STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as of
November 10, 2003 (the "Effective Date"), by and among Solico
International, Inc., a Texas corporation (such corporation and/or
its assignees, "Purchaser"), and Xxxxxxxx, Xxxxxxxxx and Company
("Seller"). Purchaser and Seller are sometimes collectively
referred to herein as the "Parties" and individually as a
"Party."
RECITALS
Seller owns 60,000 shares (the "Shares") of the issued and
outstanding shares of common stock, par value $.01 per share (the
"Common Stock") of American Building Control, Inc., a Delaware
corporation (the "Company").
Purchaser desires to acquire, and Seller desires to sell,
all right, title and interest of Seller in and to (45,000) of the
Shares on the terms and conditions set forth herein.
AGREEMENT
The parties, in consideration of the mutual covenants,
agreements and understandings herein contained, and intending to
be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
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For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Article I:
"AGREEMENT" has the meaning set forth in the preamble
hereto.
"BEST EFFORTS" means the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances
to ensure that such result is achieved as expeditiously as
possible.
"BREACH" means, with respect to a representation, warranty,
covenant, obligation, or other provision of this Agreement or any
Transaction Document or other certificate or instrument delivered
pursuant to this Agreement, any inaccuracy in or breach of, or
any failure to perform or comply with, such representation,
warranty, covenant, obligation, or other provision.
"CLOSING" has the meaning set forth in Section 2.3.
"CLOSING DATE" means the date and time as of which the First
Closing, Second Closing or Purchase Option Closing actually takes
place.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the preamble hereto.
"COMPANY TRANSACTIONS" means any (i) reorganization,
liquidation or recapitalization of the Company, (ii) merger or
consolidation involving the Company, (iii) purchase or sale of
any assets or capital stock (other than a purchase or sale of
equipment in the Ordinary Course of Business) of the Company or
(iv) similar transaction or business combination involving the
Company or the assets of the Company (each of the foregoing
actions described in clauses (i) through (iv).
"CONSENT" means any approval, consent, ratification, waiver
or other authorization (including any Governmental
Authorization)."Contemplated Transactions" means all of the
transactions contemplated by this Agreement, including, without
limitation:
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(a) the delivery of the Purchase Price in exchange for
the Shares, and Purchaser's ownership and control of the
Shares;
(b) the execution, delivery and performance of the
other Transaction Documents;
(c) the satisfaction of all conditions set forth in
Articles VI and VII; and
(d) the performance by Purchaser and Seller of their
respective covenants and obligations under this Agreement.
"CONTRACT" means any agreement, contract, obligation,
promise, or undertaking (whether written or oral and whether
express or implied) that is legally binding.
"DAMAGES" has the meaning set forth in Section 9.2.
"EFFECTIVE DATE" has the meaning set forth in the preamble
hereto.
"ENCUMBRANCE" means any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge,
security interest, right of first refusal or restriction of any
kind, including any restriction on use, voting, transfer, receipt
of income or exercise of any other attribute of ownership other
than (a) mechanic's, materialmen's and similar liens, (b) liens
for Taxes not yet due and payable or for Taxes that a taxpayer is
contesting in good faith through appropriate Proceedings, (c)
purchase money liens and liens securing rental payments under
capital lease arrangements and (d) other liens arising in the
Ordinary Course of Business and not incurred in connection with
the borrowing of money.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor law, and regulations and rules issued
pursuant to that act or any successor law.
"FIRST CLOSING" has the meaning set forth in Section 2.1(a).
"FIRST CLOSING SHARES" has the meaning set forth in Section
2.1(a).
"FIRST PURCHASE PRICE" has the meaning set forth in Section
2.1(a).
"GOVERNMENTAL AUTHORIZATION" means any approval, consent,
license, permit, waiver, or other authorization issued, granted,
given or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement.
"GOVERNMENTAL BODY" means any nation, state or other
jurisdiction, or federal, state, local or foreign government, or
governmental or quasi-governmental authority of any nature
(including any agency, court or other tribunal) or body
exercising any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature.
"INDEMNIFYING PARTY" has the meaning set forth in Section
9.2.
"INDEMNIFIED PERSONS" has the meaning set forth in Section
9.2.
"JOINT DEFENSE PROCEEDING" has the meaning set forth in
Section 9.3.
"KNOWLEDGE" means, with respect to an individual, such
individual being actually aware of such fact; with respect to a
Person other than an individual, such Person will be deemed to
have "Knowledge"
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of a particular fact if any individual who is serving as a
director, officer, partner, executor or trustee of such Person
(or in any similar capacity) has Knowledge of such fact.
"LEGAL REQUIREMENT" means any federal, state, local,
municipal, foreign, international, multinational, or other
administrative order, constitution, law, ordinance, principle of
common law, regulation, statute, or treaty.
"LOAN DOCUMENTS" means, collectively, (i) the Note Secured
By Stock Pledge Agreement dated as of September 22, 2003, made by
Xxxxxx X. Xxxxxx in favor of Xxxxx X. Xxxxx in the original
principal amount of $200,000, (ii) the Stock Pledge Agreement
dated as of September 22, 2003, by and between Xxxxxx X. Xxxxxx
and Xxxxx X. Xxxxx, and (iii) all other documents and instruments
contemplated thereby to be executed by one or more of the parties
thereto in connection with the consummation of the transactions
contemplated therein.
