EXHIBIT 2.01
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PURCHASE AGREEMENT
BY AND AMONG
BOBCAT PRESSURE CONTROL, INC., XXXXX XXX XXXX COMPANY,
XXXXX XXX XXXX, XXXX XXXXXXXX,
XXXXX XXXXXXXX AND PETRO CAPITAL I, L.P.
AND
BLACK WARRIOR WIRELINE CORP.
DATED AS OF DECEMBER 16, 2005
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................................1
ARTICLE II PURCHASE OF EQUITY INTERESTS..........................................................................1
Section 2.1 The Purchase......................................................................................1
Section 2.2 Payment of the Consideration......................................................................2
Section 2.3 Withholding Rights................................................................................2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF HOLDERS............................................................2
Section 3.1 Corporate Organization; Qualification; Subsidiaries of Bobcat.....................................2
Section 3.2 Corporate Organization; Qualification; Subsidiaries of CuddCo.....................................2
Section 3.3 Capitalization....................................................................................3
Section 3.4 Corporate Authorization...........................................................................3
Section 3.5 Noncontravention; Approvals and Consents..........................................................4
Section 3.6 Financial Statements; Absence of Undisclosed Liabilities..........................................4
Section 3.7 Absence of Certain Changes........................................................................5
Section 3.8 Litigation........................................................................................7
Section 3.9 Taxes.............................................................................................7
Section 3.10 Employee Benefits................................................................................9
Section 3.11 Labor Matters...................................................................................11
Section 3.12 Compliance with Laws............................................................................11
Section 3.13 Permits.........................................................................................12
Section 3.14 Environmental...................................................................................12
Section 3.15 Brokers and Finders.............................................................................12
Section 3.16 Affiliate Transactions..........................................................................13
Section 3.17 Intellectual Property...........................................................................13
Section 3.18 Material Contracts..............................................................................14
Section 3.19 Real Property...................................................................................16
Section 3.20 Accounts Payable and Inventory..................................................................16
Section 3.21 Accounts Receivable.............................................................................16
Section 3.22 Major Suppliers and Customers...................................................................17
Section 3.23 Personnel.......................................................................................17
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Section 3.24 Assets..........................................................................................17
Section 3.25 Insurance.......................................................................................17
Section 3.26 Minute Books....................................................................................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER..............................................................18
Section 4.1 Corporate Organization; Foreign Qualification....................................................18
Section 4.2 Corporate Authorization..........................................................................18
Section 4.3 Noncontravention; Approvals and Consents.........................................................18
Section 4.4 Brokers and Finders..............................................................................19
Section 4.5 Investment Intent................................................................................19
ARTICLE V CLOSING...............................................................................................19
Section 5.1 Closing..........................................................................................19
Section 5.2 Deliveries of Bobcat, CuddCo and Holders.........................................................19
Section 5.3 Deliveries of the Buyer..........................................................................21
ARTICLE VI SURVIVAL AND INDEMNITY...............................................................................21
Section 6.1 Survival of Representations and Warranties.......................................................21
Section 6.2 Indemnification by the Holders...................................................................22
Section 6.3 Indemnification by the Buyer.....................................................................22
Section 6.4 Defense of Claims................................................................................22
Section 6.5 Indemnification Deductible.......................................................................23
Section 6.6 Limitations on Indemnification...................................................................23
Section 6.7 Other Matters Pertaining to Indemnification......................................................23
ARTICLE VII MISCELLANEOUS.......................................................................................24
Section 7.1 Notices..........................................................................................24
Section 7.2 Fees and Expenses................................................................................25
Section 7.3 Officers' and Directors' Insurance...............................................................26
Section 7.4 Amendments; No Waivers...........................................................................26
Section 7.5 Further Assurances...............................................................................26
Section 7.6 Successors and Assigns...........................................................................28
Section 7.7 Counterparts; Effectiveness......................................................................28
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Section 7.8 Third Party Beneficiaries........................................................................28
Section 7.9 Governing Law....................................................................................28
Section 7.10 Jurisdiction....................................................................................28
Section 7.11 Entire Agreement................................................................................28
Section 7.12 Authorship......................................................................................29
Section 7.13 Severability....................................................................................29
Section 7.14 Headings; Construction..........................................................................29
Section 7.15 Ordinary Course Bonuses.........................................................................29
Annex I Glossary.......................................................................................Annex I - 1
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 16th day of December, 2005 (the "Effective Date"), by and among Bobcat
Pressure Control, Inc., an Oklahoma corporation ("Bobcat"), Xxxxx Xxx Xxxx
Company, an Oklahoma corporation ("CuddCo"), Xxxxx Xxx Xxxx ("Xxxx"), Xxxx
Xxxxxxxx ("Xxxxxxxx"), Xxxxx Xxxxxxxx ("Xxxxxxxx"), and Petro Capital I, L.P., a
Texas limited partnership ("Petro"), and Black Warrior Wireline Corp., a
Delaware corporation (the "Buyer"). Cudd, Benedick, Xxxxxxxx and Xxxxx are
collectively referred to herein as the "Holders."
PRELIMINARY STATEMENTS
A. Holders own all of the Equity Interests (as hereafter defined) of
Bobcat.
B. Bobcat holds all of the Equity Interests of CuddCo.
C. Holders, Bobcat and Buyer have heretofore entered into that certain
letter agreement dated September 19, 2005 (the "LOI").
D. Holders desire to sell to Buyer, and Buyer desires to purchase from
Holders, all of the Equity Interests (as hereafter defined) of Bobcat (which
owns all of the capital stock of CuddCo).
E. Concurrent with the execution and delivery of this Agreement, Xxxxx
Xxx Xxxx and Xxxxxx Xxxxxxxx as Co-Trustees under that certain Voting Trust
Agreement dated November 22, 2004 (the "Voting Agreement") shall terminate and
cancel the Voting Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the preliminary statements above
and of the mutual agreements, covenants, representations, and warranties
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, each intending
to be legally bound, hereby agree that the LOI is terminated and further agree
as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in the Glossary attached hereto as Annex I.
