AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is dated as of September 20, 1995, by
and among, on the one hand, Xxxxxx Corporation, a Delaware corporation
("Xxxxxx"), Energy Industries, Inc., a Delaware corporation and a
wholly-owned subsidiary of Xxxxxx ("Xxxxxx Sub"), and Xxxxxx Energy
Industries, L.P., a Delaware limited partnership which is wholly-owned by
Xxxxxx ("Xxxxxx Partnership" and collectively with Xxxxxx and Xxxxxx Sub, the
"Seller"), and, on the other hand, Enterra Corporation, a Delaware
corporation ("Enterra"), and Enterra Compression Company, a Delaware
corporation and a wholly-owned subsidiary of Enterra ("Enterra Sub", and
collectively with Enterra, the "Purchasers").
WHEREAS, the Purchasers desire to purchase from the Seller, and the
Seller desires to sell to the Purchasers, the Assets (as defined herein) upon
the terms and conditions set forth herein;
WHEREAS, Purchasers desire to assume the Assumed Liabilities (as defined
herein) from the Seller upon the terms and conditions set forth herein; and
WHEREAS, to induce Purchasers to enter into this Agreement, a principal
stockholder of Xxxxxx has executed an agreement with Enterra pursuant to
which such stockholder has agreed to vote the shares of common stock of
Xxxxxx owned or controlled by such stockholder in accordance with the
recommendation of the Board of Directors of Xxxxxx with respect to the
approval by the stockholders of Xxxxxx of resolutions to be submitted to the
stockholders of Xxxxxx relating to this Agreement;
NOW, THEREFORE, in consideration of the respective representations,
warranties and covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified in this Agreement, all accounting terms used in this Agreement
shall be interpreted, all determinations as to accounting matters pursuant to
the terms of this Agreement shall be made and all financial statement matters
and certificates and reports as to financial or accounting matters required
to be delivered pursuant to the terms of this Agreement shall be prepared in
accordance with GAAP (except that interim financial statements may not
include footnotes) applied on a consistent basis.
SECTION 1.2 OTHER TERMS. As used herein, certain other words and terms
shall have the meanings given to them in EXHIBIT 1 attached hereto.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND
AGREEMENTS OF THE SELLER
Each Seller, jointly and severally, hereby makes to the Purchasers the
representations, warranties and agreements set forth in this ARTICLE II. The
Seller has delivered to the Purchasers a Disclosure Schedule to this
Agreement (the "DISCLOSURE SCHEDULE") on the date hereof. The Seller shall,
from time to time through the Closing Date, advise the Purchasers as to any
change, amendment or supplement to the Disclosure Schedule which is necessary
to reflect changes in the subject matter thereof occurring through the
Closing Date.
SECTION 2.1 ORGANIZATION AND QUALIFICATION. Each Seller is a corporation
or partnership, duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization. Each Seller has all requisite
power and authority to carry on its business as now being conducted and to
own, lease and operate its
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properties and assets as now owned, leased or operated. The nature of the
businesses and activities of Seller, as currently conducted, do not require
Seller to be qualified to do business in any foreign jurisdiction in which
they are not so qualified, except to the extent the failure so to comply
would not have a Material Adverse Effect. Xxxxxx owns all of the outstanding
capital stock of Xxxxxx Sub and directly or indirectly owns all of the
outstanding partnership interests of Xxxxxx Partnership.
SECTION 2.2 AUTHORITY RELATIVE TO THE AGREEMENT. Each Seller has full
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement, the performance of Seller's
obligations hereunder and the consummation of the transactions contemplated
hereby have been duly and validly authorized and approved by the Boards of
Directors of each Seller (or its general partner) and no further actions or
proceedings on the part of any Seller are necessary to authorize the
execution and delivery of this Agreement, the performance of Seller's
obligations hereunder or the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
each Seller, and this Agreement constitutes the legal, valid and binding
agreement of each Seller, enforceable against each Seller in accordance with
its terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to creditors' rights generally and
general equitable principles.
SECTION 2.3 NO VIOLATION. Except for any filings and waiting period
requirements under the HSR Act, the consent of Seller's bank lender,
preliminary and definitive proxy material filings of Xxxxxx with the
Securities and Exchange Commission, and approval of the stockholders of
Xxxxxx, no prior consent, approval or authorization of, or declaration,
filing or registration with, any party, domestic or foreign, is necessary in
connection with the execution, delivery and performance of this Agreement by
the Seller, the failure of which to obtain would have a Material Adverse
Effect. Neither the execution, delivery nor performance of this Agreement in
its entirety, nor the consummation of all of the transactions contemplated
hereby, will (i) violate any material Governmental Requirement applicable to
the Seller or any of the Assets, (ii) be in conflict with, result in a breach
or termination of any provision of, cause the acceleration of the maturity of
any debt or obligation pursuant to, constitute a default under, or result in
the creation of a Lien upon any property or assets of Seller pursuant to any
terms, conditions or provisions of any material Governmental Authorization,
lease, license, permit, Environmental Permit, Contract or other agreement or
instrument to or of which any Seller is a party or a beneficiary (provided,
however, that the parties acknowledge that consents to assignment of the
above items will be delivered by Seller to Purchaser on or prior to the
Closing Date and not on the date of this Agreement), (iii) give rise to any
Lien on any of the Assets, or (iv) conflict with or violate any provision of
the charter, Bylaws, limited partnership agreement or other organizational
documents of any Seller or resolutions of the Board of Directors of any
Seller (or any general partner thereof). There are no Proceedings pending, or
to the Seller's knowledge threatened against the Seller, at law or in equity
or before or by any Governmental Authority which may result in liability to
the Purchasers upon the consummation of the transactions contemplated hereby
or which would prevent or delay such consummation.
SECTION 2.4 FINANCIAL STATEMENTS.
(a) The Seller has provided the Purchasers with true and complete
copies of the combined balance sheets of the Business as of May 31, 1995 (the
"BALANCE SHEET DATE" and the combined balance sheet as of such date, the "MAY
BALANCE SHEET") and September 30, 1994 and the related income statements for
the fiscal year ended September 30, 1994 and the eight (8)-month period ended
May 31, 1995, and the Seller will provide the Purchasers with balance sheets
and the related statements of income for the Business for each monthly period
(unaudited) ending after the Balance Sheet Date and prior to the Closing Date
(all of the foregoing statements of financial position and the related
statements of income of the Business are collectively referred to as the
"SELLER'S FINANCIAL STATEMENTS").
(b) Seller's Financial Statements, which are, in the case of those
financial statements existing on the date of this Agreement, attached hereto
as SCHEDULE 2.4(b) (including without limitation all notes, schedules and
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supplemental data contained in or annexed to such statements), are or will
be, as the case may be, accurate, complete and in accordance with the books
and records of Seller and present, or will present, as the case may be,
fairly in all material respects, the combined financial position and assets
and liabilities of the Business as their respective dates and the results of
its combined operations for the periods then ended, in conformity with GAAP
(subject, in the case of the interim financial statements, to normal year-end
adjustments, the effect of which, individually or in the aggregate, will not
be materially adverse, and the fact that they do not or will not, as the case
may be, contain all of the footnote disclosures required by GAAP, except as
otherwise noted therein).
SECTION 2.5 ACCOUNTING RECORDS. The books of account and other
accounting records of the Business, all of which have been or will be made
available to the Purchasers, are complete and correct subject to normal
year-end adjustments, the effect of which, individually or in the aggregate,
will not be materially adverse, and have been maintained in accordance with
Seller's normal business practices, including, but not limited to, the
maintenance of an adequate system of internal controls.
SECTION 2.6 ASSETS ACQUIRED. Upon consummation of the transactions
contemplated by this Agreement, Enterra Sub shall have acquired from Seller
all of the assets (other than Excluded Assets, as defined herein) being used
(or held for use) to generate the operating results reflected in Seller's
Financial Statements. Since the Balance Sheet Date there has been no change
in the inventory or revenue producing equipment of the Business that
generated the revenues reflected in the Seller's Financial Statements, other
than changes in the ordinary course of the Business, consistent with the past
practice, which are not material in the aggregate.
SECTION 2.7 ABSENCE OF UNDISCLOSED LIABILITIES. Neither any Seller nor
Energy Industries Financial Services, Inc. is liable for or subject to any
liability in connection with the Business except for:
(a) those Liabilities disclosed on the May Balance Sheet and not
heretofore paid or discharged;
(b) those Liabilities arising in the ordinary course of the Business
consistent with past practice under any Contract, commitment or arrangement
disclosed on SCHEDULE 2.11 of the Disclosure Schedule or not required to be
disclosed thereon because of the term or amount involved or otherwise; and
(c) those Liabilities incurred in the ordinary course of the Business,
consistent with past practice, and either not required to be shown on the May
Balance Sheet or arising since the Balance Sheet Date, which liabilities and
obligations individually and in the aggregate are of a character and
magnitude consistent with its past practice.
SECTION 2.8 ABSENCE OF CERTAIN CHANGES. Except as and to the extent
set forth on SCHEDULE 2.8, since May 31, 1995 (a) no Seller has in connection
with the Business (i) suffered, individually or in the aggregate, any
Material Adverse Effect or (ii) conducted the Business other than in the
ordinary course, consistent with past practice, and (b) neither Xxxxxx Sub
nor Xxxxxx Partnership has declared, set aside or paid any dividend, or made
or agreed to make any other distribution or payment in respect of its shares
nor has it redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any of its shares.
SECTION 2.9 TITLE TO PROPERTIES: ENCUMBRANCES. SCHEDULE 2.9 of the
Disclosure Schedule sets forth a true and complete description of all real
property used or held for use in connection with the Business. Seller has,
except for Liens which will be terminated in their entirety on or before the
Closing Date, and at the Closing will convey to Enterra Sub, unencumbered,
good, legal, and indefeasible title to all of the Assets, except for
Permitted Liens and those Assets disposed of for fair market value in the
ordinary course of the Business, consistent with past practice, since the
Balance Sheet Date and otherwise in accordance with this Agreement.
SECTION 2.10 LITIGATION. Except as set forth on SCHEDULE 2.10 of the
Disclosure Schedule, there are no actions, suits, claims or other proceedings
pending or, to the best knowledge of the Seller, threatened against
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any Seller or involving any of its Assets, at law or in equity or before or
by any foreign, federal, state, municipal, or other governmental court,
department, commission, board, bureau, agency, Governmental Authority, or
other instrumentality or person or any board of arbitration or similar entity
(a "PROCEEDING"). The Seller will promptly notify the Purchasers of any
material Proceeding which relates to the Business initiated by or against
Seller prior to the Closing Date.
SECTION 2.11 CONTRACTS. Except as listed and described on SCHEDULE 2.11
of the Disclosure Schedule, no Seller is, in connection with the Business, a
party to or otherwise bound by any written or oral:
(a) Contract or commitment with any present or former stockholder,
director, officer, partner, employee or consultant or for the employment of
any person, including, without limitation, any consultant;
(b) Contract or commitment for the purchase of, or payment for,
supplies or products, or for the performance of services by a third party,
involving in any one case $50,000 or more or in excess of $3,000,000 in the
aggregate;
(c) Contract or commitment to sell or supply products or to perform
services outside the ordinary course of business, consistent with past
practice, involving in any one case $50,000 or more or in excess of
$3,000,000 in the aggregate;
(d) Contract or commitment not otherwise covered by this SECTION 2.11
and continuing over a period of more than six (6) months from the date hereof
and exceeding $100,000 in value, or in excess of $8,000,000 in the aggregate;
(e) Any Equipment Lease, or any other lease under which Seller is
either lessor or lessee, involving in any one case $100,000 or more or in
excess of $4,000,000 in the aggregate;
(f) Contract or commitment for any capital expenditure involving in any
one case $200,000 or more or in excess of $500,000 in the aggregate;
(g) Master service agreements which (i) (a) are not a standard form
contract used in the gas compression industry or (b) contain amendments to
the indemnification provisions in standard form agreements used in the gas
compression industry, and (ii) continue over a period of more than six (6)
months from the date hereof and exceeding $100,000 in value, or in excess of
$14,000,000 in the aggregate; or
(h) Contract, commitment or arrangement with any other Seller or any
Affiliate of any Seller.
