior to the
Closing, and REN shall provide to Rentech at the Closing a certificate to such
effect executed by Ren.
7.2 Closing Documents. REN shall have taken all the actions and
delivered all the documents required of it according to the provisions of
Article II.
7.3 Litigation. There shall be no litigation pending or threatened
against REN with respect to the consummation of this Agreement or which could
adversely affect the ability of REN to transfer the REN Shares to Rentech.
7.4 No Adverse Effect, etc. No material adverse effect shall have
occurred between the date of this Agreement and completion of the Closing, nor
shall any other fact or circumstance have occurred that could be expected to
have a material adverse effect, and REN shall certify to that effect. REN shall
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not have become aware of any fact or circumstance materially adversely affecting
or that could be expected to materially adversely affect Ren's right to conduct
its business substantially as it was being conducted as of the date of this
Agreement.
7.5 Rentech's Due Diligence. Rentech shall have completed its due
diligence with respect to Ren, its business and its assets and the results of
such due diligence shall be satisfactory to Rentech.
7.6 Charter Documents, etc. REN shall have delivered (i) a copy of
its Articles of Incorporation certified by the Secretary of State of the State
of Oklahoma and a good standing certificate for REN issued by the Secretary of
State of the State of Oklahoma and (ii) a certificate of the Secretary of REN
certifying that attached thereto is a copy of Ren's bylaws as in effect on the
date thereof, copies of directors' and shareholders' resolutions authorizing the
transactions contemplated by this Agreement and certifying the incumbency of the
officers authorized to execute this Agreement and the documents and instruments
delivered by REN in connection therewith.
7.7 Agreements Between Shareholders. The Shareholders shall have
executed the Agreement Between Shareholders attached hereto as Exhibit B and
incorporated herein by this reference.
7.8 Confidentiality Agreements. The employees of REN listed on
Schedule 3.2 shall have executed Confidentiality Agreements in the form attached
hereto as Exhibit C, which is incorporated herein by this reference.
7.9 Resignation of Officers and Directors. Rentech shall have
received the resignation, effective as of the Closing, of Xxxxx X. Xxxxxxx as
Secretary and Treasurer of Ren, a form of which is attached hereto as Exhibit F
and incorporated herein by this reference.
7.10 Election of New Directors and Appointment of New Officers. The
Shareholders shall have executed a written consent increasing the number of
directors of REN to seven, and shall have appointed Xxxxxx X. Xxxx, Xxxxx X.
Xxxxxxx, Xxxxxxx Xxxx Xxxxxxxxxx and Xxxxxx X. Xxxxxxxx, to fill the vacancies
in the Board of Directors. The directors of REN shall have executed a written
consent to appoint the following persons to the offices set forth next to their
names:
Xxxx X. Xxxxxxx - President
Xxxxx X. Xxxxxxx - Vice President and Treasurer
Xxxxxx X. List - Vice President - Manufacturing
Xxxxxx X. Xxxx - Secretary
Forms of the Written Consent of Shareholders and Written Consent of Directors
are attached hereto as Exhibits D and E, respectively.
7.11 General. All instruments and legal and corporate proceedings
in connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to Rentech, and Rentech shall have
received counterpart originals, or certified or other copies, of all documents
that it may reasonably request in connection therewith.
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ARTICLE VIII.
CONDITIONS PRECEDENT TO REN'S OBLIGATIONS
The obligation of REN to consummate the transactions contemplated by
this Agreement is subject to the fulfillment to its satisfaction of the
following conditions prior to at the Closing (unless expressly waived in writing
by Ren):
8.1 Representations Warranties and Covenants. The representations
and warranties made by Rentech shall be true and correct in all material
respects at and as of the Closing Date and Rentech shall have performed and
complied in all material respects with all covenants, agreements and conditions
contained in this Agreement required to be performed or complied with by it
prior to the Closing, and Rentech shall provide to REN at the Closing a
certificate to such effect executed by an officer of Rentech.
8.2 Closing Documents. Rentech shall have taken all the actions
and delivered all the documents required of it according to the provisions of
Article II.