ARTICLE II
PURCHASE OF EQUITY INTERESTS
Section 2.1 The Purchase. Buyer hereby purchases from Holders, and
Holders hereby sell to Buyer, all of the Equity Interests in Bobcat for a
purchase price of Fifty-One Million Five Hundred Thousand Dollars ($51,500,000)
in cash, less the amount of Long Term Debt (as hereafter defined) (the
"Consideration"). "Long Term Debt" means the combination of Long
PURCHASE AGREEMENT 1
Term Debt and Current Maturities of Long Term Debt as set forth on the Company
Balance Sheet (as hereafter defined) and as updated to Closing using the Company
financial statements as of the end of the month immediately prior to Closing,
plus any prepayment fees required to prepay all such indebtedness on the Closing
Date. "Company Balance Sheet" means consolidated balance sheet for Bobcat
Pressure Control, Inc. as of June 30, 2005 as audited by BKD, LLP ("BKD").
Section 2.2 Payment of the Consideration. Schedule 2.2 lists the amount
of the Consideration payable to each Holder. At the Closing, Buyer shall pay the
Consideration to the Holders by wire transfer of immediately available funds in
accordance with, and to the accounts designated on, Schedule 2.2.
Section 2.3 Withholding Rights. For any Holder that does not supply the
required Federal Tax Identification Number, Buyer shall be entitled to deduct
and withhold from the Consideration otherwise payable hereunder to any Holder
any amounts that Buyer is required to deduct and withhold with respect to
payment under any provision of federal, state, local or foreign Tax Law. To the
extent that amounts are so withheld, the withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the Holder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDERS
Except as disclosed in the Schedules attached to this Agreement with
specific reference to the particular section or subsection of this Agreement to
which the information set forth in such disclosure Schedule relates, each of the
Holders severally (and not jointly) represents and warrants to Buyer as set
forth below:
Section 3.1 Corporate Organization; Qualification; Subsidiaries of
Bobcat. Bobcat is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Oklahoma, and has all corporate power
and authority required to own, lease and operate its properties and to carry on
its business as now conducted. Bobcat is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned, leased or operated by it or the nature of its
activities makes qualification necessary, except where the failure to be so
qualified would not reasonably be expected to have a Material Adverse Effect.
Bobcat has made available to Buyer true, complete and correct copies of its
Certificate of Incorporation and its Bylaws, each as in effect as of the date
hereof (respectively, the "Bobcat Charter" and "Bobcat Bylaws"). Bobcat has one
wholly owned Subsidiary, namely CuddCo.
Section 3.2 Corporate Organization; Qualification; Subsidiaries of
CuddCo. CuddCo is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Oklahoma, and has all corporate power
and authority required to own, lease and operate its properties and to carry on
its business as now conducted. CuddCo is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned, leased or operated by it or the nature of its
activities makes qualification necessary, except where the failure to be so
qualified would not reasonably be expected to have a Material Adverse Effect.
CuddCo has made available to Buyer true, complete and correct copies
PURCHASE AGREEMENT 2
of its Certificate of Incorporation and its Bylaws, each as in effect as of the
date hereof (respectively, the "CuddCo Charter" and "CuddCo Bylaws"). CuddCo has
no Subsidiaries.
Section 3.3 Capitalization.
(a) The authorized capital stock of Bobcat consists solely of
212,625 shares of common stock, par value $0.01 per share, and 100,000
shares of preferred stock, par value $0.001 per share. As of the date
hereof, (i) 100,000 shares of common stock are issued, of which 100,000
shares are outstanding and no shares are held by Bobcat in treasury,
(ii) 109,951.71 shares of common stock are issuable upon the exercise
of outstanding Warrants, none of which may be exercised for an amount
less than $0.016 per share of common stock, and (iii) no shares of
preferred stock are issued and outstanding. All of the issued and
outstanding shares of capital stock of Bobcat have been duly authorized
and validly issued and are fully paid and nonassessable and free of
preemptive or similar rights.
(b) The authorized capital stock of the CuddCo consists solely
of 1,000 shares of common stock, par value $1.00 per share, and no
shares of preferred stock. As of the date hereof, (i) 1,000 shares of
common stock are issued, of which 1,000 shares are outstanding and no
shares are held by CuddCo in treasury, and (ii) no shares of preferred
stock are issued and outstanding. All of the issued and outstanding
shares of capital stock of CuddCo have been duly authorized and validly
issued and are fully paid and nonassessable and free of preemptive or
similar rights. All Equity Interests of CuddCo are held by Bobcat.
(c) Except as set forth in Section 3.3(a) and Section 3.3(b)
and as contemplated by this Agreement, neither Bobcat nor CuddCo has
issued any Equity Interests and there are no outstanding agreements or
other obligations of Bobcat or CuddCo to issue, sell, repurchase,
redeem or otherwise acquire any Equity Interests in Bobcat or CuddCo.
Except for the Voting Agreement, there are no other shareholders
agreements, voting trusts, proxies or similar agreements to which
Bobcat or CuddCo, any holder of Equity Interests in Bobcat or CuddCo is
a party or by which any of the Equity Interests in Bobcat or CuddCo are
bound.
(d) Schedule 3.3(d) sets forth a complete and accurate list of
all Equity Interests of Bobcat and CuddCo (including shares of stock
and Warrants) as of the date hereof, which list sets forth the name of
the holders thereof and, to the extent applicable, the exercise price,
purchase price or conversion price thereof, the number of shares of
stock subject thereto, the vesting period, exercise and expiration date
thereof, and identifies the governing or granting agreement thereof.
Section 3.4 Corporate Authorization. Bobcat and CuddCo have all
corporate power and authority to execute and deliver this Agreement and to
perform their respective obligations hereunder. The execution, delivery and
performance of this Agreement and the other transactions contemplated hereby,
have been duly and validly authorized by the board of directors of each of
Bobcat and CuddCo and no other corporate proceedings on the part of Bobcat or
CuddCo are necessary to authorize or consummate this Agreement or the other
PURCHASE AGREEMENT 3
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Bobcat and CuddCo, and (assuming the due
authorization, execution and delivery hereof by the other parties) constitutes
the legal, valid and binding obligation of Bobcat and CuddCo, enforceable
against Bobcat and CuddCo in accordance with its terms, except as may be limited
by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
the rights of creditors generally and general principles of equity.
Section 3.5 Noncontravention; Approvals and Consents.