Except as may be disclosed on SCHEDULE 2.11 of the Disclosure Schedule, each
of the Contracts, commitments, arrangements, leases and other instruments,
documents and undertakings listed on such Schedule or not required to be
listed thereon because of the term or amount involved or otherwise, is valid
and enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and general equitable principles.
The Seller, and to Seller's knowledge, other parties thereto, are in material
compliance with the provisions thereof. The Seller is not, and to Seller's
knowledge, other parties thereto are not, in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained therein, and, to Seller's knowledge, no event has occurred which
with or without the giving of notice or lapse of time, or both, would
constitute a default thereunder.
SECTION 2.12 COMPLIANCE WITH LAWS. Except as set forth on SCHEDULE 2.12
of the Disclosure Schedule and except for such as would not in the aggregate
have a Material Adverse Effect, to the knowledge of the Seller, no Seller is
in default with respect to or in violation of (i) any judgment, order, writ,
injunction or decree of any court or (ii) any legal requirement of any
Governmental Authority. The consummation of the transactions contemplated by
this Agreement will not constitute such a default or violation as to the
Seller. Seller has all
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Governmental Authorizations required to conduct the Business as now being
conducted. All required filings with respect to such Governmental
Authorizations have been timely made and all required applications for
renewal thereof have been timely filed. All such Governmental Authorizations
are in full force and effect and there are no proceedings pending or
threatened that seek the revocation, cancellation, suspension, or adverse
modification thereof.
SECTION 2.13 INSURANCE. SCHEDULE 2.13 of the Disclosure Schedule sets
forth all material policies of property, fire and casualty, product
liability, workers' compensation, liability and other forms of insurance
owned or held by Seller. Such description identifies the issuer of each such
policy, the amount of coverage available and outstanding under each such
policy, and whether each such policy is a "claims made" or an "occurrence"
policy. True and complete copies of such policies have been made available
to the Purchasers for review.
SECTION 2.14 TRADEMARKS. SCHEDULE 2.14 of the Disclosure Schedule sets
forth a list of each trademark, trademark registration, trademark
registration application and trade name which any Seller owns or uses which
is material to the operation of the Business and with respect to which they
are the licensor or licensee.
SECTION 2.15 ENVIRONMENTAL MATTERS. In addition to the representations
and warranties in SECTION 2.12 hereof, and not in limitation thereof, except
as disclosed on SCHEDULE 2.15, (a) no releases of Hazardous Materials have
occurred and no conditions have existed from November 9, 1993 until the date
of this Agreement, or the Closing Date, as applicable, at or from any
property currently or previously owned or leased by Seller during the period
such property was owned or leased by Seller, which would require (i) release
reporting to a Governmental Authority or remediation under applicable
Environmental Law and (ii) result in a Material Adverse Effect; (b) there are
no pending, or to the actual knowledge of Seller, threatened Environmental
Claims against the Seller in connection with the Business including, without
limitation, Environmental Claims brought pursuant to CERCLA or comparable
state statutes with respect to the disposal, or arrangement for disposal or
treatment (with a transporter or otherwise), of Hazardous Materials at sites
or facilities owned by Seller or third-parties; and (c) to Seller's actual
knowledge and during the period from November 9, 1993 through the date
hereof, or the Closing Date, as applicable, there are and were no leaking
underground storage tanks currently or previously owned or operated by Seller
in connection with the Business located at any property currently or
previously owned or operated by any Seller in connection with the Business
which such leak occurred during the period such property was owned or leased
by Seller.
SECTION 2.16 EMPLOYEE SEVERANCE/CONTINUATION AGREEMENTS. SCHEDULE 2.16
of the Disclosure Schedule sets forth a complete list of all employees of the
Business that are subject to any employment, retention and/or severance
agreement under which any Seller is obligated. Seller has furnished
Purchasers with the forms (sufficient for determining costs) of such
agreements and of any other plans or arrangements under which any Seller is
obligated to provide any retention compensation or severance benefits to any
Xxxxxx Employee.
SECTION 2.17 COMPLETENESS OF DISCLOSURE. No representation or warranty
by any Seller contained in this Agreement, and no representation, warranty or
statement contained in any list, certificate, Schedule or other instrument,
document, agreement or writing furnished or to be furnished to, or made with,
the Purchasers pursuant hereto or in connection with the negotiation,
execution or performance hereof, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make any statement herein or therein not misleading.
SECTION 2.18 NO OTHER REPRESENTATIONS. The Seller is not making any
representations or warranties, express or implied, of any nature whatsoever
except as specifically set forth in this Agreement.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby makes, jointly and severally, to the Seller the
representations and warranties set forth in this ARTICLE III.
SECTION 3.1 ORGANIZATION AND AUTHORITY. Each Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware. Each Purchaser has full power and authority to execute and
deliver this Agreement. Enterra directly owns all of the outstanding capital
stock of Enterra Sub.
SECTION 3.2 AUTHORITY RELATIVE TO AGREEMENT. The execution, delivery and
performance of this Agreement have been duly and validly authorized and
approved by the Board of Directors of each Purchaser and no further actions
on the part of the Purchasers or Xxxxxxxxxxx International Incorporated are
necessary to the execution, delivery and performance of this Agreement. This
Agreement has been duly executed and delivered by the Purchasers and is a
valid, legally binding and enforceable obligation of the Purchasers, subject
to the effect of bankruptcy, insolvency, reorganization, moratorium, or other
similar laws relating to creditors' rights generally and general equitable
principles.
SECTION 3.3 NO VIOLATION. Except for any filing and waiting period
requirements under the HSR Act, no prior consent, approval or authorization
of, or declaration, filing or registration with, any party, domestic or
foreign (including, without limitation, Xxxxxxxxxxx International
Incorporated), is necessary in connection with the execution, delivery and
performance of this Agreement by the Purchasers, the failure of which to
obtain would have a material adverse effect on Purchasers. Neither the
execution, delivery nor performance of this Agreement in its entirety, nor
the consummation of all of the transactions contemplated hereby, will (i)
violate any material Governmental Requirement applicable to the Purchasers,
or (ii) conflict with or violate any provision of the Certificate of
Incorporation, Bylaws or resolutions of the Boards of Directors of either
Purchaser. There are no Proceedings pending or, to the Purchasers' knowledge,
threatened against the Purchasers, at law or in equity or before or by any
Governmental Authority which may result in liability to any Seller upon the
consummation of the transactions contemplated hereby or which would prevent
or delay such consummation.
SECTION 3.4 FINANCING. The Purchasers will have on the Closing Date
sufficient funds available to permit the Purchasers to pay the total Purchase
Price.
SECTION 3.5 INDEPENDENT INVESTIGATION. The Purchasers have been provided
an opportunity to review all documents and information as they have deemed
necessary or appropriate concerning the Business and such other matters as
they have deemed necessary or appropriate in making their own financial,
business and legal evaluations of the Business and the transactions
contemplated hereby, and the Purchasers have independently and based on such
documents, information and evaluations, as they have deemed appropriate, made
their own independent appraisal and decision with respect to (i) the
transactions contemplated hereby, and (ii) the properties, assets, business,
financial value and condition of the Business and, except for the specific
representations and warranties of Seller made in ARTICLE II hereof,
Purchasers are acquiring the Assets "As Is".
SECTION 3.6 COMPLETENESS OF DISCLOSURE. No representation or warranty
by any Purchaser contained in this Agreement, and no representation, warranty
or statement contained in any list, certificate, Schedule or other
instrument, document, agreement or writing furnished or to be furnished to,
or made with, the Seller pursuant hereto or in connection with the
negotiation, execution or performance hereof, contains or will contain any
untrue statement of a material fact or omits or will omit to state any
material fact necessary to make any statement herein or therein not
misleading.
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SECTION 3.7 WARN. Based on the list of Continuing Employees which
Purchasers are to deliver to Seller pursuant to SECTION 11.1 hereof and on
which Seller intends to rely in fulfilling its obligations under the WARN
Act, the Seller's termination of the Xxxxxx Employees who are not Continuing
Employees in accordance with SECTION 11.1(b) will not violate, conflict with
or breach the WARN Act or result in any liability to Seller or its Affiliates
arising out of the WARN Act.
SECTION 3.8 NO OTHER REPRESENTATIONS. The Purchasers are not making any
representations or warranties, express or implied, of any nature whatsoever
except as specifically set forth in this Agreement.
ARTICLE IV.
CONVEYANCE TO PURCHASER
SECTION 4.1 CONVEYANCE TO PURCHASER. Subject to the terms and
conditions of this Agreement, the Seller will convey, transfer and deliver to
Enterra Sub on the Closing Date all of the assets, properties and rights of,
or used or held for use in connection with, the Business, its goodwill and
the Business as a going concern (collectively, the "ASSETS"). The Assets to
be conveyed, transferred and delivered shall include all those reflected on
the May Balance Sheet with only such changes therein as shall have occurred
between the Balance Sheet Date and the Closing Date in the ordinary course of
business consistent with past practice. Without limitation of the foregoing
provisions, the Assets shall include, without limitation, all real property,
buildings, structures, leasehold rights and improvements, machinery,
equipment, furniture, fixtures, supplies, vehicles, goodwill, cash,
Inventories, accounts and notes receivable including STL Unit receivables and
employee receivables (other than any such accounts receivable due from any
Affiliate of Seller), contract rights and claims relating thereto, stock,
securities, licenses and applications therefor, franchises, claims, deposits,
all rights and interests in, to and under any patents, patent applications,
trademarks, trademark registrations and applications therefor, copyrights,
trade secrets, intellectual property, ideas and other know-how, shop rights,
permits and other rights and privileges, all shares of capital stock of
Energy Industries Financial Services, Inc., and all records, sales data, and
customer and supplier lists of the Business or used or held for use in
connection therewith. Notwithstanding anything in this SECTION 4.1 that may
be construed to the contrary, the Assets shall not include accounts
receivable due from any Affiliate of Seller, the corporate seal, certificate
of incorporation or bylaws of any Seller, the partnership agreement or
certificate of limited partnership of Xxxxxx Partnership, minute books or
other records having to do with the corporate or partnership organization of
any Seller, or tax returns and schedules and work papers relating thereto;
any rights to or under any insurance policies or any claims thereunder;
intercompany receivables; books of accounts; the rights that will accrue to
the Seller under this Agreement; any rights to Seller's claims for any Tax
refunds; the tax records of any Seller; the name "Xxxxxx" or any assets of
any Seller not used or held for use in connection with the Business
(collectively, the "EXCLUDED ASSETS"). Notwithstanding any other provisions
in this Agreement which could be construed to the contrary, Seller is not
selling, and Purchasers are not purchasing, any assets owned by Xxxxxx
Protein, Inc., Cimarron Gas Holding Company or their respective subsidiaries
which are not used or held for use in the Business.
SECTION 4.2 CONSIDERATION FOR ASSETS.
(a) At the Closing, the Purchasers will purchase the Assets from the
Seller, upon and subject to the terms and conditions of this Agreement and in
reliance upon the representations, warranties, covenants and agreements of
the Seller contained herein, and will pay the Seller, as consideration for
the Assets, the sum of One Hundred and Thirty Million Dollars ($130,000,000)
(the "PURCHASE PRICE"), increased or decreased by the amount of the net asset
value adjustment as set forth in SECTION 4.5(a). The allocation of the
Purchase Price (and the liabilities to be assumed by the Purchasers at the
Closing pursuant to SECTION 4.2(b) hereof) among the Assets shall be agreed
upon by the parties. Once the allocation has been determined, the Purchasers
and the Seller shall jointly prepare IRS Form 8594 pursuant to Temporary
Treasury Regulations Section 1.1060-1T to report the allocation of the
Purchase Price. The Seller and the Purchasers each hereby covenant and agree
that they will not take a position on any tax return before any Governmental
Authority or in any Proceeding that is
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in any way inconsistent with such allocation and will cooperate with each
other in good faith to resolve any disagreement or dispute that may arise
between them with respect thereto.