8.3 Employment Contracts. REN shall employ Xxxx X. Xxxxxxx as
president of REN for a period of three years from the Closing Date pursuant to
the terms and conditions of the employment contract attached hereto as Exhibit
A.
8.4 Litigation. There shall be no litigation pending or threatened
against Rentech with respect to the consummation of this Agreement.
8.5 Consideration. Rentech shall have paid to REN the Purchase
Price.
8.6 General. All instruments and legal and corporate proceedings
in connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to Ren, and REN shall have
received counterpart originals, or certified or other copies, of all documents
that it may reasonably request in connection therewith.
ARTICLE IX.
FAILURE OF CONDITIONS: REMEDIES
9.1 Failure of Conditions Precedent - No Breach. In the event any
condition precedent to the obligations of either party are not satisfied as of
the Closing and the failure to satisfy the condition precedent is not due to a
breach of this Agreement by the other party, the party whose conditions
precedent have not been satisfied shall have the option of terminating this
Agreement or waiving the unsatisfied condition precedent and closing hereunder
(and, in either event, waiving any claim for damages or indemnity relating
thereto).
9.2 Failure of Conditions Precedent of REN- Breach. In the event
any condition precedent to the obligations of REN is not satisfied on the
Closing Date and the failure to satisfy the condition precedent is due to a
breach of this Agreement by Rentech, or in the event of any other breach of this
Agreement by Rentech, REN shall have the right to terminate this Agreement, and
Rentech shall pay to REN$10,000 as liquidated damages. The parties agree that
the foregoing liquidated damages are reasonable considering all the
circumstances existing as of the date of this Agreement and constitute the good
13
faith estimate of the parties of the actual damages reasonably expected to
result from the termination of this Agreement by REN due to Rentech's breach of
this Agreement. REN agrees that, to the fullest extent permitted by law, Ren's
right to payment of such liquidated damages shall be its sole and exclusive
remedy, if the Closing does not occur, with respect to any damages whatsoever
that REN may suffer or allege to suffer as a result of any claim or cause of
action asserted by REN relating to or arising from breaches of this Agreement by
Rentech. Upon any termination of this Agreement for any reason, the entire
unpaid balance of principal and interest due on the Promissory Notes shall
become due at once.
ARTICLE X.
INDEMNIFICATION
10.1 Survival of Representations Warranties and Covenants. All of
Ren's representations, covenants and warranties contained herein and in any
documents delivered pursuant to this Agreement (except those waived pursuant to
Section 9.1) shall survive the Closing hereunder.
10.2 Indemnity by Ren. REN shall indemnify, save, and hold harmless
Rentech from any damages as hereinafter defined. Damages, as used herein, shall
mean and include any loss, cost, expense, or other liability, including counsel
fees, which Rentech may incur or suffer, by reason of the inaccuracy of any of
Ren's representations contained in this Agreement.
10.3 Indemnity by Rentech. Rentech shall indemnify, save, and hold
harmless REN from any damages as hereinafter defined. Damages, as used herein,
shall mean and include any loss, cost, expense, or other liability, including
counsel fees, which REN may incur or suffer by reason of the inaccuracy of any
representation of Rentech contained in this Agreement.
10.4 Procedures for Indemnification. The party entitled to
indemnification (Indemnitee) shall, as promptly as is reasonably practicable
after it becomes aware thereof, notify the other party (Indemnitor) of the
existence of any claim, demand or other matter to which Indemnitor's
indemnification obligations apply and shall give Indemnitor a reasonable
opportunity to defend the same at its own expense and with counsel of its own
selection reasonably acceptable to Indemnitee; provided, that Indemnitee shall
at all times, also have the right to fully participate in the defense at its own
expense. Indemnitor may, at its own discretion, settle any dispute, demand or
claim defended by it hereunder; provided, any such settlement shall be solely
for Indemnitor's account and Indemnitee shall not be liable for any amounts
whatsoever payable in connection with any such settlement. If Indemnitor shall,
within a reasonable time after notice to it, fail to so defend, Indemnitee shall
have the right, but not the obligation, to undertake the defense of, and to
compromise or settle (exercising reasonable business judgment), the claim or
other matter on behalf, and at the risk of, Indemnitor.