"MATERIAL ADVERSE EFFECT" means a material and adverse
effect upon the Contemplated Transactions or upon the business,
assets, liabilities, condition (financial or otherwise),
operating results, employee, customer or supplier relations,
business prospects, cash flow or working capital of the Company.
"OPTION SHARES" has the meaning set forth in Section 2.2(a).
"ORDER" means any award, decision, injunction, judgment,
order, ruling, subpoena or verdict entered, issued, made or
rendered by any court, administrative agency or other
Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" means an action taken by a
Person that is consistent with the past practices of such Person,
is taken in the ordinary course of the normal day-to-day
operations of such Person, and is not required to be authorized
by the board of directors or other governing body of such Person.
"PARTY" has the meaning set forth in the preamble hereto.
"PERSON" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization, labor union or other entity or Governmental Body.
"PURCHASE OPTION" has the meaning set forth in Section
2.2(a).
"PURCHASE OPTION CLOSING" has the meaning set forth in
Section 2.2(c).
"PURCHASE OPTION EXPIRATION DATE" has the meaning set forth
in Section 2.2(a).
"PURCHASE OPTION PURCHASE PRICE" has the meaning set forth
in Section 2.2(a).
"PURCHASE PRICE" has the meaning set forth in Section 2.1.
"PURCHASED SHARES" has the meaning set forth in Section 2.1.
"PROCEEDING" means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, conducted
or heard by or before any Governmental Body or arbitrator.
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"PURCHASE PRICE" has the meaning set forth in Section 2.1.
"PURCHASER" has the meaning set forth in the preamble
hereto.
"PURCHASER DISCLOSURE SCHEDULE" has the meaning set forth in
the preamble to Article IV.
"SEC" means Securities and Exchange Commission.
"SECOND CLOSING" has the meaning set forth in Section
2.1(b).
"SECOND CLOSING SHARES" has the meaning set forth in Section
2.1(b).
"SECOND PURCHASE PRICE" has the meaning set forth in Section
2.1(b).
"SECURITIES ACT" means the Securities Act of 1933, as
amended, or any successor law, and regulations and rules issued
pursuant to that act or any successor law.
"SELLER" has the meaning set forth in the preamble hereto.
"SELLER COMPLIANCE CERTIFICATE" has the meaning set forth in
Section 2.4(a)(iii).
"SELLER DISCLOSURE SCHEDULE" has the meaning set forth in
the preamble to Article III.
"SHARES" has the meaning set forth in the recitals hereto.
"TAX" or "TAXES" means all federal, state, local, foreign
and other taxes, charges, fees, duties, levies, imposts, customs
or other assessments, including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, profit sharing, license, lease,
service, service use, value added, withholding, payroll,
employment, excise, estimated, severance, stamp, recording,
occupation, premium, property, windfall profits, or other taxes,
fees, assessments, customs, duties, levies, imposts, or charges
of any kind whatsoever, together with any interest, penalties,
additions to tax, fines or other additional amounts imposed
thereon or related thereto, and the term "Tax" means any one of
the foregoing Taxes.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement
and all other documents and instruments contemplated by this
Agreement to be executed by one or more of the Parties in
connection with the consummation of the transactions contemplated
herein.
ARTICLE II
STOCK PURCHASE
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2.1 TRANSACTIONS. On the basis of the representations,
warranties, covenants and agreements and subject to the
satisfaction or waiver of the conditions set forth herein, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller, (45,000) of the Shares (the "Purchased Shares") for
an aggregate purchase price of $105,000 (the "Purchase Price"),
as follows:
(a) First Closing. The closing (the "First Closing")
of the purchase and sale of 15,000 of the Purchased Shares (the
"First Closing Shares"), for a purchase price of $2.00 per share
(the "First Purchase Price"), will take place at 11:00 a.m.
Central, on or before December 15, 2003, at the offices of
Xxxxxxx & Xxxxx L.L.P., 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, or at such other time and place as the Parties may
agree.
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(b) Second Closing. The closing (the "Second
Closing") of the purchase of 15,000 Purchased Shares (the "Second
Closing Shares"), for a purchase price of $2.25 per share (the
"Second Purchase Price"), will take place at 11:00 a.m. Central,
on March 30, 2004 at the offices of Xxxxxxx & Xxxxx L.L.P., 000
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, or at such
other time and place as the Parties may agree.
2.2 PURCHASE OPTION.
(a) Option. Purchaser shall have the right, but not
the obligation, to purchase 15,000 of the remaining Shares owned
by Seller after the Second Closing (the "Option Shares"), at any
time after the Second Closing and on or before June 30, 2004 (the
"Purchase Option Expiration Date"), for a purchase price of $2.75
per share (the "Purchase Option Purchase Price").
(b) Exercise. Purchaser may exercise the Purchase
Option by delivery of written notice to Seller of its election to
exercise the Purchase Option on or before the Purchase Option
Expiration Date.