(b) As further consideration for the Assets, at the Closing, Enterra
Sub will deliver to the Seller a written undertaking in accordance with
SECTION 4.4(b) hereof, whereby Enterra Sub will assume the following
(collectively, the "ASSUMED LIABILITIES"):
(i) all of Seller's liabilities and obligations of the Business
on the May Balance Sheet which are also liabilities and obligations
described in the example attached as EXHIBIT 2, but only if and to the
extent that the same are accrued or reserved for on the May Balance
Sheet and have not been paid or discharged prior to or at the Closing
(all of which shall be included in the calculation of net asset value
pursuant to SECTION 4.5);
(ii) all of Seller's liabilities and obligations of the Business
that have arisen in the ordinary course of the Business, consistent
with past practice, between the Balance Sheet Date and the Closing Date
that would be disclosed on a balance sheet prepared in accordance with
GAAP and which are also liabilities and obligations of the type described
in the example attached as EXHIBIT 2, but only if and to the extent that
the same have not been paid or discharged prior to or at the Closing (all
of which shall be included in the calculation of net asset value pursuant
to SECTION 4.5);
(iii) all liabilities and obligations of the Seller in respect
of the Contracts, commitments and arrangements, which Contracts,
commitments and arrangements are specifically identified in any list
called for by paragraphs (b) through (g) of SECTION 2.11 as it may be
supplemented or updated by Seller with Contracts, commitments and
arrangements entered into in the ordinary course of business prior to
the Closing Date consistent with SECTIONS 5.1 or 5.2, or are not
required to be identified on any such list because of the term or
amount involved or the descriptive limitations set forth in SECTION 2.11,
except that the Purchasers shall not assume any:
(A) liabilities or obligations of the aforesaid character
existing as of the Balance Sheet Date and which under GAAP are or
should be accrued or reserved for on a balance sheet or the notes
thereto as a liability or obligation, if and to the extent that
the same were not accrued or reserved for on the May Balance Sheet;
or
(B) liabilities or obligations of the character described
in paragraphs (b) through (g) of SECTION 2.11 existing at the date
of this Agreement, except for those items which are specifically
identified on SCHEDULE 2.11(b) through SCHEDULE 2.11(g) as they
may be supplemented or updated by Seller with Contracts, commitments
or arrangements entered into in the ordinary course of business
prior to the Closing Date, consistent with SECTIONS 5.1 and 5.2; or
(C) liabilities or obligations arising out of any breach by
any Seller of any item of the character referred to in this
SECTION 4.2(b)(iii), including, without limitation, liabilities or
obligations arising out of any Seller's failure to perform any
Contract, commitment or arrangement in accordance with its terms
prior to the Closing; or
(D) any liabilities or obligations arising out of Seller's
credit facility with Texas Commerce Bank; and
(iv) liabilities and obligations of the Seller in respect of
warranty claims by customers relating to the Business;
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In determining the liabilities and obligations of the Business to be
assumed by Enterra Sub pursuant to SECTION 4.2(b)(i) and (ii) hereof, to the
extent that there is a conflict between the methodology set forth in the
example attached as EXHIBIT 2 and GAAP, then the methodology set forth in the
example attached as EXHIBIT 2 shall control.
(c) Other than the Assumed Liabilities, the Purchasers shall not assume
or be responsible for any liability of any Seller (collectively, the
"EXCLUDED LIABILITIES"). (The parties acknowledge that it is possible that
the Purchasers may, in the operation of the Business after the Closing Date,
incur liability which may result in a Loss, other than as a result of
contractual assumption of liability, and that such Loss, if any, shall be
governed in accordance with the terms and provisions of ARTICLE X). The
obligations of the Purchasers under SECTION 4.2(b) are subject to whatever
rights the Purchasers may have under this Agreement for a breach by any
Seller of any representation, warranty, covenant or agreement contained in
this Agreement. In addition to the foregoing, in no event shall the
Purchasers assume or incur any liability or obligation under SECTION 4.2(b)
or otherwise (i) in respect of any Tax payable with respect to the sales,
assets or income of the Seller, (ii) based upon Seller's employment of
persons at any time except for the reimbursement arrangement set forth in
SECTION 11.1(b), or (iii) with respect to each item included as a liability
in the Net Asset Value calculation provided for in SECTION 4.5, any liability
in excess of the amount relating to such item included in such calculation
(and which is not otherwise superseded by SECTION 12.2).
(d) The Purchasers shall pay all sales, use, documentary and transfer
Taxes, if any, due as a result of the sale of the Assets and other
transactions undertaken pursuant to this Agreement.
SECTION 4.3 CLOSING. The closing of the purchase and sale (the
"CLOSING") provided for in this Agreement shall take place at the offices of
Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P., Texas Commerce Tower, Xxxxxxx,
Xxxxx 00000 at 10:00 a.m. on the date which is the later of forty-five (45)
days after the date hereof or five (5) days following satisfaction or waiver
of all conditions set forth in SECTIONS 7.1(a) AND (c) and 7.2(d). Subject to
the provisions of ARTICLE VIII hereof, failure to consummate the purchase and
sale provided for in this Agreement on the date and time and at the place
determined pursuant to this SECTION 4.3 shall not result in the termination
of this Agreement and shall not relieve any parties to this Agreement of any
obligation hereunder. For purposes of this Agreement, the date on which the
Closing occurs is the "CLOSING DATE".
SECTION 4.4 CLOSING DELIVERIES.
(a) At the Closing, the Seller shall deliver to the Purchasers such
deeds, bills of sale, endorsements, assignments and other good and sufficient
instruments of conveyance, transfer and assignment, in form and substance
reasonably satisfactory to counsel for the Purchasers, as shall be effective
to vest in the Enterra Sub good and indefeasible title to the Assets, subject
only to Permitted Liens; deliver to Enterra Sub all of the Assets, including,
without limitation, leases, contracts and commitments, books and records and
other data relating to the Business and deliver to the Purchasers such other
documents as may be required by this Agreement.
(b) At the Closing, the Purchasers shall cause to be transferred to the
Seller in immediately available funds the Purchase Price, increased or
decreased, as the case may be, based on Xxxxxx'x calculation of Net Asset
Value on the date of the most recently delivered balance sheet in Seller's
Financial Statements to the extent that such Net Asset Value is greater than,
or less than, as the case may be, One Hundred Six Million, Six Hundred
Twenty-Three Thousand, Nine Hundred and Sixty-Eight Dollars ($106,623,968)
("INTERIM NET ASSET VALUE ADJUSTMENT"), subject to adjustment pursuant to the
Footnote to EXHIBIT 2 and also pursuant to SECTION 4.5. Xxxxxx'x calculation
shall utilize the same methods and criteria employed by Xxxxxx in connection
with the preparation of the May Balance Sheet and the example set forth in
EXHIBIT 2, to the extent such methods and criteria are consistent with GAAP.
In making such calculation, to the extent that there is a conflict between
the methodology set forth in the example attached as EXHIBIT 2 and GAAP, then
the methodology set forth in the example attached as EXHIBIT 2 shall control.
At the Closing, the Purchasers shall also deliver to the Seller such
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instruments, in form and substance reasonably satisfactory to counsel for the
Seller, as shall be necessary for Enterra Sub to assume the Assumed
Liabilities; and deliver to the Seller such other documents as may be
required by this Agreement.
SECTION 4.5 NET ASSET VALUE ADJUSTMENT.
(a) As soon as reasonably practical following (but not more than ninety
(90) days after) the Closing Date, Enterra shall prepare and deliver to
Xxxxxx a statement of Assets and Assumed Liabilities as of the Closing Date
(the "STATEMENT OF NET ASSETS"). The Statement of Net Assets shall be
prepared using the same methods and criteria employed by the Seller in
connection with the preparation of the May Balance Sheet and the example set
forth in EXHIBIT 2, to the extent such methods and criteria are consistent
with GAAP. In making such calculation, to the extent that there is a
conflict between the methodology set forth in the example attached as EXHIBIT 2
and GAAP, then the methodology set forth in the example attached as EXHIBIT 2
shall control. All expenses incurred in connection with the preparation of
the Statement of Net Assets shall be the responsibility of the Purchasers.
The Statement of Net Assets shall be accompanied by Enterra's calculation
based thereon of the amount by which the Assets exceed the Assumed
Liabilities (the amount of such excess, the "NET ASSET VALUE", and
Purchasers' calculation thereof, "PURCHASERS' CALCULATION OF NET ASSET
VALUE"). Xxxxxx shall have the opportunity, but not the obligation, to
participate in Enterra's preparation of the Purchasers' Calculation of Net
Asset Value. Within ten (10) days following the delivery of the Purchasers'
Calculation of Net Asset Value, Xxxxxx shall notify Enterra whether it agrees
or disagrees with the determination of the Purchasers' Calculation of Net
Asset Value, and, if Xxxxxx disagrees, Enterra and Xxxxxx shall, on a good
faith basis, seek to reconcile their disagreement regarding the Purchasers'
Calculation of Net Asset Value and Xxxxxx'x calculation of Net Asset Value
("XXXXXX'X CALCULATION OF NET ASSET VALUE"). The calculation of Net Asset
Value agreed upon by the Purchasers and Xxxxxx shall be referred to herein as
the "AGREED UPON NET ASSET VALUE". Xxxxxx and Enterra shall each have access
to the other party's books, records and other information and documents
supporting such other party's calculation of Net Asset Value.
(b) If, after the review set forth in SECTION 4.5(a), Enterra and
Xxxxxx reconcile Xxxxxx'x Calculation of Net Asset Value with the Purchasers'
Calculation of Net Asset Value, then within three (3) business days, as the
case may be: (i) the Seller shall pay the Purchasers by wire transfer of
immediately available funds the amount by which the Interim Net Asset Value
Adjustment exceeds the Agreed Upon Net Asset Value, or (ii) the Purchasers
shall pay to the Seller by wire transfer of immediately available funds the
amount by which the Agreed Upon Net Asset Value exceeds the Interim Net Asset
Value Adjustment. Any such amounts paid pursuant to this SECTION 4.5(b) shall
be considered an increase or decrease, as the case may be, to the Purchase
Price.
(c) If, after the review set forth in SECTION 4.5(a), Enterra and
Xxxxxx are unable to reconcile Xxxxxx'x Calculation of Net Asset Value with
the Purchasers' Calculation of Net Asset Value, as soon as practical, and in
any event within ten (10) days, the calculation of Net Asset Value and the
balance owing to the Purchasers or the Seller hereunder, as the case may be,
shall be determined jointly by Coopers & Xxxxxxx, L.L.P., Houston, Texas and
another independent, Big Six accounting firm to be named by Enterra. The Net
Asset Value as determined jointly by such accounting firms shall be referred
to herein as the "ACCOUNTANTS' CALCULATION OF NET ASSET VALUE". In making
such determination, to the extent that there is a conflict between the
methodology set forth in the example attached as EXHIBIT 2 and GAAP, then the
methodology set forth in the example attached as EXHIBIT 2 shall control. If
Coopers & Xxxxxxx, L.L.P. and such accounting firm named by Enterra shall not
be able to agree on the Net Asset Value and the balance owing to the
Purchasers or the Seller hereunder, as the case may be, within thirty (30)
days, then such accounting firms shall select a third nationally recognized
accounting firm which shall determine the Net Asset Value and the balance
owing to the Purchasers or the Seller hereunder, as the case may be, and the
determination of such third accounting firm shall be final and binding on the
parties hereto. The fees and expenses of such accounting firms shall be borne
equally by Xxxxxx and Enterra. The parties hereto agree to cooperate fully
with such accounting firms and furnish such firms with such information as
they may require to make such determination.