(a) Except as set forth in Schedule 3.5(a), the execution,
delivery and performance by Bobcat of this Agreement and the other
transactions contemplated hereby, do not and will not contravene,
conflict with, constitute a violation or breach of, constitute (with or
without notice or lapse of time or both) a default under, result in or
give to any Person any right of payment or reimbursement, termination,
cancellation, modification or acceleration, loss of a material benefit
under or result in the creation or imposition of any Lien upon any of
the assets or properties of Bobcat or CuddCo under, any of the terms,
conditions or provisions of (i)(A) the Bobcat Charter or the Bobcat
Bylaws or (B) the CuddCo Charter or the CuddCo Bylaws, subject to the
actions described in Section 3.5(b), (ii) any Laws binding upon or
applicable to Bobcat or CuddCo or by which any of their respective
assets or properties are bound, (iii) any Contract to which Bobcat or
CuddCo is a party or by which any of their respective assets or
properties are bound, or (iv) any Permit, excluding from the foregoing
clauses (i), (ii) and (iii) contraventions, conflicts, violations,
breaches, defaults, rights of payment or reimbursement, terminations,
cancellations, modifications, accelerations, loss of benefits under and
creations and impositions of Liens that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect (but not excluding any conflicts, violations, breaches,
defaults, rights of payment or reimbursement, terminations,
cancellations, modifications, accelerations and creations or
impositions of Liens under any Material Contract).
(b) Except as set forth in Schedule 3.5(b), no consent,
waiver, approval or action of, filing with or notice to any
Governmental Entity or Third Party is necessary or required under any
of the terms, conditions or provisions of any Law or any Contract to
which Bobcat or CuddCo are a party or by which any of their respective
assets or properties are bound for the execution, delivery and
performance by Bobcat or CuddCo of this Agreement and the other
transactions contemplated hereby, excluding from the foregoing such
consents, waivers, approvals, actions, filings and notices that the
failure to make or obtain, as the case may be, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Affect (but not excluding any consents, approvals, actions, filings and
notices necessary or required under any Material Contract).
Section 3.6 Financial Statements; Absence of Undisclosed Liabilities.
(a) The audited consolidated financial statements for each of
the three (3) years ended June 30, 2003, 2004 and 2005 (attached hereto
as Schedules 3.6(a)(1), 3.6(a)(2) and 3.6(a)(3), respectively) (the
"Audited Financial Statements") and unaudited
PURCHASE AGREEMENT 4
interim consolidated financial statements for the three (3) months
ended September 30, 2005 (attached hereto as Schedule 3.6(a)(4)) (the
"Unaudited Financial Statements") of Bobcat and CuddCo (including the
notes thereto) (i) were prepared in accordance with GAAP consistently
applied throughout the periods involved (except as may be indicated
therein or in the notes thereto) and (ii) fairly present the financial
position of Bobcat as at the respective dates thereof and the results
of its operations and cash flows for the respective periods then ended
(except, in the case of the Unaudited Financial Statements, for normal
year-end adjustments and the absence of footnotes). True and correct
copies of the Audited Financial Statements and Unaudited Financial
Statements have been delivered to Buyer.
(b) Except as set forth in Schedule 3.6(b), there are no
liabilities or obligations of Bobcat or CuddCo of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of
circumstances that would reasonably be expected to result in such
liabilities or obligations, other than (i) liabilities or obligations
disclosed, provided for or reserved against in the Bobcat Balance Sheet
or disclosed in the notes thereto, or (ii) liabilities or obligations
incurred after the Balance Sheet Date in the Ordinary Course.
Section 3.7 Absence of Certain Changes. Since June 30, 2005, except as
set forth in Schedule 3.7, Bobcat and CuddCo each has conducted its respective
businesses in the Ordinary Course and there has been no event, occurrence or
development, that individually or in the aggregate, constitutes or would be
reasonably expected to have a Material Adverse Effect. Without limiting the
generality of the foregoing, since June 30, 2005, except as set forth in
Schedule 3.7 and except as contemplated by this Agreement, there has not been:
(i) any amendment or change in the Bobcat Charter or
Bobcat Bylaws;
(ii) any amendment or change in the CuddCo Charter or
CuddCo Bylaws;
(iii) any material change by Bobcat or CuddCo in each
of their respective accounting methods, principles or
practices;
(iv) any material Tax election, any change in method
of accounting with respect to Taxes or any compromise or
settlement of any proceeding with respect to any material Tax
liability;
(v) any declaration, setting aside or payment of any
dividend or distribution (whether in cash, stock or property)
or capital return in respect of any Equity Interest or any
redemption, purchase or other acquisition of any Equity
Interests in either Bobcat or CuddCo, or any amendment of any
material term of any Equity Interest;
(vi) any sale, assignment, transfer, lease or other
disposition or agreement to sell, assign, transfer, lease or
otherwise dispose of any of the assets of the Company or
CuddCo other than in the Ordinary Course;
PURCHASE AGREEMENT 5
(vii) any acquisition (by merger, consolidation, or
acquisition of stock or assets) by Bobcat or CuddCo of any
corporation, partnership or other business organization or
division thereof or any Equity Interest therein for
consideration, or any loan or advance to any Person;
(viii) any incurrence of, guarantee with respect to,
or provision of credit support for, any indebtedness by Bobcat
or CuddCo any creation or assumption by Bobcat or CuddCo of
any Lien on any material asset;
(ix) (A) any employment, deferred compensation,
severance or similar agreement entered into or amended by
Bobcat or CuddCo and any employee, (B) any increase in the
compensation payable or to become payable by Bobcat or CuddCo
to any of their respective directors or officers or generally
applicable to all or any category of Bobcat's or CuddCo's
employees, (C) except in the Ordinary Course, any increase in
the coverage or benefits available under any vacation pay,
company awards, salary continuation or disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with any of the directors of
officers of Bobcat or CuddCo or generally applicable to all or
any category of Bobcat's or CuddCo's employees or (D)
severance pay arrangements made to, for or with such
directors, officers or employees other than, in the case of
clauses (B) and (C) of this Section 3.7(ix) and only with
respect to employees who are not officers or directors of
Bobcat or CuddCo, increases in the Ordinary Course and that in
the aggregate have not resulted in a material increase in the
benefits or compensation expense of Bobcat or CuddCo;
(x) any loan, advance or capital contribution made by
Bobcat or CuddCo to, or investment in, any Person other than
loans, advances or capital contributions, or investments of
Bobcat or CuddCo made in the Ordinary Course;
(xi) any waiver, direct or indirect, by Bobcat or
CuddCo of (A) any right or rights of material value or (B) any
payment of any material debt, liability or other obligation,
except for waivers made in the Ordinary Course;
(xii) any payment, loan or advance of any amount to
or in respect of, or the sale, transfer or lease of any
properties or assets (whether real, personal or mixed,
tangible or intangible) to, or entering into of any agreement,
arrangement, or transaction with or on behalf of, any officer
or director of Bobcat or CuddCo or any Affiliate of Bobcat or
CuddCo or a Holder, or any business or entity in which Bobcat
or CuddCo or any Affiliate of Bobcat or CuddCo has any
material, direct or indirect, interest, except payment of
directors' fees and compensation to the officers and employees
of Bobcat or CuddCo in the Ordinary Course, advancement or
reimbursement of expenses in the Ordinary Course and rent paid
on real estate pursuant to the Leases (as hereafter defined);
(xiii) any issuance, sale or disposition of any
capital stock or other Equity Interest in Bobcat or CuddCo or
issuance or grant of any options, warrants
PURCHASE AGREEMENT 6
or other rights to purchase any such capital stock or Equity
Interest or any securities convertible into or exchangeable
for such capital stock or Equity Interest or any other change
in the issued and outstanding capitalization of Bobcat or
CuddCo;
(xiv) any amendment, alteration or modification in
the terms of any currently outstanding options, warrants or
other rights to purchase any capital stock or Equity Interest
in Bobcat or CuddCo or any securities convertible into or
exchangeable for such capital stock or Equity Interest,
including, without limitation, any reduction in the exercise
or conversion price of any such rights or securities, any
change to the vesting or acceleration terms of any such rights
or securities, or any change to terms relating to the grant of
any such rights or securities;
(xv) any capital expenditures in excess of $100,000;
(xvi) any amendment, alteration or modification in
the terms of any currently outstanding Leases; or
(xvii) any amendment, alteration or modification in
the terms of any currently outstanding loans, including,
without limitation, any increase in the interest rate, or any
change to the payment terms; or
(xviii) any amendment, alteration or modification in
the terms of any currently outstanding contracts or agreements
with any Affiliate; or
(xix) any agreement to take any of the actions
specified in this Section 3.7, except for this Agreement.