(c) Purchase Option Closing. The closing of the
purchase and sale of the Option Shares pursuant to the exercise
of the Purchase Option by Purchaser (the "Purchase Option
Closing") will take place at 11:00 a.m. Central no later than ten
(10) business days following the date of delivery to Seller of
Purchaser's notice of exercise pursuant to Section 2.3(b) above,
at the offices of Xxxxxxx & Xxxxx L.L.P., 000 Xxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000, or at such other time and place
as the Parties may agree.
2.3 CLOSING DELIVERIES. At the First Closing, Second
Closing, and Purchase Option Closing, if any (each, a "Closing"):
(a) Seller will:
(i) deliver to Purchaser all certificates
representing the Shares to be purchased at such Closing, duly
endorsed (or accompanied by duly executed stock powers) for
transfer to Purchaser;
(ii) deliver to Purchaser a certificate executed
by Seller stating that (A) each of Seller's representations and
warranties in this Agreement was accurate in all respects as of
the Effective Date and is accurate in all respects as of such
Closing Date as if made on such Closing Date, and (B) the
conditions set forth in Articles VI and VII have been fulfilled
(the "Seller Compliance Certificate"); and
(iii) deliver to Purchaser the other
certificates, instruments and documents referred to in Article
VII below and required to be delivered by Seller on or prior to
such Closing Date.
(b) Purchaser will:
(i) deliver to Seller the portion of the Purchase
Price for the Shares to be purchased at such Closing, or the
Purchase Option Price in the case of the Purchase Option Closing,
by wire transfer of immediately available funds to an account
designated by Seller; and
(ii) deliver to Seller the other certificates,
instruments and documents referred to in Article VII below and
required to be delivered by Purchaser on or prior to such Closing
Date.
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2.4 VOTING RIGHTS; IRREVOCABLE PROXY. The Parties agree
that as of the Effective Date, Purchaser alone shall exercise all
voting rights with respect to all of the Purchased Shares and
Option Shares owned by Seller (the "Voting Shares").
Accordingly, Seller hereby grants to Purchaser, effective as of
the Effective Date, an irrevocable special power of attorney to
act as Seller's attorney-in-fact to vote on behalf of Seller, and
to execute any resolution or consent evidencing Seller's vote,
approval or consent of any action submitted to the vote, approval
or consent, and to execute on behalf of Seller and deliver any
documentation deemed necessary by Purchaser in connection with
any matter or action to be taken in respect of the Voting Shares,
including, without limitation, taking action with respect to any
matter submitted to the vote of the holders of Common Stock of
the Company. Seller hereby agrees to execute all resolutions,
consents, agreements and other documents deemed necessary by
Purchaser to effect and/or evidence the foregoing, and Seller
agrees not to raise any objection to any action so taken by
Purchaser in respect of the Voting Shares. Seller hereby waives
any appraisal rights or rights to dissent under applicable Legal
Requirements arising due to Seller's ownership of any Voting
Shares. Notwithstanding the foregoing, in the event that the
Second Closing is not consummated on or before March 30, 2004,
and the date of such Second Closing has not been extended by the
mutual agreement of the Parties, then the proxy set forth in this
Section 2.5 shall terminate and be of no further force or effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
-----------------------------------------
Seller represents and warrants to Purchaser as of the date
of this Agreement and as of each Closing Date that, except as
otherwise set forth on the Seller Disclosure Schedule attached
hereto (the "Seller Disclosure Schedule"):
3.1 AUTHORITY. Seller has full power and authority to
execute and deliver this Agreement and to perform his obligations
hereunder.
3.2 ENFORCEABILITY; NO CONFLICT.
(a) Upon the execution and delivery by Seller of the
Transaction Documents to which Seller is a party, each such
Transaction Document will constitute the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance
with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally
and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable
remedies.
(b) Seller will not be required to give any notice to
or obtain any Consent from any Person in connection with the
execution and delivery of the Transaction Documents or the
consummation or performance of any of the Contemplated
Transactions, and neither the execution and delivery of the
Transaction Documents or the Loan Documents, nor the consummation
or performance of any of the Contemplated Transactions, will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with or result in a
violation of any Legal Requirement or any Order to which Seller
or any of the assets owned or used by Seller is subject;
(ii) contravene, conflict with or result in a
violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate or modify, any Governmental Authorization that is held
by Seller or that otherwise relates to its business or any of the
assets owned or used by it;
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(iii) contravene, conflict with or result in
a violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate or modify, any Contract, or result in the imposition or
creation of any Encumbrance upon or with respect to any of the
assets owned or used by it.
3.3 TITLE TO SHARES. Seller is and will be (i) on the
Effective Date, the record and beneficial owner and holder of all
of the Shares (including the Xxxxx Shares, First Closing Shares,
Second Closing Shares and Option Shares), (ii) on the First
Closing Date the record and beneficial owner and holder of the
First Closing Shares, Second Closing Shares and Option Shares,
(iii) on the Second Closing Date, the owner and holder of the
Second Closing Shares and the Option Shares, and (iv) on the
Purchase Option Closing Date the record and beneficial owner and
holder of the Option Shares, in each case free and clear of all
Encumbrances other than any restrictions on transfer under
applicable federal or state securities laws or under the
Transaction Documents and the Loan Documents. No legend or other
reference to any purported Encumbrance appears upon any
certificate representing the Shares other than any restrictions
on transfer under applicable federal or state securities laws.