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(d) After the determination of the Net Asset Value and the balance
owing to the Purchasers or the Seller hereunder, as the case may be, by the
accounting firm or firms provided for in SECTION 4.5(c), within three (3)
days after such determination: (i) the Seller shall pay to the Purchasers by
wire transfer of immediately available funds the amount by which the Interim
Net Asset Value Adjustment exceeds the Accountants' Calculation of Net Asset
Value, or (ii) the Purchasers shall pay to the Seller by wire transfer of
immediately available funds the amount by which the Accountants' Calculation
of Net Asset Value exceeds the Interim Asset Value Adjustment. Any such
excess amounts paid pursuant to this SECTION 4.5(d) shall be considered an
increase or decrease, as the case may be, to the Purchase Price.
(e) Nothing in this SECTION 4.5 shall preclude any party from
exercising, or shall adversely affect any right or remedy available to it
hereunder or limit in any respect the exercise of, any right or remedy
available to it hereunder for misrepresentation or breach of warranty
hereunder, but neither the Purchasers nor any Seller shall have the right to
dispute the Net Asset Value or any element of the calculation thereof once it
has been finally determined in accordance with SECTION 4.5(a) or (c) hereof.
(f) An example of the calculations referred to in this SECTION 4.5 is
attached hereto on EXHIBIT 2.
SECTION 4.6 ASSETS OF AFFILIATES. To the extent any assets, properties
or rights (other than the Excluded Assets), wherever located, used or held
for use in connection with the Business, are owned, including, without
limitation, assets, properties and rights (a) previously used or held for use
in connection with the Business and (b) still owned by any Affiliate of any
Seller, they are included within the term "ASSETS", such Affiliate is deemed
to be included within the term "SELLER", and the Seller shall cause each such
Affiliate, at the Closing, to convey such Assets to Enterra Sub, or to a
Seller for conveyance to Enterra Sub, in accordance with the provisions
hereof.
SECTION 4.7 ASSIGNED CONTRACTS. To the extent that any Seller's rights
under any Contract included in the Assets, or under any other Asset to be
assigned to Enterra Sub hereunder, may not be assigned without the consent of
another person which has not been obtained by a Seller prior to the Closing,
neither this Agreement nor any instruments of transfer shall constitute an
agreement to assign the same if an attempted assignment would constitute a
breach thereof or be unlawful. If any such consent has not been obtained or
if any attempted assignment would be ineffective or would impair Enterra
Sub's rights under the instrument in question so that Enterra Sub would not
in effect acquire the benefit of all such rights, then the Seller, to the
maximum extent permitted by law and the instrument, shall act as Enterra
Sub's agent in order to obtain for Enterra Sub the benefits thereunder and
shall cooperate, to the maximum extent permitted by law and the instrument,
with Enterra Sub in any other reasonable arrangement designed to provide such
benefits to Enterra Sub (including, without limitation, by entering into an
equivalent arrangement).
ARTICLE V.
OBLIGATIONS OF THE SELLER PENDING CLOSING
During the period commencing on the date of this Agreement through the
Closing Date, the Seller hereby covenants and agrees to comply with the
covenants and agreements contained in this ARTICLE V, to wit:
SECTION 5.1 AFFIRMATIVE COVENANTS OF THE SELLER. Prior to the Closing
Date, each Seller shall except as specifically contemplated by this Agreement:
(a) operate and conduct the Business only in the ordinary course,
consistent with past practice, including, without limitation, the
continuation of existing insurance coverages;
(b) preserve intact Xxxxxx Sub's and Xxxxxx Partnership's existence,
business organization, Business, Assets and Governmental Authorizations;
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(c) promptly notify the Purchasers upon obtaining knowledge of any
material default or event of default under any of the Contracts and promptly
notify and provide copies to the Purchasers of any material written
communications concerning such default; and
(d) comply with all material Governmental Requirements applicable to
Seller and the conduct of the Business except where the failure to do so
would not have a Material Adverse Effect.
SECTION 5.2 NEGATIVE COVENANTS OF XXXXXX SUB AND XXXXXX PARTNERSHIP.
Except with the prior written consent of the Purchasers or as otherwise
specifically permitted by this Agreement, Xxxxxx Sub and Xxxxxx Partnership
shall not, from the date of this Agreement to the Closing Date:
(a) make any amendment to its, as applicable, Certificate of
Incorporation, Bylaws, certificate of limited partnership or partnership
agreement;
(b) make any change in accounting methods except as may be required by
applicable law or GAAP and after written notice to the Purchasers;
(c) contract to create any obligation or Liability except in the
ordinary course of the Business, consistent with past practice;
(d) contract to create any mortgage, pledge, lien, security interest or
encumbrance, restriction, or charge of any kind (other than Permitted Liens);
(e) cancel any debts, waive any claims or rights of value or sell,
transfer, or otherwise dispose of any of its properties or assets, except in
the ordinary course of the Business, consistent with past practice;
(f) sell any real estate owned as of the date of this Agreement or
acquired thereafter except for fair market value in the ordinary course of
the Business, consistent with past practice;
(g) except in the ordinary course of the Business, consistent with past
practice, or as agreed by Purchasers and Seller, grant any increase in
compensation or pay or agree to pay or accrue any bonus or like benefit to or
for the credit of any director, officer, employee or other person or enter
into any employment, consulting or severance agreement or other agreement
with any director, officer, employee, or other person or adopt, amend or
terminate any benefit plan or change or modify the period of vesting or
retirement age for any participant of such a plan;
(h) acquire the capital stock or other equity securities or interest of
any person;
(i) make any capital expenditure or a series of expenditures of a
similar nature in excess of $500,000 in the aggregate;
(j) except for negotiations and discussions between the parties hereto
relating to the transactions contemplated by this Agreement or as otherwise
permitted hereunder, enter into any transaction, or enter into, modify or
amend any Contract or commitment, other than in the ordinary course of the
Business, consistent with past practice;
(k) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization, or other
reorganization or business combination of Xxxxxx Sub and Xxxxxx Partnership;
or
(l) agree to do any of the things described in clauses (a) through (k)
of this SECTION 5.2.
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SECTION 5.3 NEGATIVE COVENANT OF XXXXXX. Except with the prior written
consent of the Purchasers, Xxxxxx shall not, from the date of this Agreement
to the Closing Date, adopt a plan of complete liquidation or dissolution.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.1 ACCESS TO, AND INFORMATION CONCERNING, PROPERTIES AND
RECORDS. During the pendency of the transactions contemplated hereby, the
Seller shall give the Purchasers, their legal counsel, accountants and other
representatives full access during normal business hours, throughout the
period prior to the Closing Date, to all of the assets of the Business,
including, without limitation, the books, Contracts, properties, premises,
permits, licenses, Governmental Authorizations and records, and shall permit
the Purchasers and their representatives to make such inspections (including,
without limitation, with regard to such properties, physical inspection of
the surface and subsurface thereof which is not materially intrusive) and to
have discussions with material suppliers and customers of Seller as the
Purchasers and such representatives may require and furnish to the Purchasers
and their representatives during such period all such information concerning
Seller and its affairs as they may reasonably request. With regard to
physical inspection or testing, Purchasers shall restore such properties, to
the extent reasonable and customary under the circumstances, to substantially
their original condition. Purchasers shall be responsible for any Loss (other
than consequences of complying with applicable Governmental Requirements)
resulting directly from Purchasers' entry or conduct of such testing.
Purchasers shall be responsible for disposal of any waste or materials
generated during such investigation in accordance with any applicable
Governmental Requirements. Upon Seller's request, Purchasers shall provide
Seller a copy of any such written test methodologies or results which relate
to the Assets. Purchasers shall maintain the confidentiality of such test
results in accordance with SECTION 6.4. The Purchasers agree that all
discussions and communications with suppliers and customers of the Seller
will be with the consent and cooperation of the Seller.
SECTION 6.2 MISCELLANEOUS AGREEMENTS AND CONSENTS. Subject to the terms
and conditions of this Agreement, the Purchasers and the Seller agree to use
their good faith, reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable laws and regulations to consummate and make
effective, as soon as practicable after the date hereof, the transactions
contemplated by this Agreement, including, without limitation, making the
required filings under the HSR Act and seeking the early termination or
expiration of the waiting period thereunder. Purchasers agree to pay the
filing fee in connection with the HSR Act filings.
SECTION 6.3 PUBLIC ANNOUNCEMENT. Except as determined under
applicable law by counsel to the Seller or the Purchasers, the timing
and content of any announcements, press releases or other public
statements concerning the matters contained herein will occur upon, and
be determined by, the mutual consent of the Seller and the Purchasers.
SECTION 6.4 CONFIDENTIALITY. Without the express written consent of all
of the parties hereto, each of the parties hereto agrees to maintain in
confidence and not disclose to any other person the terms of the transactions
contemplated herein or the information delivered in connection with the
Purchasers' due diligence investigation, other than disclosures required to
obtain the approvals for the transactions contemplated hereby, disclosures to
those professionals and advisors who have a need to know, disclosures of
information already available to the public or any other disclosures required
by applicable law or judicial, regulatory or administrative proceeding. In
the event that any Purchaser or any Seller is at any time requested or
required (by oral questions, interrogatories, request for information or
documents, subpoena or other similar process) to disclose any information
supplied to it in connection with the transactions contemplated hereby, such
party agrees to provide the other parties hereto prompt notice of such
request so that an appropriate protective order may be sought and/or such
other party may waive the first party's compliance with the terms of this
SECTION 6.4.
13
SECTION 6.5 CERTAIN POST-CLOSING ASSISTANCE BY PURCHASERS. Purchasers
agree to cause the appropriate personnel to assist Seller in the prosecution
or defense of any claims and litigation (including counterclaims filed by
Seller) for which Seller has indemnified Purchasers hereunder. Such services
shall be rendered by Purchasers to Seller at no cost and expense to Seller
except that Seller shall reimburse Purchasers for any reasonable
out-of-pocket travel and similar expenses incurred by the personnel of
Purchasers in performing these functions.
SECTION 6.6 XXXXXX NAME. Purchasers acknowledge and agree that no rights
of any kind whatsoever in the name "Xxxxxx" are being granted or transferred
in connection with this Agreement. At all times after the Closing Date,
Purchasers shall refrain from using the word "Xxxxxx" or any word or
expression similar thereto in the name under which Purchasers do business or
in any corporate name, trademark, service xxxx or other name or xxxx used in
connection with their business. As promptly as practicable after the Closing
Date, but in any event within thirty (30) days after the Closing Date, the
name "Xxxxxx" shall be removed by Purchasers from all of the Assets,
including any stationery, business cards, forms or other documents.
SECTION 6.7 COMPLIANCE WITH BULK SALES LAWS. The Purchasers and the
Seller hereby waive compliance with the bulk sales law and any other similar
laws in any applicable jurisdiction in respect of the transactions
contemplated by this Agreement.
SECTION 6.8 STOCKHOLDER MEETING. Xxxxxx shall call and hold a meeting of
its stockholders to be held as soon as is practicable for the purpose of
voting on the transactions contemplated hereunder. Xxxxxx'x Board of
Directors shall recommend to its stockholders approval of the transactions
contemplated hereunder and shall take all such actions as may be reasonably
required to obtain such approvals as promptly as practicable, including,
without limitation, the solicitation of proxies.
ARTICLE VII.
CONDITIONS TO CLOSING
SECTION 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO CLOSE. The
obligations of each party to close the transactions contemplated hereby are
subject to the reasonable satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) The receipt of regulatory approvals and the expiration of any
applicable waiting period with respect thereto;
(b) The Closing will not violate any injunction, order or decree of any
court or Governmental Authority having competent jurisdiction; and
(c) Approval of the transactions contemplated hereunder by the
stockholders of Xxxxxx.
SECTION 7.2 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS TO CLOSE.