Section 3.8 Litigation. All actions, suits, claims, investigations,
arbitrations or proceedings pending, or to the Knowledge of Bobcat or CuddCo
threatened, against Bobcat or CuddCo or any of their respective assets or
properties before any arbitrator or Governmental Entity and a description
thereof are set forth in Schedule 3.8. There is no action, suit, claim,
investigation, arbitration or proceeding pending, or to the Knowledge of Bobcat
or CuddCo threatened, against Bobcat or CuddCo or any of their respective assets
or properties before any arbitrator or Governmental Entity that has had, or
would be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect, and to the Knowledge of Bobcat and CuddCo, there is no
basis for any such action, suit, claim, investigation, arbitration or
proceeding. Except as set forth in Schedule 3.8, neither Bobcat nor CuddCo nor
any officer, director or employee of either has been permanently or temporarily
enjoined by any order, judgment or decree of any Governmental Entity from
engaging in or continuing any conduct or practice in connection with the
business or assets of Bobcat or CuddCo nor, to the Knowledge of Bobcat nor
CuddCo, is Bobcat or CuddCo or any of their respective officers, directors or
employees under any investigation related to Bobcat's or CuddCo's business by
any Governmental Entity.
Section 3.9 Taxes. Except as set forth in Schedule 3.9, (i) to the
Knowledge of Bobcat or CuddCo, all Tax returns, statements, reports and forms
(collectively, the "Returns") required
PURCHASE AGREEMENT 7
to be filed with any taxing authority by, or with respect to, Bobcat or CuddCo
have been timely filed in accordance with all applicable Laws and Bobcat's and
CuddCo's Returns are true, complete and correct in all material respects; (ii)
Bobcat and CuddCo have timely paid all Taxes due and payable, with the potential
exception of taxes totaling in the aggregate not more than $50,000; (iii) Bobcat
and CuddCo have withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other Third Party; (iv) there is no action,
suit, proceeding, audit or claim now proposed or, to the Knowledge of Bobcat or
CuddCo, pending against Bobcat or CuddCo in respect of any Taxes; (v) neither
Bobcat nor CuddCo are a party to, bound by or obligated under, any Tax sharing,
allocation or indemnity agreement or similar Contract or arrangement or any
Contract that obligates Bobcat or CuddCo to make any payment computed by
reference to the Taxes, taxable income or taxable losses of any other Person;
(vi) there are no Liens with respect to Taxes on any of the assets or properties
of Bobcat or CuddCo; (vii) neither Bobcat nor CuddCo (A) have, and have never
been, a member of an affiliated, consolidated, combined or unitary group, other
than one of which Bobcat was the common parent and (B) do not have any liability
for the Taxes of any Person (other than Bobcat or CuddCo, respectively) under
Treasury Regulation section 1.1502-6 (or any similar provision of Law), or as a
transferee or successor, by Contract or otherwise; (viii) no consent under
former section 341(f) of the Code has been filed with respect to either Bobcat
or CuddCo; (ix) neither Bobcat nor CuddCo have entered into any closing
agreement pursuant to section 7121 of the Code (or any similar provision of
Law); (x) neither Bobcat nor CuddCo have agreed to make and are not required to
make any adjustment under section 481(a) of the Code (or any similar provision
of Law) by reason of a change in accounting method or otherwise; (xi) no waivers
of statutes of limitation with respect to any Returns have been given by or
requested from Bobcat or CuddCo that remains outstanding and there are no
outstanding powers of attorney with respect to any Tax; (xii) all deficiencies
asserted or assessments made as a result of any examinations of Bobcat or CuddCo
have been fully paid or are being actively contested and an adequate reserve
therefor has been established in accordance with GAAP and is fully reflected in
the balance sheets dated June 30, 2005; (xiii) neither Bobcat nor CuddCo have
received written notice from any Governmental Entity in a jurisdiction in which
either Bobcat or CuddCo did not file a Tax return stating that they are or may
be subject to taxation by that jurisdiction; (xiv) none of the assets of either
Bobcat or CuddCo are property required to be treated as being owned by any other
Person pursuant to the "safe harbor lease" provisions of former section
168(f)(8) of the Code; (xv) none of the assets of Bobcat or CuddCo directly or
indirectly secures any debt the interest on which is tax-exempt under section
103(a) of the Code; (xvi) none of the assets of Bobcat or CuddCo are "tax-exempt
use property" (within the meaning of section 168(h) of the Code) or "tax exempt
bond financed property" (within the meaning of section 168(g) of the Code);
(xvii) no debt obligation of either Bobcat or CuddCo constitutes "corporate
acquisition indebtedness" (within the meaning of section 279(b) of the Code);
(xviii) no issue has arisen in any audit or examination of Bobcat or CuddCo for
any Tax matter by any Governmental Entity that, if raised after the Closing and
upheld, would result in a deficiency or a reduction in Bobcat's or CuddCo's net
operating loss carryovers; (xix) the Company has disclosed on its federal
Company Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax (within the meaning of section
6662 of the Code).