There are no oral or written agreements relating to the issuance,
sale or transfer by Seller of any right or interest in the
Shares.
3.4 LEGAL PROCEEDINGS; ORDERS.
(a) There is no pending Proceeding that challenges, or
that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated
Transactions. To the Knowledge of Seller, no such Proceeding has
been threatened and no event has occurred or circumstance exists
that may give rise to or serve as a basis for the commencement of
any such Proceeding.
(b) There is no Order to which Seller, or any of the
assets owned or used by Seller, is subject that may have the
effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions.
(c) Seller is not subject to any Order that relates to
the business of, or any of the assets owned or used by, the
Company.
3.5 COMPANY TRANSACTIONS. Except as otherwise disclosed in
publicly-available filings made by the Company or Seller with the
SEC, neither Seller nor any Person related to Seller is a party
to or bound by any Contract with respect to a Company Transaction
other than this Agreement and the other Transaction Documents,
and the Seller and all Persons related to Seller have terminated
all discussions with third parties regarding Company
Transactions. Except as otherwise disclosed in publicly-
available filings made by the Company or Seller with the SEC,
neither Seller nor any Person related to Seller has or may
acquire any rights under, or is bound by or has or may become
subject to any obligation or liability under, any Contract that
relates to the business of, or any of the assets owned or used
by, the Company. Except as otherwise disclosed in publicly-
available filings made by the Company or Seller with the SEC,
neither Seller nor any shareholder, director, officer, employee
or other Person related to Seller is indebted to the Company, nor
is the Company indebted (or committed to make loans or extent or
guarantee credit) to any of them. None of such persons has any
direct or indirect ownership interest in any Person with which
the Company is affiliated or with which the Company has a
business relationship, or any Person that competes with the
Company, except for stock in a publicly traded company owned by
such persons representing less than five percent (5%) of the
outstanding capital stock of such company.
3.6 BROKERAGE. There are no claims for brokerage
commissions, finders' fees or similar compensation in connection
with the Contemplated Transactions based on any arrangement or
agreement binding upon Seller. Seller shall pay, and hold
Purchaser harmless against, any liability, loss or expense
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(including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses) arising in connection with any such
claim.
3.7 DISCLOSURE. No representation or warranty of Seller in
this Agreement and no statement in the Seller Disclosure Schedule
or any instrument, certificate or document delivered in
connection with the Contemplated Transactions contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements herein or therein, in light of
the circumstances in which they were made, not misleading. There
is no fact known to Seller that has specific application to
either Seller or the Company (other than general economic or
industry conditions) and that could have a Material Adverse
Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser represents and warrants to Seller as of the date
of this Agreement and as of each Closing Date that, except as set
forth on the Purchaser Disclosure Schedule attached hereto (the
"Purchaser Disclosure Schedule"):
4.1 ORGANIZATION; CORPORATE AUTHORITY; GOOD STANDING.
Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the state of its
incorporation, with full corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder.
4.2 AUTHORITY. Upon the execution and delivery of the
Transaction Documents, each of the Transaction Documents will
constitute the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
4.3 BROKERAGE. There are no claims for brokerage
commissions, finders' fees or similar compensation in connection
with the Contemplated Transactions based on any arrangement or
agreement binding upon Purchaser. Purchaser shall pay, and hold
Seller harmless against, any liability, loss or expense
(including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses) arising in connection with any such
claim.
4.4 DISCLOSURE. No representation or warranty of Purchaser
in this Agreement and no statement in the Purchaser Disclosure
Schedule or any instrument, certificate or document delivered in
connection with the Contemplated Transactions contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements herein or therein, in light of
the circumstances in which they were made, not misleading.
ARTICLE V
COVENANTS
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5.1 BEST EFFORTS. Seller will use its reasonable Best
Efforts to take all actions and do all things necessary, proper
or advisable in order to consummate and make effective the
Contemplated Transactions (including satisfaction, but not
waiver, of the conditions set forth in Articles VI and VII).
5.2 REQUIRED APPROVALS. As promptly as practicable after
the Effective Date, Seller will, and will use its reasonable Best
Efforts to cause the Company to, make all filings required by
Legal
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Requirements to be made by them in order to consummate the
Contemplated Transactions. Seller will, and will use its
reasonable Best Efforts to cause the Company to, (a) cooperate
with Purchaser with respect to all filings that Purchaser elects
to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions, (b) give required
notices to third parties, (c) obtain any required third party
consents and (d) take any actions reasonably requested by a third
party, in each case, in connection with the Contemplated
Transactions.
5.3 NOTIFICATION. Each Party will give prompt written
notice to the other Party (a) if it becomes aware that any
representation or warranty made by such Party herein as of the
Effective Date has, to the best Knowledge of such Party,
subsequently become untrue, (b) of the beach of any covenant
hereunder by any Party and (c) of any other material development
that in its reasonable judgment adversely affects its ability to
consummate the Contemplated Transactions.