The obligations of the Purchasers to close the transactions contemplated
herein are subject to the reasonable satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) Subject to SECTION 7.4, all representations and warranties of the
Seller contained herein shall be true and correct in all material respects
(except to the extent qualified by a materiality standard, in which case such
representations and warranties shall be true and correct) as of the date
hereof and at and as of the Closing (except that Purchaser's satisfaction
with its review of any update by Seller to SCHEDULE 2.8 shall also be a
condition to closing), with the same force and effect as though made on and
as of the Closing;
14
(b) The Seller shall have performed in all material respects all
obligations and agreements and complied with all covenants and conditions
contained in this Agreement to be performed or complied with by the Seller
prior to the Closing Date;
(c) The Seller shall have executed and delivered to the Purchasers
proper instruments for the transfer of the Assets in form and substance
reasonably satisfactory to Purchasers and their counsel in accordance with
SECTION 4.4 hereof;
(d) The Seller shall have furnished the Purchasers with evidence of
consents as shall be required to enable the Purchasers to continue to enjoy
the benefit of any material Governmental Authorization, lease, license,
permit, Environmental Permit, Contract or other agreement or instrument to or
of which any Seller is a party or a beneficiary as it relates to the
Business, including, without limitation, consents to assignment of the
agreements listed on EXHIBIT 3;
(e) The Purchasers shall have received certificates dated as of the
Closing Date executed by the President or Vice President of each Seller
certifying to the effect described in SECTIONS 7.2(a) and 7.2(b):
(f) The Purchasers shall have received the written opinion dated the
Closing Date of Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P., counsel for the
Seller, in form and substance reasonably satisfactory to the Purchasers and
their counsel.
SECTION 7.3 CONDITIONS TO THE OBLIGATIONS OF THE SELLER TO CLOSE. The
obligations of the Seller to close the transactions contemplated herein are
subject to the reasonable satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) All representations and warranties of Purchasers contained herein
shall be true and correct in all material respects (except to the extent
qualified by a materiality standard, in which case such representations and
warranties shall be true and correct) as of the date hereof and at and as of
the Closing, with the same force and effect as though made on and as of the
Closing;
(b) The Purchasers shall have performed in all material respects all
obligations and agreements and complied with all covenants and conditions
contained in this Agreement to be performed or complied with by Purchasers
prior to the Closing Date;
(c) The Seller shall have received certificates dated as of the Closing
Date, executed by an appropriate officer of each Purchaser certifying to the
effect described in SECTIONS 7.3(a) and 7.3(b);
(d) The Seller shall have received the Purchase Price;
(e) Enterra Sub shall have executed and delivered to the Seller proper
instruments for the assumption of the Assumed Liabilities, in each case, in
form and substance reasonably satisfactory to Seller and its counsel in
accordance with SECTION 4.4 hereto; and
(f) The Seller shall have received the written opinion dated the
Closing Date of Xxxxxx, Xxxxx & Bockius, counsel for the Purchasers, in form
and substance reasonably satisfactory to Seller and its counsel.
SECTION 7.4 AMENDMENTS TO DISCLOSURE SCHEDULE. In addition to changes,
amendments or supplements to the Disclosure Schedule as permitted by the
first paragraph of Article II, Seller may amend the Disclosure Schedule to
include an item or items which should have been included on the date of this
Agreement but which was inadvertently omitted. In such case, the Disclosure
Schedule will be deemed corrected as of the date of this Agreement; provided
however, that such amendment made by Seller shall not be taken into account
in connection with determining fulfillment of Purchaser's condition to
closing set forth in Section 7.2(a) hereof
15
which provides that all representations of the Seller shall be true and
correct in all material respects on the date of this Agreement (subject to
the exception set forth therein).
ARTICLE VIII.
TERMINATION; AMENDMENT; WAIVER
SECTION 8.1 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to
the Closing Date:
(a) By mutual written consent of Enterra and Xxxxxx;
(b) By Enterra, if any of the conditions to Closing contained in
SECTION 7.1 or 7.2 shall not have been complied with or performed at the time
required for such compliance or performance and such noncompliance or
nonperformance shall not have been waived in writing by Enterra.
(c) By Xxxxxx, if any of the conditions to Closing contained in
SECTION 7.1 or 7.3 shall not have been complied with or performed at the time
required for such compliance or performance and such noncompliance or
nonperformance shall not have been waived in writing by Xxxxxx.
(d) By Enterra or Xxxxxx, if the Closing Date shall not have occurred
on or before 5:00 p.m., Houston time, on December 20, 1995 or such later date
agreed to in writing by Enterra and Xxxxxx; and
(e) By Enterra or Xxxxxx, if any court of competent jurisdiction in the
United States of America or other federal or state governmental body shall
have issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions herein contemplated and
such order, decree, ruling or other action shall have been final and
nonappealable.
SECTION 8.2 EFFECT OF TERMINATION. The following provisions shall apply
in the event of a termination of this Agreement:
(a) If this Agreement is terminated by either Enterra or Xxxxxx as
permitted under SECTION 8. l(a) or (e) hereof and not as the result of the
failure of any party to perform its obligations hereunder, such termination
shall be without liability to any party to this Agreement or any stockholder,
partner, director, officer, employee, agent or representative of such party.
(b) If this Agreement is terminated as a result of the failure of
Purchasers to perform their obligations hereunder, Purchasers shall be fully
liable for any and all damages (other than special, consequential or punitive
damages) sustained or incurred by Seller.
(c) If this Agreement is terminated as a result of the failure of
Seller to perform its obligations hereunder, Seller shall be fully liable for
any and all damages (other than special, consequential or punitive damages)
sustained or incurred by Purchasers.
(d) Seller and Purchasers agree that the provisions of SECTIONS 6.4 and
12.3 shall survive any termination of this Agreement. In the event of such
termination, each party promptly will destroy or, if requested, redeliver to
the other party all documents, work papers and other materials furnished by
such party relating to the transactions contemplated hereby (including all
copies made thereof). All confidential information received by any party, or
any employee, agent or representative of any party, concerning the other
party shall continue to be treated in accordance with the confidentiality
obligations set forth in SECTION 6.4.
SECTION 8.3 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by all the parties.
16
SECTION 8.4 EXTENSION; WAIVER. At any time prior to the Closing Date,
Purchasers or Seller may (i) extend the time for the performance of any of
the obligations or other acts of the non-extending party, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto by the non-waiving
party, or (iii) waive compliance with any of the agreements or conditions
contained herein by the non-waiving party. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties
hereto agree that their respective representations and warranties contained
in this Agreement shall survive for a period of one year after the Closing
Date and shall thereafter terminate and be of no further force or effect,
except that (a) all representations and warranties set forth in SECTIONS 2.1,
2.2, 2.9, 3.1 and 3.2 hereof shall survive the Closing Date without
limitation, (b) the representations and warranties set forth in SECTION 2.15
hereof shall survive for a period of five (5) years after the Closing Date,
and (c) any representation or warranty as to which a claim (including,
without limitation, a contingent claim) has been asserted in writing by a
party and delivered to the other party during the survival period shall
continue in effect with respect to such claim until such claim shall have
been finally resolved or settled. Notwithstanding any investigation or audit
conducted before or after the Closing Date or the decision of any party to
complete the Closing, each party shall be entitled to rely upon the
representations and warranties of the other party or parties set forth herein.
ARTICLE X.
INDEMNIFICATION
SECTION 10.1 INDEMNIFICATION BY THE SELLER. Subject to the limitations
described in SECTION 10.5, each Seller, jointly and severally,
unconditionally, absolutely and irrevocably agrees to and shall defend,
indemnify and hold harmless the Purchasers, and each of the Purchasers'
Subsidiaries, stockholders, partners, Affiliates, officers, directors,
employees, agents, successors, assigns, heirs and legal and personal
representatives (the Purchasers and all such persons or other entities are
collectively referred to as the "PURCHASERS' INDEMNIFIED PERSONS"), from and
against, and shall reimburse the Purchasers' Indemnified Persons for, each
Loss paid, imposed on or incurred by the Purchasers' Indemnified Persons:
(a) resulting from any inaccuracy in any representations or warranties
of any Seller under this Agreement, or any certificate delivered or to be
delivered by any Seller pursuant hereto,
(b) to the extent caused by any breach of any covenant or agreement in
this Agreement by any Seller,
(c) which is an Excluded Liability,
(d) to the extent caused by any violation of any bulk sales law or
other similar state laws designed to protect the rights of creditors in sales
of substantially all assets in any applicable jurisdiction in respect of the
transactions contemplated by this Agreement,
(e) with the exception of those matters governed by SECTION 10.1(f)
hereof, because of, resulting from or arising out of the business, operations
or assets of the Seller prior to the Closing Date but excluding any Assumed
Liabilities, or
(f) to the extent caused by an Environmental Claim, or any Liability
which otherwise relates to, or involves a Liability that arises out of or is
based upon, any Environmental Law to the extent that such
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Environmental Claim or Liability is caused by any activity occurring,
condition existing, omission to act or other matter existing prior to the
Closing Date, subject to reduction, if any, to the extent the liability has
been exacerbated by Purchaser after the Closing Date or Purchaser has failed
to use reasonable efforts to mitigate such liability after the Closing Date
if Purchaser actually knew of such liability; provided, however, no indemnity
or reimbursement shall be provided by Seller for any Liability for which an
Environmental Claim has not been made unless any proposed cost or expenditure
is approved in writing by Seller, which approval will not be withheld
unreasonably and; provided further, however, except to the extent that no
flexibility exists with regard to ordered compliance with Environmental Laws,
no indemnity may be sought for costs associated with an Environmental Claim
or Liability that exceeds the minimum standard necessary to attain compliance
with Environmental Laws. Purchaser shall at all times have the right to self
report to Governmental Authorities any condition it believes constitutes a
Liability under Environmental Laws. For the purpose of this SECTION 10.1(f),
written agreement by Governmental Authorities of clean-up responsibility, or
approval by Governmental Authorities of a clean-up plan, shall constitute an
Environmental Claim. Any proposed plan to address compliance with
Environmental Laws shall be developed jointly between Purchasers and Seller,
and must be presented to Seller prior to any implementation; and
any and all actions, suits, claims, proceedings, investigations, demands,
assessments, audits, fines, judgments, costs and other Losses (including,
without limitation, disbursements and expenses of attorneys) incident to any
of the foregoing or to the enforcement of this SECTION 10.1.
With respect to matters not involving Proceedings commenced or threatened by
third parties, within five (5) days after notification from the Purchasers'
Indemnified Persons supported by reasonable documentation setting forth the
nature of the circumstances entitling the Purchasers' Indemnified Persons to
indemnity hereunder, the Seller, at no cost or expense to the Purchasers'
Indemnified Persons, shall acknowledge, if Seller agrees to so indemnify, to
the Purchasers' Indemnified Persons its obligations to indemnify under this
SECTION 10.1 and shall diligently commence resolution of such matters in a
manner reasonably acceptable to the Purchasers' Indemnified Persons and shall
diligently and timely prosecute such resolution to completion; provided,
however, with respect to those claims that may be satisfied by payment of a
liquidated sum of money, the Seller may, in its sole discretion, but shall
not be required to, promptly pay the amount so claimed to the extent
supported by reasonable documentation and so long as any settlement includes
a complete release of all Purchasers' Indemnified Persons. If litigation or
any other Proceeding is commenced or threatened, the provisions of SECTION 10.3
shall control.
SECTION 10.2 INDEMNIFICATION BY THE PURCHASERS. Subject to the
limitations described in SECTION 10.6, each Purchaser, jointly and severally,
unconditionally, absolutely and irrevocably agrees to and shall defend,
indemnify and hold harmless the Seller and each of Seller's Subsidiaries,
stockholders, partners, Affiliates, officers, directors, employees, agents,
successors, assigns, heirs and legal and personal representatives (the Seller
and all such persons or other entities are collectively referred to as the
"SELLER'S INDEMNIFIED PERSONS") from and against, and shall reimburse the
Seller's Indemnified Persons for, each Loss paid, imposed on or incurred by
the Seller's Indemnified Persons:
(a) resulting from any inaccuracy in any representations or warranties
of the Purchasers under this Agreement, or any certificate delivered or to be
delivered by the Purchasers pursuant hereto,
(b) to the extent caused by any breach of any covenant or agreement in
this Agreement by the Purchasers,
(c) which is an Assumed Liability, or
(d) because of, resulting from or arising out of the operation of the
Business after the Closing Date, and
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any and all actions, suits, claims, proceedings, investigations, demands,
assessments, audits, fines, judgments, costs and other Losses (including
without limitation disbursements and expenses of attorneys) incident to any
of the foregoing or to the enforcement of this SECTION 10.2.