PURCHASE AGREEMENT 8
Section 3.10 Employee Benefits.
(a) Except as set forth in Schedule 3.10(a), the Company does
not maintain, administer, sponsor or otherwise have any liability with
respect to (i) any "employee benefit plan", as defined in section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), (ii) any other plan, program, policy or arrangement (written
or oral) whether or not subject to ERISA (including any funding
mechanism therefor now in effect or required) providing for retirement,
bonuses or other incentive compensation, profit-sharing, stock option,
stock purchase, restricted stock, stock unit, other stock related
rights, deferred compensation, vacation, health or medical benefits,
life insurance, disability benefits, cafeteria (section 125), workers'
compensation, supplemental unemployment benefits, severance benefits,
salary continuation, leave of absence or other fringe benefits, or
(iii) employment, consulting, termination, retention, severance, or
change of control agreement or arrangement, in each case which covers
any current or former employee or director of the Company. The items
required to be listed in Schedule 3.10(a) are referred to collectively
herein as the "Company Employee Plans."
(b) The Company has delivered to Buyer current, accurate and
complete copies of the following documents with respect to each Company
Employee Plan(as applicable) (i) any plans and related trust documents,
insurance contracts or other funding arrangements and all amendments
thereto, (ii) the most recent summary plan description and summary of
material modification, and (iii) for the two most recent plan years (A)
the Forms 5500 and attached schedules, (B) audited financial statements
and (C) actuarial valuation reports.
(c) None of the Company Employee Plans is subject to title IV
of ERISA or section 412 of the Code Neither the Company nor any ERISA
Affiliate has ever had any liability (whether absolute or contingent)
under title IV of ERISA or under section 412 of the Code. An "ERISA
Affiliate" means any Person that would be treated as a single employer
with the Company under section 414(b), (c), (m) or (o) of the Code.
(d) Each Company Employee Plan that is intended to be
qualified under section 401(a) of the Code has received one or more
determination letters from the Internal Revenue Service that said Plan
is qualified and has been qualified during the period from its adoption
to date, and each trust forming a part thereof is exempt from Tax
pursuant to section 501(a) of the Code, and to the Knowledge of the
Company, nothing has occurred, whether by action or failure to act,
that could reasonably be expected to cause the loss of such
qualification or exemption or the imposition of any material liability,
penalty or tax under ERISA or the Code. The Company has furnished to
Buyer true, complete and correct copies of the most recent Internal
Revenue Service determination letter with respect to each Company
Employee Plan.
(e) Each Company Employee Plan has been maintained in material
compliance with its terms and with the requirements prescribed by any
and all applicable Laws, including ERISA and the Code. All amendments
and actions to bring each of the Company Employee Plans into conformity
with the applicable provisions of ERISA, the Code and other applicable
Laws have been made or taken except to the extent that such
PURCHASE AGREEMENT 9
amendments or actions are not required by Law to be made or taken until
a date after the Closing Date and are disclosed in Schedule 3.10(d).
Nothing has been done or omitted to be done and no transaction or
holding of any asset under or in connection with any Company Employee
Plan has occurred that will make the Company or any officer or director
of the Company subject to any material liability under title I of ERISA
or liable for any material Tax pursuant to section 4975 of the Code
(assuming the taxable period of any such transaction expired as of the
date hereof).
(f) Except as set forth in Schedule 3.10(f), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will, either alone or in combination
with any other event, (i) result in any payment becoming due to any
present or former employee of the Company, (ii) increase any benefits
otherwise payable under any Company Employee Plan, or (iii) result in
the acceleration of the time of payment or vesting of any such payment
or benefit. There is no Contract, Company Employee Plan or other
arrangement covering any employee or former employee of the Company
that, individually or collectively, could give rise to the payment of
any amount that would not be deductible pursuant to the terms of
sections 162(m) or 280G of the Code.
(g) Except as set forth in Schedule 3.10(g), there has been no
amendment to, written interpretation or announcement (whether or not
written) relating to, or change in employee participation or coverage
under, any Company Employee Plan that would increase the expense of
maintaining such Company Employee Plan above the level of the expense
incurred in respect thereof for the year ended June 30, 2005.
(h) The Company has no, and has never had any, obligation or
liability (contingent or otherwise) with respect to any retiree health
insurance, life insurance or other welfare benefits under any Company
Employee Plan, other than as mandated by section 4980B of the Code or
under applicable Law and at the expense of the participant or the
participant's beneficiary. Each Company Employee Plan may be amended or
terminated in accordance with the amendment or termination provisions
of said Plan without incurring any liability thereunder to the Company.
(i) No Company Employee Plan is under audit or is the subject
of an audit or investigation by the Internal Revenue Service, the
Department of Labor or any other Governmental Entity, nor, to the
Knowledge of the Company, is any such audit or investigation pending.
No actions, suits, termination proceedings or claims (other than
routine claims for benefits in the Ordinary Course) are pending or, to
the Knowledge of the Company, threatened with respect to any Company
Employee Plan, the assets of any Company Employee Plan, or the plan
administrator or any fiduciary of any Company Employee Plan with
respect to the operation of such plan, and to the Knowledge of the
Company, there are no facts or circumstances existing that could
reasonably be expected to give rise to any such actions, suits,
termination proceedings or claims.
PURCHASE AGREEMENT 10
Section 3.11 Labor Matters.
(a) The Company is not a party to any labor or collective
bargaining agreement, and no employees of the Company are represented
by any labor or similar organization. Within the preceding three years,
there have been no representation or certification proceedings, or
petitions seeking a representation proceeding, pending, or to the
Knowledge of the Company, threatened to be brought or filed with the
National Labor Relations Board or any other labor relations tribunal or
authority. Within the preceding three years there have been no
organizing activities involving the Company in respect of any group of
employees of the Company.
(b) There are no strikes, work stoppages, slowdowns, lockouts,
arbitrations or grievances or other labor disputes pending, or to the
Knowledge of the Company threatened, against or involving the Company.
There are no unfair labor practice charges, grievances or complaints
pending, or to the Knowledge of the Company threatened, by or on behalf
of any employee or group of employees of the Company, and, to the
Knowledge of the Company, there is no basis for any such charges,
grievances or complaints.