ARTICLE XI.
GENERAL
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11.1 Notice. All notices, requests, demands and other
communications hereunder shall be furnished to the other party at its address
listed below (or such other address as provided in accordance with this Section
11.1), shall be in writing, and shall be sent either by telecopy, hand delivery,
or reputable overnight courier, addressed as follows or to such other address or
addresses of which the respective party shall have notified the other party.
Each such notice or other communication shall be effective (a) if given by
telecopy, when such telecopy is transmitted and the transmission thereof is
confirmed by the sender's telecopier, (b) if given by reputable overnight
courier, one business day after being delivered to such courier or (c) if given
by any other means, when actually received.
(a) If to Rentech, to:
-----------------
Rentech, Inc.
Attention: Xxxxxx X. Xxxx, Vice President
0000 00xx Xx., Xxxxx 000
Xxxxxx, XX 00000
(b) If to Rentech, to:
-----------------
REN Corporation
Attention: Xxxx X. Xxxxxxx, President
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
11.2 Amendment. This Agreement may be amended or modified only by a
written instrument executed by the party hereto against which it is to be
enforced.
11.3 Expense of Parties. Except as otherwise specifically provided
herein, each party to this Agreement shall pay its own expenses (including,
without limitation, the fees and expenses of their respective agents,
representatives, counsel and accountants) incidental to the preparation and
carrying out of this Agreement. In the event a party commences legal action
against another party to enforce its rights under this Agreement, the prevailing
party in such action shall be entitled to recover all of its costs and expenses
in connection therewith, including reasonable attorneys' fees and costs.
11.4 Brokers. REN agrees to indemnify Rentech, and Rentech agrees
to indemnify Ren, against any claim by any third person for any commission,
brokerage, finder's fee or other payment based upon any alleged agreement or
understanding between such party and such third person, whether expressed or
implied from the actions of such party.
11.5 Governing Law. This Agreement is being delivered in and shall
be construed in accordance with and governed by the laws of the State of
Colorado.
11.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Terms used with initial capital letters shall
not in any way affect the meaning or interpretation of this Agreement. Terms
used with initial capital letters will have the meanings specified, applicable
to both singular and plural forms, for all purposes of this Agreement. All
pronouns (and any variation) will be deemed to refer to the masculine, feminine
or neuter, as the identify of the person may require. The singular or plural
includes the other, as the context requires or permits. The word include (and
any variation) is used in an illustrative sense rather than a limiting sense.
The word "day" means a calendar day. All references to "Sections" are to
sections of this Agreement unless indicated otherwise.
15
11.7 Prior Agreements; Counterparts. This Agreement, with its
Exhibits and Schedules, merges and integrates all prior agreements and
representations respecting this transaction, whether written or oral, and
constitutes the sole agreement of the parties in connection therewith. This
Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.8 Assignment. This Agreement shall not be assignable by REN or
Rentech, except that Rentech may assign this Agreement to a corporation of which
Rentech is the sole shareholder provided Rentech remains fully liable to REN
hereunder. Subject to the foregoing, this Agreement shall be binding upon, and
inure to the benefit of, and be enforceable by, the respective successors and
permitted assigns of REN and Rentech. Nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies
under or by reason of this Agreement.
11.9 Waiver. The failure of any party to enforce any right arising
under this Agreement on one or more occasions shall not operate as a waiver of
that or any other right on that or any other occasion.
11.10 Exclusivity of Representations. REN shall not be deemed to
have made to Rentech any representation or warranty other than as expressly made
by REN in Section 3. Rentech shall not be deemed to have made to REN any
representation or warranty other than as expressly made by Rentech in Section 6.
11.11 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.12 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed as
if drafted jointly by the parties, and no presumption or burden of proof will
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The parties intend that each representation,
warranty and covenant contained herein will have independent significance. If
any party breaches any representation, warranty or covenant contained herein in
any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty or covenant.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date given in the opening paragraph.
SELLER: BUYER:
REN CORPORATION RENTECH, INC.
By: By:
-------------------------- ---------------------------------
Xxxx X. Xxxxxxx, President Xxxxx X. Xxxxxxx,
Vice President - Finance
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