With respect to matters not involving Proceedings commenced or threatened by
third parties, within five (5) days after notification from the Seller's
Indemnified Persons supported by reasonable documentation setting forth the
nature of the circumstances entitling the Seller's Indemnified Persons to
indemnity hereunder, the Purchasers or Enterra (as the case may be), at no
cost or expense to the Seller's Indemnified Persons, shall acknowledge, if
Purchasers agree to so indemnify, to the Seller's Indemnified Persons their
obligations to indemnify under this SECTION 10.2 and shall diligently
commence resolution of such matters in a manner reasonably acceptable to the
Seller's Indemnified Persons and shall diligently and timely prosecute such
resolution to completion; provided, however, with respect to those claims
that may be satisfied by payment of a liquidated sum of money, the Purchasers
or Enterra (as the case may be) may promptly pay the amount so claimed to the
extent supported by reasonable documentation and so long as any settlement
includes a complete release of all Seller's Indemnified Persons. If
litigation or any other Proceeding is commenced or threatened, the provisions
of SECTION 10.3 shall control.
SECTION 10.3 NOTICE AND DEFENSE OF THIRD PARTY CLAIMS. If any Proceeding
shall be brought or asserted under this Article against an indemnified party
or any successor thereto (the "INDEMNIFIED PERSON") in respect of which
indemnity may be sought under this Article from an indemnifying person or any
successor thereto (the "INDEMNIFYING PERSON"), the Indemnified Person shall
give prompt written notice of such Proceeding to the Indemnifying Person who
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Person and the payment of all
expenses. Actual or threatened action by a Governmental Authority or other
entity is not a condition or prerequisite to the Indemnifying Person's
obligations under this Article. The Indemnified Person shall have the right
to employ separate counsel in any of the foregoing Proceedings and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Person. The Indemnified Person's
right to participate in the defense or response to any Proceeding should not
be deemed to limit or otherwise modify its rights under this Article. In the
event that the Indemnifying Person, within ten (10) business days after
notice of any such Proceeding, fails to acknowledge its obligation to
indemnify hereunder and to assume the defense thereof, the Indemnified Person
shall have the right to undertake the defense, compromise or settlement of
such Proceeding for the account of the Indemnifying Person, subject to the
right of the Indemnifying Person to assume the defense of such Proceeding
with counsel reasonably satisfactory to the Indemnified Person at any time
prior to the settlement, compromise or final determination thereof. Anything
in this Article to the contrary notwithstanding, the Indemnifying Person
shall not, without the Indemnified Person's prior written consent, settle or
compromise any Proceeding or consent to the entry of any judgment with
respect to any Proceeding for anything other than money damages paid by the
Indemnifying Person. The Indemnifying Person may, without the Indemnified
Person's prior written consent, settle or compromise any such Proceeding or
consent to entry of any judgment with respect to any such Proceeding that
requires solely the payment of money damages by the Indemnifying Person and
that includes as an unconditional term thereof the release by the claimant or
the plaintiff of the Indemnified Person from all liability in respect of such
Proceeding. As a condition to asserting any rights under this Article, each
of the Purchasers' Indemnified Persons must appoint Enterra, and each of the
Seller's Indemnified Persons must appoint Xxxxxx, as their sole agents for
all matters relating to any claim under this Article. Subject to compliance
with the time limitations set forth in SECTION 9.1 hereof, the Indemnified
Person's failure to give prompt written notice to the Indemnifying Person of
any actual, threatened or possible demand which may give rise to a right of
indemnification hereunder shall not relieve the Indemnifying Person of any
liability which the Indemnifying Person may have to the Indemnified Person
unless the failure to give such notice materially and adversely prejudiced
the Indemnifying Person.
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SECTION 10.4 LIMITATIONS.
(a) An Indemnifying Person shall have no liability under SECTION
10.1(a) or 10.2(a) unless notice of a claim for indemnity, or notice of facts
as to which an indemnifiable Loss is expected to be incurred, shall have been
given within the periods specified in SECTION 9.1.
(b) In calculating the amount of any Loss for which any Indemnifying
Person is liable under this ARTICLE X, there shall be taken into
consideration the value of any federal or state income tax effects on the
Indemnified Person that result from the circumstances to which the Loss
related or from which the Loss arose as well as any payments made by any
Indemnifying Person.
SECTION 10.5 LIMITATION OF SELLER'S LIABILITY.
(a) Notwithstanding anything to the contrary contained in SECTION 10.1,
after the Closing, the aggregate liability of the Seller for any Loss,
individually or in the aggregate with all other Losses covered by this
Agreement, for which indemnification is required by Seller on behalf of
Purchasers' Indemnified Persons pursuant to SECTION 10.1, shall be limited to
(i) the aggregate amount of the Excluded Liabilities (which may be used to
satisfy only the Excluded Liabilities) and (ii) $4,000,000 (for all other
matters, exclusive of a termination described in SECTION 8.2(c), for which
liability shall be unlimited). The matters referred to in the immediately
prior parenthetical shall include, without limitation, all matters described
in SECTION 10.1(a), (b), (d), (e) and (f) and the qualifier set forth
immediately after SECTION 10.1(f).
(b) The Purchasers' Indemnified Persons are entitled to indemnification
pursuant to SECTION 10.l only to the extent that the amount of any Loss,
individually or in the aggregate with all other Losses covered by this
Agreement, exceeds $250,000 and is not an Assumed Liability and in such event
the Purchasers' Indemnified Persons shall be entitled, subject to SECTION
10.5(a) hereof, to recover the full amount of such Loss in excess of
$250,000. Such $250,000 limitation shall not apply, however, to (i) a Net
Asset Value adjustment payment pursuant to SECTION 4.5, or (ii) Seller's
obligations pursuant to SECTION 12.2.
SECTION 10.6 LIMITATION OF PURCHASERS' LIABILITY.
(a) Notwithstanding anything to the contrary contained in SECTION 10.2,
after the Closing, the aggregate liability of the Purchasers for any Loss,
individually or in the aggregate with all other Losses covered by this
Agreement, for which indemnification is required by Purchasers on behalf of
Seller's Indemnified Persons pursuant to SECTION 10.2, shall be limited to
(i) the aggregate amount of the Assumed Liabilities (which may be used to
satisfy only the Assumed Liabilities) and (ii) $4,000,000 (for all other
matters, exclusive of a termination described in SECTION 8.2(b), for which
liability shall be unlimited).
(b) The Seller's Indemnified Persons are entitled to indemnification
pursuant to SECTION 10.2 only to the extent that the amount of any Loss,
individually or in the aggregate with all other Losses covered by this
Agreement, exceeds $250,000 and is not an Excluded Liability, and in such
event the Seller's Indemnified Persons shall be entitled, subject to SECTION
10.6(a) hereof, to recover the full amount of such Loss in excess of
$250,000. Such $250,000 limitation shall not apply, however, to (i) a
reimbursement obligation of a Purchaser pursuant to SECTION 11.1(b) hereof,
(ii) a Loss resulting from a breach by a Purchaser of SECTION 3.7 hereof,
(iii) a Loss resulting from Purchasers' reimbursement obligation set forth in
SECTION 12.15, (iv) the Net Asset Value adjustment payment pursuant to
SECTION 4.5; or (v) Purchasers' obligations pursuant to SECTION 12.2.
SECTION 10.7 LIMITATION ON CLAIMS. No party to this Agreement shall make
a claim against another party to this Agreement except pursuant to, and
subject to the limitations contained in, this ARTICLE X.
SECTION 10.8 INCONSISTENT PROVISIONS. The provisions of this Article
shall govern and control over any inconsistent provisions of this Agreement.
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ARTICLE XI.
EMPLOYMENT MATTERS
SECTION 11.1 EMPLOYMENT.
(a) The full-time and part-time employees of the Business, whether
currently employed, or employed between the date hereof and the Closing Date,
are collectively referred to as the "XXXXXX EMPLOYEES". As soon as
reasonably practicable after the date of this Agreement, Purchasers shall
furnish Seller with a list of the names of each of the Xxxxxx Employees to
whom Purchasers reasonably expect to extend offers of employment on the
Closing Date ("Continuing Employees").
(b) Any Xxxxxx Employee who is not a Continuing Employee, as determined
according to the list provided by Purchasers to Seller under SECTION 11.1(a),
shall be terminated by Seller prior to the Closing Date. Notwithstanding
anything to the contrary in SECTION 11.1(a), prior to the Closing Date,
Seller shall provide Xxxxxx Employees who are not Continuing Employees and
who are identified in SECTION 11.1(a), with severance benefits under the
Seller's Severance Plan attached hereto as EXHIBIT 4; provided, however, that
if the aggregate amount of such severance payments referred to in this
sentence (taking into account only those Xxxxxx Employees whose employment is
terminated by Xxxxxx as required by this Agreement) exceeds Fifty Thousand
Dollars ($50,000), Purchasers shall promptly reimburse Seller for the amount
of such excess. With respect to any Xxxxxx Employee, however, in no event
shall Purchasers be required to reimburse Seller for severance payments in
excess of those required by the terms of the Seller's Severance Plan.
SECTION 11.2 PURCHASERS' RESPONSIBILITY FOR XXXXXX EMPLOYEES' RETIREMENT
AND OTHER BENEFITS.
(a) Purchasers will cause to be provided pension, medical, 401k plan
and other benefits to all Continuing Employees from and after the Closing
Date to the same extent provided to similarly situated employees of
Purchasers.
(b) Seller will retain responsibility for and continue to pay all
medical, life insurance, disability and other welfare plan expenses and
benefits for each Xxxxxx Employee with respect to claims incurred by such
employees or their covered dependents under any benefit plan and subject to
the terms thereof prior to the Closing Date. Expenses and benefits with
respect to claims incurred by Continuing Employees or their covered
dependents on or after the Closing Date shall be the responsibility of
Purchasers. For purposes of this paragraph, a claim is deemed incurred when
the services that are the subject of the claim are performed; provided,
however, that in the case of life insurance, a claim is deemed incurred when
the death occurs and in the case of long-term disability benefits, when the
disability occurs. With respect to each Xxxxxx Employee who is not a
Continuing Employee or such employee's dependent, the Seller shall be
responsible for health care continuation rights under SECTION 4980B of the
Tax Code and SECTIONS 601-609 of ERISA for those Xxxxxx Employees. The
Purchasers shall be responsible for all continuation of health coverage
rights under SECTION 4980B of the Tax Code and SECTIONS 601-609 of ERISA for
all Continuing Employees and their dependents.
SECTION 11.3 NO THIRD PARTY BENEFICIARIES. No provision of this Article
shall create any third party beneficiary or other rights in any employee or
former employee (including any beneficiary or dependent thereof) of the
Seller in respect to continued employment or resumed employment with either
the Purchasers or Seller and no provision of this ARTICLE XI shall create any
such rights in any employee or former employee (including any beneficiary or
dependent thereof) of Seller with respect to any benefits that may be
provided directly or indirectly in any Benefit Plan or other employee benefit
plan or program.
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ARTICLE XII.
MISCELLANEOUS
SECTION 12.1 BOOKS AND RECORDS. Upon consummation of the transactions
provided herein and for a period of five years thereafter, the Seller agrees
that upon the reasonable written request of the Purchasers, the Seller will
provide the Purchasers with access to the tax records (or copies thereof)
retained by the Seller pursuant to this Agreement. All costs and expenses
associated with providing such tax records (or copies thereof) shall be borne
by the Purchasers. Nothing herein shall be deemed to require the Seller to
maintain or refrain from disposing of any books and records transferred
pursuant to this Agreement for any period of time after the Closing Date.
However, if Seller desires to dispose of any such books or records, Seller
agrees to give Purchasers notice of such intention and the opportunity to
retain such books and records, at Purchasers' expense.
SECTION 12.2 ACCOUNTS RECEIVABLE.