(c) There are no charges, grievances, complaints or claims
against the Company pending or, to the Knowledge of the Company,
threatened to be brought or filed with any Governmental Entity or
arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment of any Person
by the Company, and, to the Knowledge of the Company, there is no basis
for any such charges, grievances, complaints or claims.
(d) To the Knowledge of the Company, all employees of the
Company possess all applicable passports, visas, permits and other
authorizations required by all applicable immigration or similar Laws
to be employed by and to perform services for and on behalf of the
Company. The Company has complied in all material respects with all
applicable immigration and similar Laws.
(e) Except as set forth in Schedule 3.11(e), the Company does
not employ any leased employees or independent contractors with respect
to the business of the Company.
Section 3.12 Compliance with Laws. The Company is not in material
violation of, and has not materially violated, any applicable provisions of any
Laws. The Company has not received written notice of and, to the Knowledge of
the Company, the Company is not being investigated with respect to, and has not
been threatened to be charged with or given notice of, any material violation of
any applicable Law. To the Knowledge of the Company, none of the Company or any
directors, officers, agents or employees of the Company has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
related to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or (iii) made any other unlawful payment.
PURCHASE AGREEMENT 11
Section 3.13 Permits. Except as set forth in Schedule 3.13-1 (or as set
forth in Schedule 3.14 with respect to Environmental Permits), the Company has,
maintains in full force and effect, and is in material compliance with, all
Permits required by the Company to own, lease and operate its properties and to
carry on its businesses as currently conducted. Schedule 3.13-2 sets forth all
actions, proceedings or investigations, pending, or to the Knowledge of the
Company, threatened against the Company that could be reasonably be expected to
result in the suspension, loss or revocation of any Permit.
Section 3.14 Environmental. Except as set forth in Schedule 3.14:
(a) to the Knowledge of the Company, the Company is and has
been in compliance with all Environmental Laws and the Company has,
maintains in full force and effect, and is in compliance with, all
Environmental Permits for the Company to own, lease and operate its
properties and to carry on its businesses as currently conducted,
except where the failure to so comply with Environmental Laws or to
obtain and comply with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to exceed
$50,000, and all such Environmental Permits held by the Company are
valid, uncontested and in good standing;
(b) to the Knowledge of the Company, the Real Property is, and
any real property previously owned, leased or operated by the Company,
any predecessor, or any company or business acquired by the Company was
during the period of the Company's or any predecessor's ownership,
tenancy or operation thereof, free of contamination by Hazardous
Substances that could reasonably be expected to result in Environmental
Liabilities in excess of $50,000;
(c) there are no investigations, claims or proceedings pending
or, to the Knowledge of the Company, threatened against the Company,
any Real Property, or to the Knowledge of the Company any real property
previously owned, leased or used by or for the Company, any
predecessor, or any company or business acquired by the Company, with
respect to violations of or potential liability under Environmental
Laws or Environmental Permits;
(d) neither the Company nor any predecessor has entered into
or assumed by contract or operation of law or otherwise, any material
obligation, liability, order, settlement, judgment or decree relating
to or arising under Environmental Laws; and
(e) the Company has provided to Buyer copies of all material
existing environmental reports, reviews and audits in the Company's
possession and all written information pertaining to actual or
potential Environmental Liabilities, in each case relating to the
Company, any predecessor or any company or business acquired by the
Company.
Section 3.15 Brokers and Finders. Except for an agreement between
Bobcat and Petro Capital Advisors, LLC ("PCA") providing for compensation to
PCA, the responsibility for payment of which is provided in Section 7.2, there
is no investment banker, financial advisor, broker, finder or other intermediary
that has been retained by, or is authorized to act on behalf of,
PURCHASE AGREEMENT 12
Bobcat or CuddCo that might be entitled to any fee or commission from Bobcat,
CuddCo or Buyer or any of their respective Affiliates upon consummation of the
transactions contemplated by this Agreement.
Section 3.16 Affiliate Transactions. Except as set forth in Schedule
3.16, and except for employment agreements with officers of the Company set
forth in Schedule 3.18(a)(viii), other than for notes and Warrants held by
Affiliates set forth in Schedule 3.16, and except for the Leases (as hereafter
defined) as set forth on Schedule 3.16, there are no Contracts with any (i)
present or former officer or director of Bobcat or CuddCo or any of their
immediate family members, (ii) record or beneficial owner of five percent or
more of any voting securities of Bobcat or CuddCo or (iii) Affiliate of Bobcat,
CuddCo or any Holder.
Section 3.17 Intellectual Property.
(a) Schedule 3.17(a) sets forth an accurate and complete list
of all Patents, registered Marks, pending applications for registration
of Marks, registered Copyrights, pending applications for registration
of Copyrights and domain names owned or filed by Bobcat or CuddCo, and
all unregistered Marks owned or used by Bobcat or CuddCo.. Schedule
3.17(a) lists the record owner of each such item of Intellectual
Property and the jurisdictions in which each such item of Intellectual
Property has been issued or registered or in which each such
application for issuance or registration of such item of Intellectual
Property has been filed.
(b) Except as set forth in Schedule 3.17(b), to their
Knowledge, Bobcat and CuddCo each have all right, title and interest
in, or a valid, binding and continuing license to use, all Intellectual
Property used in their respective businesses as currently conducted,
free and clear of all Liens or obligations to others (other than as
provided in the license for such item). The Intellectual Property owned
by or licensed to Bobcat or CuddCo includes all of the Intellectual
Property necessary to enable Bobcat or CuddCo to conduct their
respective businesses in all material respects in the manner in which
such business is currently being conducted.
(c) The current development, manufacture, reproduction, use,
license, marketing, importation, exportation, offer for sale or sale of
the products or services of Bobcat or CuddCo and the current business
practices and methods of Bobcat or CuddCo do not, to the Knowledge of
Bobcat or CuddCo, infringe, violate or constitute an unauthorized use
or misappropriation of any Intellectual Property of any Person. To the
Knowledge of Bobcat and CuddCo, no Person is infringing,
misappropriating or violating any Intellectual Property owned by or
exclusively licensed to either Bobcat or CuddCo, and no such claims
have been made against any Person by either Bobcat or CuddCo.
(d) To the Knowledge of Bobcat and CuddCo, no claims have been
asserted or threatened against either Bobcat or CuddCo by any Person
challenging Bobcat's or CuddCo's ownership or use of any such
Intellectual Property or the validity, effectiveness or enforceability
of any such Intellectual Property.