5.4 EXCLUSIVITY. Seller shall not, directly or indirectly,
(a) submit, solicit, initiate, encourage, vote for or consent to
any proposal or offer from any Person or enter into any Contract
or accept any offer relating to any (i) reorganization,
liquidation or recapitalization of the Company, (ii) merger or
consolidation involving the Company, (iii) purchase or sale of
any assets or capital stock (other than a purchase or sale of
equipment in the Ordinary Course of Business) of the Company or
(iv) similar transaction or business combination involving the
Company or the assets of the Company (each of the foregoing
actions described in clauses (i) through (iv), a "Company
Transaction"), or (b) furnish any information with respect to,
assist or participate in or facilitate in any other manner any
effort or attempt to do or seek to do any of the foregoing.
5.5 ACTIONS WITH RESPECT TO SHARES. Seller agrees that it
will not (a) sell, redeem, convert, assign, exchange, transfer,
pledge or otherwise dispose of any of Seller's right, title and
interest in and to any of the Shares, except as expressly
permitted by this Agreement, or (b) enter into any other
transaction or Contract with the Company without Purchaser's
prior written consent, which written consent may be withheld in
Purchaser's sole discretion.
5.6 EXCHANGE ACT FILINGS. Each Party shall make all
filings as and when required to be made with the SEC pursuant to
the Exchange Act as a result of the execution of this Agreement
and the consummation of the Contemplated Transactions. Without
limiting the foregoing, the Parties shall make the following
filings:
(a) all filings required pursuant to Section 16(a) of
the Exchange Act, including, without limitation, any Form 3
Initial Statement of Beneficial Ownership of Securities required
to be filed by Purchaser and its affiliates and any Form 4
Statement of Changes in Beneficial Ownership required to be filed
by Seller; and
(b) all filings required to pursuant to Rule 13(d)-
1(a) of the Exchange Act, including, without limitation, any
Schedule 13D required to be filed by Purchaser and/or Seller.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE
-------------------------------------------
Each Party's obligation to take the actions required to be
taken by such Party at the First Closing and the Second Closing
is subject to the satisfaction, at or prior to such Closing, of
each of the following conditions (any of which may be waived by
it in writing, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS. All of the other Party's
representations and warranties in this Agreement (considered
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collectively), and each of these representations and warranties
(considered individually), must have been accurate as of the
Effective Date, and must be accurate as of such Closing Date as
if made on such Closing Date.
6.2 PERFORMANCE.
(a) All of the covenants and obligations that the
other Party is required to perform or to comply with pursuant to
this Agreement at or prior to such Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and
complied with.
(b) Each document required to be delivered by the
other Party pursuant to Section 2.3 must have been delivered, and
each of the other Party's covenants and obligations contained in
this Agreement must have been performed and complied with.
6.3 NO PROCEEDINGS. There must not be pending against such
Party, or against any Person affiliated with such Party, any
Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of
the Contemplated Transactions.
6.4 NO PROHIBITION. Neither the consummation nor the
performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time),
materially contravene, or conflict with, or result in a material
violation of, or cause the Party or any Person affiliated with
the Party to suffer any material adverse consequence under, (a)
any applicable Legal Requirement or Order, or (b) any Legal
Requirement or Order that has been published, introduced, or
otherwise proposed by or before any Governmental Body.
ARTICLE VII
CONDITION PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
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In addition to the conditions set forth in Article VI,
Purchaser's obligation to purchase the Shares and to take the
other actions required to be taken by Purchaser at the First
Closing and the Second Closing is subject to the satisfaction, at
or prior to such Closing, of each of the following conditions
(any of which may be waived in writing by Purchaser, in whole or
in part):
7.1 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS.
There must not be pending any claim by any Person against the
Company or Seller asserting that such Person (a) is the holder or
the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any of the Shares, or (b) is entitled to
all or any portion of the consideration payable for the Shares.
7.2 MATERIAL ADVERSE EFFECT. There shall not have occurred
or be reasonably expected to occur any Material Adverse Effect.
7.3 OPERATION OF BUSINESS. The Company will not have since
the Effective Date (a) entered into any transaction, arrangement
or Contract except on an arm's-length basis in the Ordinary
Course of Business, (b) increased any officer's or employee's
compensation, incentive arrangements or other benefits out of the
Ordinary Course of Business, (c) redeemed, purchased or otherwise
acquired, directly or indirectly, any of the Company's issued and
outstanding capital stock or equity interests, or any outstanding
rights or securities exercisable or exchangeable for or
convertible into capital stock of the Company, (d) amended its
certificate of incorporation or bylaws, or (e) submitted,
solicited, initiated, voted for or consented to any proposal or
offer from any Person or entered into any Contract or accepted
any offer relating to, any Company Transaction.
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7.4 PROCEEDINGS. All corporate and other required or
necessary to be taken by the Company or Seller in connection with
the Contemplated Transactions shall have been taken at or prior
to such Closing and all documents incident thereto shall be
satisfactory in form and substance to Purchaser and its counsel.