(a) In the event that 90% of the face amount of the accounts receivable
included within the Assets on the Closing Date (the "90% AMOUNT") are not
collected within one hundred twenty (120) days after the Closing Date, then
at the request of Purchasers, the Seller shall pay Enterra Sub an amount
equal to (i) the 90% Amount, (ii) less amounts collected by Purchasers, (iii)
less the allowance for doubtful accounts utilized in the calculation of the
Agreed Upon Net Asset Value.
(b) For purposes of SECTION 12.2(a), Purchasers shall use best efforts
to diligently collect all accounts receivable. All payments received by
Purchasers from any debtor for accounts receivable which are Assets shall be
applied first to the oldest accounts receivable applicable to such debtor,
whether owed to Seller or Purchasers.
(c) If and when a payment is made by Seller to Enterra Sub pursuant to
SECTION 12.2(a), upon receipt of such payment Purchasers shall assign to the
Seller making the payment all of its rights with respect to the uncollected
accounts receivables giving rise to the payment and shall also thereafter
promptly remit any excess collections received by Purchasers with respect to
such assigned receivables. If and when the amount subsequently collected by
Seller with respect to the assigned receivables equals (i) the payment
therefor plus (ii) the costs and expenses reasonably incurred by Seller in
the collection of such assigned receivables, Seller shall reassign to Enterra
Sub all of such assigned receivables as have not been collected in full by
Seller and shall also thereafter promptly remit any excess collections
received by Seller. Upon the reasonable written request of Enterra Sub,
Seller shall provide it with a status report concerning the collection of
assigned receivables.
SECTION 12.3 EXPENSES. The Purchasers and the Seller will each pay their
own expenses in connection with the transactions contemplated hereby.
SECTION 12.4 BROKERS AND FINDERS. Neither the Purchasers nor the Seller
shall be responsible to the other party for the payment of any broker's fee,
finder's fee or commission of any sort in connection with the transactions
described herein. The Seller shall be responsible for payment of any such fee
to Wertheim Xxxxxxxx & Co. Incorporated or any other party to which the
Seller has such an obligation. The Purchasers shall be responsible for
payment of any such fee to Xxxxxxx & Company International, Inc. or any other
party to which the Purchasers have such an obligation.
SECTION 12.5 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement constitutes
the entire agreement among the parties and their Affiliates with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties and their Affiliates
or any of them with respect to the subject matter hereof. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns,
but neither this Agreement nor any of the rights, interests and obligations
hereunder shall be assigned by any of the parties hereto without
22
the prior written consent of the other parties, except that this Agreement
may be assigned to an Affiliate by any party without the prior written
consent of another party; provided however, that notwithstanding such
assignment, the assignor shall remain liable for all obligations hereunder.
SECTION 12.6 FURTHER ASSURANCES. From time to time as and when requested
by the Purchasers, the Seller shall execute such further agreements,
assignments, documents, deeds, certificates and other instruments of
conveyance and transfer and to take or cause to be taken such other actions
as the Purchasers may reasonably require to vest title to the Assets in the
Purchasers and as shall be reasonably necessary or advisable to carry out the
purposes of and to effect the transactions contemplated by this Agreement.
SECTION 12.7 ENFORCEMENT OF THE AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled pursuant to
the terms hereof or otherwise, at law or in equity.
SECTION 12.8 SEVERABILITY. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws in any
jurisdiction, that provision shall be ineffective to the extent of such
illegality, invalidity or unenforceability in that jurisdiction and such
holding shall not, consistent with applicable law, invalidate or render
unenforceable such provision in any other jurisdiction, and the legality,
validity and enforceability of the remaining provisions of this Agreement
shall not be affected thereby, and shall remain in full force and effect in
all jurisdictions.
SECTION 12.9 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by registered mail (postage prepaid, return receipt
requested) or prepaid Federal Express (return receipt requested) to the
respective parties as follows:
if to any Seller:
Xxxxxx Corporation
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. xxx Xxxxxxxxx, III, Esq.
Vice President, General Counsel and Corporate Secretary
with required copy (which shall not constitute notice) to:
Xx. Xxxxx X. Xxxxxx
President and Chief Executive Officer
00 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
and
Xxxx X. Held, Esq.
Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
23
if to the Purchasers:
Enterra Corporation
00000 Xxxxxxxxx Xxxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
with required copy (which shall not constitute notice) to:
Xxxxxxxxxxx International Incorporated
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: H. Xxxxxxx Xxxxxx, Esq.
and
Xxxxx X. Xxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 12.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 12.11 GENDER: "INCLUDING" IS NOT LIMITING; DESCRIPTIVE HEADINGS.
The masculine and neuter genders used in this Agreement each includes the
masculine, feminine and neuter genders, and the singular number includes the
plural, each where appropriate, and vice versa. Wherever the term "including"
or a similar term is used in this Agreement, it shall mean "including by way
of example only and without in any way limiting the generality of the clause
or concept referred to." The descriptive headings are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
SECTION 12.12 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and the other
Purchasers' Indemnified Parties and Seller's Indemnified Parties, and nothing
in this Agreement, express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
SECTION 12.13 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
SECTION 12.14 INCORPORATION BY REFERENCE. Any and all schedules,
exhibits, annexes, statements, reports, certificates or other documents or
instruments referred to herein or attached hereto are incorporated herein by
reference hereto as though fully set forth at the point referred to in the
Agreement.
SECTION 12.15 NON-COMPETITION AGREEMENT WITH XXXXX X. XXXX AND XXXXXXXX
X. XXXX, XX. Seller agrees to enforce Seller's rights under the
Non-Competition Agreement dated November 9, 1993 among Xxxxxx, Xxxxx X. Xxxx
and Xxxxxxxx X. Xxxx, Xx. (the "XXXX NON-COMPETITION AGREEMENT") in
accordance with its terms;
24
provided, however, the Purchasers shall promptly reimburse Seller for any
costs or expenses (including, without limitation, attorneys' fees) incurred
by Seller as a result of such action. Seller agrees not to amend the Xxxx
Non-Competition Agreement, or grant the waiver described in SECTION 5 of the
Xxxx Non-Competition Agreement, without the prior written consent of
Purchasers. Each Seller acknowledges that any violation of this SECTION
12.15 will result in irreparable injury to the Purchasers and their
Affiliates and that damages at law would not be reasonable or adequate
compensation to the Purchasers and their Affiliates for a violation of this
SECTION 12.15 and that Purchasers and their Affiliates shall be entitled to
have the provisions of this SECTION 12.15 specifically enforced by
preliminary and permanent injunctive relief without the necessity of proving
actual damages and without posting bond or other security.
SECTION 12.16 NON-COMPETITION BY SELLER; EQUITABLE REMEDIES.
(a) Until three years after the Closing Date, Seller agrees that it
will not, anywhere in the world, unless acting in accordance with Enterra's
prior written consent: (i) own directly or indirectly, manage, operate or
control or participate in the ownership, management, operation or control of,
or be connected as a principal, agent, representative, consultant, investor,
owner, partner, manager or joint venturer with, or permit its name to be used
by or in connection with, any business or enterprise engaged anywhere in the
world, in any aspect of the Business, provided that Seller may invest as an
investor in the voting securities of any person that is a reporting company
under the Securities Exchange Act of 1934, as amended, so long as (A) the
aggregate amount of such securities that Seller owns directly or indirectly
is less than five percent of the total outstanding voting securities of such
person and (B) Seller is not otherwise an Affiliate with respect to such
person, or (ii) solicit the employment of any person who on the Closing Date,
or who within two years thereafter, is employed by Purchasers on a full or
part-time basis, provided, however, that Seller may have employment
discussions with, and hire, those persons who approach Seller of their own
volition.
(b) Each Seller acknowledges that (i) the provisions of this SECTION
12.16 are reasonable and necessary to protect the legitimate interests of
Purchasers and their Affiliates, (ii) the Business is international in scope,
(iii) any violation of this SECTION 12.16 will result in irreparable injury
to the Purchasers and their Affiliates and that damages at law would not be
reasonable or adequate compensation to the Purchasers and their Affiliates
for a violation of this SECTION 12.16 and (iv) Purchasers and their
Affiliates shall be entitled to have the provisions of this SECTION 12.16
specifically enforced by preliminary and permanent injunctive relief without
the necessity of proving actual damages and without posting bond or other
security. In the event that any of the provisions of this SECTION 12.16
should ever be deemed to exceed the time, geographic, or any other
limitations permitted by applicable law, then such provisions shall be deemed
reformed to the maximum permitted by applicable law.
(c) Purchasers and each Seller intend to and do hereby confer
jurisdiction to enforce the covenants set forth in this SECTION 12.16 upon
the courts of any jurisdiction within the geographical scope of such
covenants. In addition to SECTION 12.8 hereof and not in limitation thereof,
if the courts of any one or more of such jurisdictions hold such covenants
unenforceable in whole or in part, it is the intention of Purchasers and each
Seller that such determination not bar or in any way adversely affect the
right of Purchasers and their Affiliates to equitable relief and remedies
hereunder in courts of any other jurisdiction as to breaches or violations of
this SECTION 12.16, such covenants being, for this purpose, severable into
diverse and independent covenants.
(d) Nothing in this SECTION 12.16 is intended to restrict, and shall
not be construed to restrict, Xxxxxx'x ownership, management, operation,
control or participation of its wholly owned subsidiary, Cimarron Gas Holding
Company, or its subsidiaries, which engage in the natural gas marketing,
trading, gathering and processing business and which utilizes gas compressors
in connection with such business in the ordinary course of business.
25
SECTION 12.17 EQUITABLE REMEDIES.
Notwithstanding any other provision of this Agreement, each party will
have the right to institute judicial proceedings against the other party or
anyone acting by, through or under such other party in order to enforce the
instituting party's rights under SECTION 12.15 or 12.16 through specific
performance, injunction or similar equitable relief. For this purpose, each
of the parties hereto irrevocably and unconditionally (i) agrees that any
suit arising out of this Agreement may be brought and adjudicated in the U.S.
District Court for the Southern District of Texas, or, if such court will not
accept jurisdiction, in any court of competent jurisdiction sitting in Xxxxxx
County, Texas, (ii) submits to the non-exclusive jurisdiction of any such
court for the purposes of any such suit and (iii) waives and agrees not to
assert by way of motion, as a defense or otherwise in any such suit, any
claim that it is not subject to the jurisdiction of the above courts, that
such suit is brought in an inconvenient forum or that the venue of such suit
is improper. Each of the parties hereto also irrevocably and unconditionally
consents to the service of any process, pleadings, notices or other papers in
a manner permitted by the notice provisions of SECTION 12.9 hereof.
SECTION 12.18 ARBITRATION.
(a) Except as provided in SECTION 12.17, all disputes, differences or
questions arising out of or relating to this Agreement (including, without
limitation, those as to the validity, interpretation, breach, violation or
termination hereof) shall, at the written request of any party hereto, be
finally determined and settled pursuant to arbitration in Houston, Texas, by
three arbitrators, one to be appointed by Enterra, and one by Seller, and a
neutral arbitrator to be appointed by such two appointed arbitrators. The
neutral arbitrator shall be an attorney and shall act as chairman. Should (i)
either party fail to appoint an arbitrator as hereinabove contemplated within
ten (10) days after the party not requesting arbitration has received such
written request, or (ii) the two arbitrators appointed by or on behalf of the
parties as contemplated in this SECTION 12.18 fail to appoint a neutral
arbitrator as hereinabove contemplated within ten (10) days after the date of
the appointment of the last arbitrator appointed, then any person sitting as
a Judge of the United States District Court for the Southern District of
Texas, Houston Division, upon application of Seller or of Enterra, shall
appoint an arbitrator to fill such position with the same force and effect as
though such arbitrator had been appointed as hereinabove contemplated.
(b) The arbitration proceeding shall be conducted in Houston, Texas, in
accordance with the Rules of the American Arbitration Association. A
determination, award or other action shall be considered the valid action of
the arbitrators if supported by the affirmative vote of two or three of the
three arbitrators. The costs of arbitration (exclusive of attending the
arbitration, and of the fees and expenses of legal counsel to such party, all
of which shall be borne by such party) shall be shared equally by Purchasers
and Seller. The arbitration award shall be final and conclusive and shall
receive recognition, and judgment upon such award may be entered and enforced
in any court of competent jurisdiction.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed as of the day and year first above written.