PURCHASE AGREEMENT 13
(e) No material Trade Secret of Bobcat or CuddCo has been
authorized to be disclosed or, to the Knowledge of Bobcat or CuddCo,
has been actually disclosed by Bobcat or CuddCo to any employee or any
other Person other than pursuant to a written non-disclosure agreement
including restrictions on the disclosure and use of such Trade Secrets.
Bobcat and CuddCo have taken reasonable security measures (as
determined by the industry in which Bobcat and CuddCo operate) to
protect the secrecy and confidentiality of all material Trade Secrets
of Bobcat or CuddCo.
(f) There are no orders, judgments, decrees, writs, rulings,
arbitration awards, settlement agreements or stipulations to which
Bobcat or CuddCo are a party or by which Bobcat or CuddCo are bound
that restrict their rights to use any Intellectual Property used by
either Bobcat or CuddCo in the operation of their respective businesses
as currently conducted.
(g) The consummation of the transactions contemplated hereby
will not result in the loss or impairment of Buyer's right to own or
use any Intellectual Property used in the business of Bobcat or CuddCo
as currently conducted.
Section 3.18 Material Contracts.
(a) Schedule 3.18 sets forth a true, complete and correct list
of the following Contracts to which the Company is a party or by which
its assets or properties is bound (collectively, the "Material
Contracts"):
(i) Contracts the performance of which could
reasonably be expected to require net payments by or receipts
to the Company in excess of $100,000 in any calendar year
(excluding employee compensation arrangements);
(ii) Contracts providing for any future contingent
payment by the Company in excess of $100,000;
(iii) Contracts with any Major Customer or Major
Supplier;
(iv) Contracts containing covenants limiting the
freedom of the Company or any Affiliate of the Company
(including Buyer and its Affiliates after Closing) to
negotiate and enter into this Agreement, engage in any line of
business or compete with any Person, in any product line or
line of business, or operate at any location;
(v) Contracts or other instruments providing for the
borrowing or lending of money, in an amount in excess of
$100,000, whether as borrower, lender or guarantor;
(vi) Contracts relating to joint ventures, alliances,
partnerships, or joint development or similar arrangements
with any Third Party;
(vii) Contracts, consent, royalty or similar
agreements relating to Intellectual Property;
PURCHASE AGREEMENT 14
(viii) Contracts with current or former officers,
directors, consultants, independent contractors or agents for
employment, and all severance, change in control or similar
arrangements with any current or former directors, officers,
employees, consultants, independent contractors or agents that
will result in any obligation (absolute or contingent) of the
Company to make any payment to any current or former
directors, officers, employees, consultants, independent
contractors or agents following either the consummation of the
transactions contemplated hereby, termination of employment
(or the relevant relationship), or both;
(ix) Contracts with any Governmental Entity that have
a remaining term in excess of ninety days or are not
cancelable (without material penalty, cost or other liability)
within ninety days;
(x) Contacts relating to any material Permits;
(xi) Contracts relating to the Real Property;
(xii) Contracts or commitments in which the Company
has granted manufacturing rights or exclusive marketing rights
relating to any product or service, any group of products or
services or any territory;
(xiii) Contracts for the acquisition or sale,
directly or indirectly (by merger or otherwise) of assets
(whether tangible or intangible, other than inventory sold in
the Ordinary Course) or the capital stock of another Person;
or
(xiv) Contracts relating to the capital stock or
other ownership in assets of another Person, including
Contracts containing voting, management, change of control, or
transfer provisions related to such capital stock or other
assets.
(xv) Agreements calling for bonuses paid to any
Holder, or to Xxxx Xxxx, at any time after June 30, 2005 or
for any services performed prior to the Effective Date.
(b) True, complete and correct copies of the written Material
Contracts and descriptions of oral Material Contracts, if any, have
been delivered to Buyer. Each of the Material Contracts is a valid and
binding obligation of the Company and, to the Knowledge of the Company,
enforceable against the Company and the other parties thereto, in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors generally and general principles of equity. Except
for the consummation of the transactions contemplated hereby, no event
has occurred that would, on notice or lapse of time or both, entitle
the holder of any indebtedness issued pursuant to a Material Contract
to accelerate, or that does accelerate, the maturity of any such
indebtedness.
(c) The Company has not received any notice from any Third
Party alleging that the Company is, or, to the Knowledge of the
Company, no Third Party is, in breach, default or violation (each a
"Default") (and no event has occurred or not occurred through
PURCHASE AGREEMENT 15
the Company's inaction or, to the Knowledge of the Company, through the
action or inaction of any Third Parties, which with notice or the lapse
of time or both would constitute a Default) of any term, condition or
provision of any Material Contract.
(d) The Company has not received written notice of the
termination of, or intent to terminate or otherwise fail to fully
perform any Material Contract and otherwise has no reason to believe or
not believe that the parties to any Material Contract will not fulfill
their obligations thereunder in all material respects.
Section 3.19 Real Property. Schedule 3.19 sets forth each parcel of
real property owned, leased or used by the Company (the "Real Property").
Schedule 3.19 also sets forth a true and complete copy of each real estate lease
to which the Company is a party for the locations used by the Company in its
business (the "Leases"). The Company has a valid leasehold interest in the
Leases, free and clear of all Liens other than (i) Liens that do not,
individually or in the aggregate, materially impair the conduct by the Company
of its business thereon or materially detract from the value thereof, (ii) Liens
for Taxes accrued but not yet payable, and (iii) Liens that secure obligations
of the Company under the Credit Agreement. The use of the Real Property by the
Company in its businesses as presently conducted conforms in all material
respects with applicable zoning Laws, regulations and Permits. The Company
enjoys peaceful and undisturbed possession under the Leases for all Real
Property that is leased by the Company.
Section 3.20 Accounts Payable and Inventory. All accounts payable
reflected on the Company Balance Sheet and the unaudited consolidated balance
sheet of the Company as of September 30, 2005 (the "Sept. 30 Balance Sheet")
represent accounts payable for products and services purchased in the Ordinary
Course. All inventory of the Company reflected on the Company Balance Sheet and
the Sept. 30 Balance Sheet consisted, as of such dates, of a quality and
quantity usable and salable in the Ordinary Course. Since each of the Balance
Sheet Date and September 30, 2005, respectively, the Company has (i) only
incurred accounts payable and other current liabilities in the Ordinary Course
and has discharged its accounts payable and other current liabilities in
accordance with past practice and (ii) purchased and maintained inventory in an
amount that it reasonably believes to be appropriate for normal requirements of
its business and current business conditions consistent with past practices. The
inventories of the Company set forth in the June 30, 2005 balance sheet were
determined by quarterly physical count and, to the Company's knowledge, were
valued at the lower of historic cost or market and properly stated therein in
accordance with GAAP consistently applied. Adequate reserves have been reflected
in the Sept. 30 Balance Sheet for obsolete, excess, damaged, slow-moving, or
otherwise unusable inventory, which reserves were calculated in a manner
consistent with past practice and in accordance with GAAP consistently applied.