7.5 FILINGS. The Company and Seller shall have made all
filings required to be made by the Company and Seller under all
applicable Legal Requirements, including, without limitations,
federal and state securities laws, to consummate the Contemplated
Transactions.
7.6 CONSENTS AND APPROVALS. All Consents and Governmental
Authorizations by any Governmental Body or other Person that are
required for the consummation of the Contemplated Transactions or
in order to prevent a breach of, or default under, or a
termination, change in the terms or conditions or modification
of, any Contract to which the Company or Seller is a party, will
have been obtained on terms and conditions satisfactory to
Purchaser.
7.7 CAPITAL STRUCTURE. Between the Effective Date and such
Closing Date, without the prior written consent of Purchaser, the
Company will not have issued or entered into any Contract to
issue any shares of its capital stock or options, warrants or
securities convertible into or exercisable for shares of its
capital stock other than shares issuable upon the exercise of
options, warrants or securities convertible into or exercisable
for shares of its capital stock that are outstanding as of the
Effective Date or granted prior to Closing under existing option
plans on an arm's-length basis in the Ordinary Course of
Business.
7.8 CLOSING DOCUMENTS. At such Closing, Seller shall have
delivered to Purchaser all of the following documents:
(a) a Seller Compliance Certificate;
(b) copies of all third party and governmental
Consents and filings required in connection with the consummation
of the Contemplated Transactions (including, without limitation,
all blue sky filings and waivers of all preemptive rights and
rights of first refusal); and
(c) such other documents relating to the Contemplated
Transactions as Purchaser or its counsel may reasonably request.
ARTICLE VIII
TERMINATION
-----------
8.1 TERMINATION EVENTS. This Agreement may, by notice
given prior to the Purchase Option Closing Date (if any) or
Purchase Option Expiration Date (if not exercised), be
terminated:
(a) by either Purchaser or Seller if a material Breach
of any provision of this Agreement has been committed by the
other party and such Breach has not been waived by the non-
breaching Party;
(b) by either Party if any of the conditions in
Article VI has not been satisfied as of the First Closing Date or
Second Closing Date or if satisfaction of such a condition is or
becomes impossible, and the other Party has not waived such
condition on or before such Closing Date, unless the Party
seeking to terminate this Agreement has caused, directly or
indirectly, such condition to be unsatisfied or become
impossible;
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(c) by Purchaser if any of the conditions in Article
VII has not been satisfied as of the First Closing Date or Second
Closing Date or if satisfaction of such a condition is or becomes
impossible, and Purchaser has not waived such condition on or
before such Closing Date, unless Purchaser has caused, directly
or indirectly, such condition to be unsatisfied or become
impossible;
(d) by mutual consent of Purchaser and Seller;
(e) by either Purchaser or Seller if the First Closing
has not occurred on or before December 31, 2003, or such later
date as the parties may agree upon; or
(f) by Purchaser upon the occurrence of an Event of
Default under the Loan Documents.
8.2 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 8.1, all further obligations of the Parties
under this Agreement will terminate, except for the rights and
obligations set forth in Section 2.2, Article IX and Sections
10.1 and 10.2, and for liability for any Breach of this Agreement
prior to the time of such termination, all of which shall survive
any termination of this Agreement. Notwithstanding the
foregoing, if this Agreement is terminated by a Party under
Section 8.1 because one or more of the conditions to any Closing
is not satisfied as a result of the other Party's intentional or
deliberate actions, the terminating Party will be entitled to
pursue all legal remedies, including, but not limited to actual
damages, which right will survive such termination unimpaired.
ARTICLE IX
INDEMNIFICATION; REMEDIES
-------------------------
9.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE. All representations, warranties, covenants, and
obligations in this Agreement and the certificates and other
Transaction Documents delivered pursuant to Section 2.3 will
survive until twelve (12) months following the Purchase Option
Expiration Date; provided, the representations, warranties and
covenants made under Section 3.3 (Title to Shares) shall survive
indefinitely. The right to indemnification, payment of Damages
or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any
investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or
before or after any Closing Date, with respect to the accuracy or
inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on
the performance of or compliance with any covenant or obligation,
will not affect the right to indemnification, payment of Damages,
or other remedy based on such representations, warranties,
covenants and obligations.
9.2 INDEMNIFICATION. Subject to the limitations set forth
in Section 9.3 below, each Party (the "Indemnifying Party") will
indemnify and hold harmless the other Party and its respective
representatives, shareholders, controlling persons and affiliates
(collectively, the "Indemnified Persons") for, and will pay to
the Indemnified Persons the amount of, any loss, liability,
claim, damage (including incidental and consequential damages),
expense (including costs of investigation and defense and
reasonable attorneys' fees) or diminution of value, whether or
not involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with any
Breach of any representation, warranty, covenant or agreement
made by the Indemnifying Party in this Agreement or any
Transaction Document (including the schedules and exhibits
attached hereto or thereto). The remedies provided in this
Section 9.2 will not be exclusive of or limit any other remedies
that may be available to the Parties.