XXXXXX CORPORATION
By: /s/ Xxxxxx X. xxx Xxxxxxxxx, III
-----------------------------------------
Xxxxxx X. xxx Xxxxxxxxx, III
Vice President, General Counsel and
Corporate Secretary
ENERGY INDUSTRIES, INC.
By: /s/ Xxxxxx X. xxx Xxxxxxxxx, III
-----------------------------------------
Xxxxxx X. xxx Xxxxxxxxx, III
Vice President, General Counsel and
Corporate Secretary
XXXXXX ENERGY INDUSTRIES, L.P.
By XXXXXX RENTALS, INC., its general partner
By: /s/ Xxxxxx X. xxx Xxxxxxxxx, III
-------------------------------------
Xxxxxx X. xxx Xxxxxxxxx, III
Vice President, General Counsel and
Corporate Secretary
ENTERRA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
Vice President
ENTERRA COMPRESSION COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
Vice President
27
EXHIBIT 1
DEFINITIONS
(a) "ACCOUNTANTS' CALCULATION OF NET ASSET VALUE" shall have the meaning
set forth in SECTION 4.5.
(b) "AFFILIATE" as used in this Agreement means, with respect to any person,
(i) any person that, directly or indirectly, controls, is controlled by,
or is under common control with, such person in question, (ii) any
officer, director, stockholder or partner of such person in question, or
member of the extended family of such officer, director, stockholder or
partner and (iii) any person that, directly or indirectly, controls, is
controlled by, or is under common control with, any officer, director,
stockholder or partner of such person in question or member of the
extended family of such officer, director, stockholder or partner. For
the purposes of the definition of Affiliate, "control" (including, with
correlative meaning, the terms "controlled by" and "under common control
with"), as used with respect to any person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.
(c) "AGREED UPON NET ASSET VALUE" shall have the meaning set forth in
SECTION 4.5 hereof.
(d) "AGREEMENT" shall have the meaning specified in the Preamble.
(e) "ASSETS" shall have the meaning specified in SECTION 4.1.
(f) "ASSUMED LIABILITIES" shall have the meaning specified in SECTION 4.2(b).
(g) "BUSINESS" shall mean the natural gas compression businesses historically
engaged in by Xxxxxx Sub and Xxxxxx Partnership and their Affiliates.
(h) "CONTINUING EMPLOYEES" shall have the meaning specified in SECTION 11.1.
(i) "CONTRACTS" mean all agreements contracts, leases or subleases relating
to the Business to which any Seller is a party or by which any Seller
or any of the Assets is bound.
(j) "DISCLOSURE SCHEDULE" shall have the meaning specified in the beginning
of ARTICLE II.
(k) "ENVIRONMENTAL CLAIMS" means any and all administrative or judicial
actions, suits, orders, claims, liens, notices, violations or
proceedings arising under any applicable Environmental Law or any
Environmental Permit binding upon Seller, or at common law or otherwise,
brought, issued or asserted by: (A) a Governmental Authority for
compliance, damages, penalties, removal, response, remedial or other
action pursuant to any applicable Environmental Law or (B) a third party
seeking damages for personal injury caused by Seller or property damage
resulting from the release of a Hazardous Material at or from any
current or prior facility of any Seller for which Seller would bear
liability, including, without limitation, Seller's employees seeking
damages for exposure to Hazardous Materials.
(l) "ENVIRONMENTAL LAWS" means applicable Governmental Requirements currently
in effect related to protection of the environment (including, without
limitation, natural resources), exposure to, control, emission,
discharge, release, threatened release, exposure, handling, use,
manufacturing, generation, treatment, storage, transportation or
disposal of Hazardous Materials.
(m) "ENVIRONMENTAL PERMIT" means all Governmental Authorizations required for
the operation of the Business in conformity with applicable
Environmental Laws and includes any and all orders, consent
1
orders or binding agreements issued or entered into by a Governmental
Authority and binding upon Seller under any applicable Environmental Laws.
(n) "EQUIPMENT LEASES" means the lease agreements covering the compressor
systems and related equipment used or held for use in the Business.
(o) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the
rulings issued thereunder.
(p) "EXCLUDED LIABILITIES" shall have the meaning set forth in SECTION 4.2.
(q) "GAAP" means as to a particular person, such accounting practice as, in
the opinion of independent certified public accountants of recognized
national standing, conforms at the time to generally accepted accounting
principles in the United States, consistently applied, and which are
recognized as such by the Financial Accounting Standards Board.
(r) "GOVERNMENTAL AUTHORITY" means any foreign governmental authority, the
United States of America, any state of the United States, any local
authority and any political subdivision of any of the foregoing, any
multi-national organization or body, any agency, department, commission,
board, bureau, court or other authority of any of the foregoing, or any
quasi-governmental or private body exercising, or purporting to
exercise, any executive, legislative, judicial, administrative, police,
regulatory or taxing authority or power of any nature.
(s) "GOVERNMENTAL AUTHORIZATION" means any permit, license, franchise,
approval, certificate, consent, ratification, permission, confirmation,
endorsement, waiver, certification, registration, qualification or other
authorization issued, granted, given or otherwise made available by or
under the authority of any Governmental Authority or pursuant to any
Governmental Requirement.
(t) "GOVERNMENTAL REQUIREMENT" means any currently published and applicable
law, treaty, ordinance, statute, rule, code, regulation, judgment, decree
or order binding upon Seller, injunction, edict, writ, permit, certificate,
stipulation, common law or other published and legally enforceable
requirement of any Governmental Authority.
(u) "HAZARDOUS MATERIAL" means any hazardous, extremely hazardous, or toxic
substance, material or waste not at a background level (taking into
account offsite conditions) which is regulated by any Governmental
Authority, including without limitation any material or substance that
is (i) defined as a "hazardous substance" under applicable state or
local law, (ii) (a) crude oil products, including, without limitation,
petroleum and (b) solid waste as defined under the Environmental Laws;
the prior or continued presence of which would result in investigation
or cleanup responsibility of Buyer or Seller under Environmental Laws,
(iii) asbestos as regulated by CERCLA, (iv) designated as a "hazardous
substance" pursuant to section 311 of the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Section 1251 et seq. (33 U.S.C.
Section 1321), (v) defined as a "hazardous waste" pursuant to
section 1004 of the Resource Conversation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6901),
(vi) defined as a "hazardous substance" pursuant to section 101 of
the Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601)
("CERCLA"), (vii) defined as a "regulated substance" pursuant to
section 9001 of the Resource Conservation and Recovery Act, as amended,
42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6991) ("RCRA") or
(viii) otherwise regulated under the Toxic Substances Control Act,
15 U.S.C. Section 2601, et seq., the Clean Air Act, as amended,
42 U.S.C. Section 7401, et seq., the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. Section 1801, et seq., or the Federal
Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C.
Section 136, et seq; or other Governmental Requirement provided,
however, the reference
2
to specific statutory or other general legal references contained
within this definition shall be construed as those statutes in
effect on the date of this Agreement.
(v) "HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, together with all rules and regulations promulgated
thereunder.
(w) "INDEMNIFIED PERSON" shall have the meaning specified in SECTION 10.3.
(x) "INDEMNIFYING PERSON" shall have the meaning specified in SECTION 10.3.
(y) "INVENTORIES" means all inventories used or held for use in connection
with the Business, including without limitation, finished goods,
work-in-progress and raw materials.
(z) "IRS" means the Internal Revenue Service.
(aa) "LIABILITY" means any debt, obligation, duty, liability or obligation
of any nature (including any guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation or responsibility, whether or not
accrued, absolute, undisclosed, unfixed, unliquidated, unsecured,
unmatured, unaccrued, contingent, conditional, inchoate, implied,
vicarious, joint, several or secondary liability), regardless of whether
such debt, obligation, duty, liability or obligation would be required
to be disclosed on a balance sheet prepared in accordance with GAAP.
(bb) "LIEN" means any mortgage, pledge, hypothecation, assignment, deposit,
arrangement, encumbrance, lien (statutory or otherwise), security
interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
(cc) "LOSS" means any loss, damage, injury, Liability, claim, demand,
Proceeding, settlement judgment, award, punitive damage, award, fine,
penalty, Tax, fee, charge, cost or expense (including, without limitation,
costs of attempting to avoid or in opposing the imposition thereof,
interest, penalties, costs of preparation and investigation, and the
fees, disbursements and expenses of attorneys, accountants and other
professional advisors). In calculating the dollar amount of any Loss,
an allowance shall be made for any insurance proceeds or other amounts,
including any Tax benefits, that may be recovered in connection therewith
(subject to reduction for any premium relating thereto).
(dd) "MATERIAL ADVERSE EFFECT" shall mean any material adverse change in the
condition (financial or otherwise), assets, Liabilities, reserves,
business, or results of operations of the Business.
(ee) "PBGC" means the Pension Benefit Guaranty Corporation.
(ff) "PERMITTED LIEN" means the following:
(i) Liens for taxes not due or due but not yet delinquent or which are
being contested in good faith by appropriate proceedings and for
which adequate reserves have been established;
(ii) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising as required in the conduct of its
Business and not overdue for a period of more than sixty (60) days
or which are being contested in good faith by appropriate
proceedings and other non-consensual Liens arising as required in
the conduct of its Business and removed within thirty (30) days
of the date on which the entity on whose property the Lien is
imposed knows or reasonably should have known of the existence
thereof or which are being contested in good faith by appropriate
proceedings, in each case for which adequate reserves have been
established;
3
(iv) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred as required in the ordinary course of the Business.
consistent with past practice;
(v) easements, rights-of-way, restrictions and other similar
encumbrances incurred as required in the conduct of its Business
which, in the aggregate, are not substantial in amount and which
do not in any case materially detract from the value of the
property subject thereto or materially interfere with
the ordinary conduct of the business of the entity on whose
property the Lien is imposed; or
(vi) Equipment Leases entered into in the ordinary course of the
Business, consistent with past practice (all of which are listed
in the Disclosure Schedule in accordance with SECTION 2.11).
(gg) "PROCEEDING" shall have the meaning specified in SECTION 2.10.
(hh) "PURCHASERS" shall have the meaning specified in the Preamble and
shall include permitted successors and assigns of Purchasers.
(ii) "PURCHASERS' CALCULATION OF NET ASSET VALUE" shall have the meaning
set forth in SECTION 4.5.
(jj) "PURCHASERS' INDEMNIFIED PERSONS" shall have the meaning set forth in
SECTION 10.1.
(kk) "REAL PROPERTY LEASES" means all leases covering real property used
or held for use in the Business.
(ll) "SELLER" shall have the meaning set forth in the Preamble and shall
include permitted successors and assigns of any Seller.
(mm) "SELLER'S INDEMNIFIED PERSONS" shall have the meaning set forth in
SECTION 10.2.
(nn) "SUBSIDIARY" means, when used with reference to a particular person
any corporation, a majority of the outstanding voting securities of
which is owned or controlled directly or indirectly by such person,
or if less than a majority of such voting securities are so owned
or controlled, any corporation in regard to which such person
possesses, directly or indirectly, the power to direct or cause the
direction of management and policies of such corporation. Any
partnership, joint venture or other enterprise shall be a Subsidiary
of a particular person, if that person has, directly or indirectly,
a 50% or greater equity interest or in regard to which such person
possesses, directly or indirectly, the power to direct or cause the
direction of management and policies of such entity.
(oo) "TAX CODE" means the Internal Revenue Code of 1986, as amended.
(pp) "TAXES" means any federal, state, local or foreign taxes, assessments,
duties, levies, fees or other governmental charge or impositions.
(qq) "WARN" means the federal Workers Adjustment, Retraining and
Notification Act, as amended.
(rr) "XXXXXX EMPLOYEES" shall have the meaning set forth in SECTION 11.1(a).
4