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9.3 DEFENSE OF CLAIMS. An Indemnified Person seeking
indemnification under this Article IX shall give written notice
to the Indemnifying Party of the facts and circumstances giving
rise to the claim. In that regard, if any Proceeding shall be
brought or asserted by any third party which, if adversely
determined, would entitle the Indemnified Person to indemnity
pursuant to this Article IX, the Indemnified Person shall within
thirty (30) days notify the Indemnifying Party of the same in
writing, specifying in detail the basis of such claim and the
facts pertaining thereto; provided that the failure to so notify
an Indemnifying Party shall not relieve the Indemnifying Party of
its obligations hereunder except to the extent such failure shall
have harmed the Indemnifying Party. The Indemnifying Party, if
it so elects, shall assume and control the defense of such
Proceeding (and shall consult with the Indemnified Person with
respect thereto), including the employment of counsel reasonably
satisfactory to the Indemnified Person and the payment of
expenses; provided that in the event any Proceeding shall be
brought or asserted by any third party which, if adversely
determined, would not entitle the Indemnified Person to full
indemnity pursuant to this Article IX, the Indemnified Person may
elect to participate in the joint defense of such Proceeding (a
"Joint Defense Proceeding") for which the expenses of such joint
defense will be shares equally by such parties and the employment
of counsel shall be reasonably satisfactory to both parties. If
the Indemnifying Party elects to assume and control the defense
of a Proceeding, it will provide notice thereof within thirty
(30) days after the Indemnified Person has given notice of the
matter and if such Proceeding is not a Joint Defense Proceeding,
the Indemnified Person shall have the right to employ counsel
separate from counsel employed by the Indemnifying Party in any
such action and to participate in the defense thereof, but the
fees and expenses of such counsel employed by the Indemnified
Person shall be at the expense of the Indemnified Person unless
(a) the employment thereof has been specifically authorized by
the Indemnifying Party in writing or (b) the Indemnifying Party
has failed to assume the defense and employ counsel reasonably
satisfactory to the Indemnified Person. Neither the Indemnified
Person nor the Indemnifying Party may consent to the entry of any
judgment with respect to the matter or enter into any settlement
with respect to the matter which judgment or settlement does not
release the other Party from all liability to the third party
with respect thereto without the consent of the other Party,
which consent shall not be unreasonably withheld (it being
understood that the extent to which any Party will be obligated
to pay for Damages resulting from such matter as compared to the
other Party shall be considered in determining whether it is
reasonable for such Party to withhold its consent from the entry
of any judgment or settlement with respect to such matter);
provided that no settlement of a Joint Defense Proceeding may be
effected without the consent of both parties. If there shall be
a settlement to which the Indemnifying Party consents or a final
judgment for the plaintiff in any Proceeding, the defense of
which the Indemnifying Party elected to assume, the Indemnifying
Party shall indemnify the Indemnified Person with respect to the
settlement or judgment.
9.4 PAYMENT OF INDEMNIFICATION DAMAGES. Any payment
pursuant to a claim for indemnification shall be made not later
than thirty (30) days after receipt by the Indemnifying Party of
written notice from the Indemnified Person stating the amount of
the claim, unless the claim is subject to a defense as provided
in Section 9.3, in which case payment shall be made not later
than thirty (30) days after the amount of the claim is finally
determined. Any payment required under this Section 9.4 shall
bear interest at the rate of eighteen percent (18%) per annum,
or, if less, the maximum rate permitted by applicable usury laws
from the date that the Indemnified Person incurred the Damages
for which indemnification is sought. Interest on any unpaid
amount shall be compounded monthly, computed on the basis of a
365-day year and shall be payable on demand. In addition, such
Party shall reimburse the other Party for any and all costs and
expenses of any nature or kind whatsoever (including, without
limitation, all attorneys' fees) incurred in seeking to collect
such Damages following repeated refusal by the owing Party to pay
such Damages and the non-existence of any good faith defense to
payment.
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9.5 LIMITATION ON INDEMNIFICATION. Anything to the
contrary contained in this Article IX notwithstanding, in no
event shall the aggregate liability of Seller under this Article
IX exceed the aggregate amounts received by Seller at the First
Closing, the Second Closing, and, if applicable, the Purchase
Option Closing.
ARTICLE X
GENERAL PROVISIONS
------------------
10.1 EXPENSES. Except as otherwise expressly provided in
this Agreement, each Party to this Agreement will bear its
respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents,
representatives, counsel and representatives, and accountants
unless such Party is entitled to indemnification therefore
pursuant to Article IX above.
10.2 CONFIDENTIALITY. Purchaser and Seller will maintain in
confidence, and will cause the directors, officers, employees,
agents, and advisors of Purchaser, Seller and the Company to
maintain in confidence, any written, oral, or other information
obtained in confidence from another party or from Purchaser,
Seller or the Company in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already
known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available
through no fault of such party, (b) the use of such information
is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such
information is required by or necessary in connection with legal
Proceedings.
10.3 PRESS RELEASES AND ANNOUNCEMENTS. No Party shall issue
any press release or make any public announcement relating to the
subject matter of this Agreement or the Contemplated Transactions
(other than those required by applicable Legal Requirements or by
Order), nor instruct or cause any other Person (including,
without limitation, the Company) to effect the same without the
express written consent of the other Party.
10.4 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will
be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of transmission), provided that a copy
is mailed by registered mail, return receipt requested, or (c)
when received by the addressee, if sent by a nationally
recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set
forth below (or to such other addresses and telecopier numbers as
a party may designate by notice to the other parties):
if to Seller:
________________
________________
________________
Telecopy: _____________
if to Purchaser:
Solico International, Inc.
000 Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: X. Xxxxxxx Sparks
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with a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
10.5 GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS. This
Agreement shall be deemed to have been made in, and shall be
construed in accordance with the laws of the State of Texas,
U.S.A. and its validity, construction, interpretation and legal
effect shall be governed by the laws of the State of Texas,
U.S.A. applicable to contracts entered into and performed
entirely therein. The Parties hereby agree that any dispute which
may arise between or among them in connection with this Agreement
shall be adjudicated before a court located in San Antonio,
Texas, and they hereby submit to the exclusive personal
jurisdiction of the courts of the State of Texas located in San
Antonio, Texas and of the federal district courts in or for
disputes arising in San Antonio, Texas with respect to any action
or legal Proceeding commenced by any Party. Each of the Parties
irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the
venue of any such Proceeding brought in such a court and any
claim that any such Proceeding brought in such a court has been
brought in an inconvenient forum. Each of the Parties hereby
consents to the service of process in any such action or legal
Proceeding on any party anywhere in the world.
10.6 FURTHER ASSURANCE. The Parties agree (a) to furnish
upon request to each other such further information, (b) to
execute and deliver to each other such other documents, and (c)
to do such other acts and things, all as the other Party may
reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
10.7 WAIVER. Except to the extent otherwise specified in
this Agreement, the rights and remedies of the Parties hereto are
cumulative and not alternative. Neither the failure nor any delay
by any Party in exercising any right, power, or privilege under
this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege, and
no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right,
power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be
discharged by one Party, in whole or in part, by a waiver or
renunciation of the claim or right u7nless in writing signed by
the other Party; (b) no waiver that may be given by a Party will
be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one Party will be deemed
to be a waiver of any obligation of such Party or of the right of
the Party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
10.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement and
the schedule and exhibits attached hereto, together with the
other Transaction Documents, supersedes all prior agreements
between the parties with respect to its subject matter and
constitutes (along with the other Transaction Documents) a
complete and exclusive statement of the terms of the agreement
between the Parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement
executed by the Party to be charged with the amendment.
10.9 SCHEDULES. The disclosures in the Seller Disclosure
Schedule and Purchaser Disclosure Schedule hereto, if any, each
of which are incorporated into this Agreement by this reference
and made a part hereof, relate only to the representations and
warranties in the Section of the Agreement to which they
expressly relate and not to any other representation or warranty
in this Agreement. Seller and
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Purchaser may revise or supplement the Seller Disclosure Schedule
or Purchaser Disclosure Schedule, respectively, or otherwise
amend or modify its representations and warranties hereunder, at
any time at or prior to the a Closing Date and the Purchase
Option Closing Date, if any, to reflect information that came
into existence after the Effective Date and that would have been
required to be disclosed on such schedules or reflected in such
representations or warranties if such information was in
existence as of the Effective Date; it being understood that
prior to each Closing, each Party, as its sole remedy for the
receipt of additional materially adverse information on the
Disclosure Schedule of the other Party, shall be entitled to
terminate this Agreement with the consequences specified in
Section 8.2 above; provided, however, that such disclosure shall
not cure any default or limit any liability resulting from a
Breach of any covenants contained in this Agreement.
10.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY
RIGHTS. Seller may not assign any of its rights under this
Agreement without the prior consent of the other Party.
Purchaser may assign its rights under this Agreement to any one
or more affiliates or related Persons of Purchaser. Subject to
the preceding sentences, this Agreement will apply to, be binding
in all respects upon, and inure to the benefit of the successors
and permitted assigns of the Parties. Nothing expressed or
referred to in this Agreement will be construed to give any
Person other than the Parties to this Agreement any legal or
equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and
exclusive benefit of the Parties to this Agreement and their
successors and assigns.
10.11 SEVERABILITY. If any provision of this
Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held
invalid or unenforceable.
10.12 SECTION HEADINGS; CONSTRUCTION. The headings
of Sections in this Agreement are provided for convenience only
and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding
Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
10.13 COUNTERPARTS. This Agreement may be executed
in one or more counterparts, each of which will be deemed to be
an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same
agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
SOLICO INTERNATIONAL, INC.,
a Texas corporation
By: /s/ X. XXXXXXX XXXXXX
----------------------------
Name: X. Xxxxxxx Sparks
---------------------------
Title: President
--------------------------
XXXXXXXX, XXXXXXXXX & COMPANY
By: /s/ C. XXXXX XXXXXXXX
-----------------------------
Name: C. Xxxxx Xxxxxxxx
---------------------------
Title: President
--------------------------
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