The inventories of the Company constitute sufficient quantities for the normal
operation of business in accordance with past practice. Schedule 3.20 sets forth
an aging schedule of the Company's accounts payable as of September 30, 2005.
Section 3.21 Accounts Receivable. The accounts and notes receivable
reflected on the Company Balance Sheet and the September, 30 Balance Sheet, and
all accounts or notes receivable arising since September 30, 2005 represent bona
fide claims of the Company against customers for sales made, services performed
or other charges or valid consideration arising on
PURCHASE AGREEMENT 16
or before the date thereof in the Ordinary Course and require no additional
material performance by the Company to render them valid. Any applicable
reserves for returns or doubtful accounts have been reflected in the Sept. 30
Balance Sheet, which reserves are adequate and were calculated in a manner
consistent with past practice and in accordance with GAAP consistently applied.
Except as set forth in Schedule 3.21, the Company has no accounts or loans
receivable from any Affiliate of the Company or from any director, officer,
shareholder or employee of the Company, except for advances for business
expenses incurred in the Ordinary Course and not in excess of $5,000. None of
the accounts or the notes receivable of the Company are subject to any right of
setoff or counterclaims. Schedule 3.21 sets forth an aging schedule of the
Company's accounts receivable as of September 30, 2005.
Section 3.22 Major Suppliers and Customers. Set forth in Schedule
3.22-1 is a list of the 20 largest suppliers and service providers to the
Company based on the dollar value of materials or services purchased by the
Company during the year ended June 30, 2004 and the year ended June 30, 2005
(collectively, the "Major Suppliers"). Set forth in Schedule 3.22-2 is a list of
the 20 largest customers of the Company based on the dollar value of revenue
generated by such customers for each of the year ended June 30, 2004 and the
year ended June 30, 2005 (collectively, the "Major Customers"). There has not
been, nor as a result of the transactions contemplated by this Agreement is
there reasonably anticipated to be, any change in relations with any Major
Customer.
Section 3.23 Personnel.
(a) Set forth in Schedule 3.23(a) is a list setting forth: (i)
the name of each officer of Bobcat, specifying the title of such
officer and the annual salary, bonus, and other compensation that such
officer is currently entitled to receive and (ii) the name of each
director of Bobcat.
(b) Set forth in Schedule 3.23(b) is a list setting forth: (i)
the name of each officer of CuddCo, specifying the title of such
officer and the annual salary, bonus, and other compensation that such
officer is currently entitled to receive and (ii) the name of each
director of CuddCo.
Section 3.24 Assets. Schedule 3.24 includes a complete list of the
assets and properties owned, leased or licensed by the Company. Except as set
forth in Schedule 3.24, the Company has good and marketable title to or a valid
leasehold estate in, free and clear of any Liens, all personal properties and
assets reflected on the Company Balance Sheet at the Balance Sheet Date (except
for properties or assets subsequently sold in the Ordinary Course).
Section 3.25 Insurance. Schedule 3.25 contains a true, complete and
correct list of all insurance policies of the Company (the "Insurance
Policies"), specifying the insurer, coverage, deductible, and term of each
Insurance Policy. Each Insurance Policy is in full force and effect and is
valid, outstanding and enforceable, and all premiums due thereon have been paid
in full. To the Knowledge of the Company, none of the Insurance Policies will
terminate or lapse (or be affected in any other materially adverse manner) by
reason of the transactions contemplated by this Agreement. The Company has
complied in all material respects with the provisions of each Insurance Policy.
To the Knowledge of the Company, no insurer under any Insurance Policy has
PURCHASE AGREEMENT 17
canceled or generally disclaimed liability under any such policy or, indicated
any intent to do so or not to renew any such policy. All claims under the
Insurance Policies have been filed in a timely fashion. Since March 20, 2003,
there have been no gaps in insurance coverage of the Company.
Section 3.26 Minute Books. The minute books of Bobcat and CuddCo
accurately reflect in all respects all material actions taken by written consent
or resolution and meetings held on or after March 20, 2003, by the respective
stockholders, boards of directors and committees of each of them. The stock
record books of Bobcat and CuddCo accurately reflect in all material respects
all transactions in Bobcat's or CuddCo's capital stock of all classes. True,
correct and complete copies of the minute books and stock record books of Bobcat
and CuddCo have been delivered to Buyer prior to the date hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Bobcat, CuddCo and the Holders that:
Section 4.1 Corporate Organization; Foreign Qualification. Buyer is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware. Buyer has all requisite power and authority
required to own, lease and operate its properties and to carry on its business
as now conducted. Buyer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned, leased or operated by it or the nature of its activities
makes qualification necessary. Buyer has heretofore provided to Bobcat and
CuddCo the Buyer's complete and correct copies of its certificate of
incorporation and by-laws (or other organizational documents) as in effect on
the Closing Date.
Section 4.2 Corporate Authorization. Buyer has all requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement and the
other transactions contemplated hereby have been duly and validly authorized by
the board of directors of Buyer and no other corporate proceedings on the part
of Buyer are necessary to authorize or consummate this Agreement or the other
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer, and (assuming the due authorization, execution
and delivery hereof by the other parties) constitutes the legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms, except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
of general principles of equity.
Section 4.3 Noncontravention; Approvals and Consents.
(a) The execution, delivery and performance by Buyer of this
Agreement and the other transactions contemplated hereby do not and
will not contravene, conflict with, constitute a violation or breach
of, constitute (with or without notice or lapse of time or both) a
default under, result in or give to any Person any right of payment or
reimbursement, termination, cancellation, modification or acceleration,
loss of a material
PURCHASE AGREEMENT 18
benefit under or result in the creation or imposition of any Lien upon
any of the assets or properties of Buyer under, any of the terms,
conditions or provisions of (i) the certificate of incorporation or
bylaws of Buyer, or (ii) (A) any Laws binding upon or applicable to
Buyer or by which any of their assets or properties are bound, (B) any
Contract to which Buyer is a party or by which any of their assets or
properties are bound, or (C) any Permit, excluding from the foregoing
clauses (A) and (B) contraventions, conflicts, violations, breaches,
defaults, rights of payment or reimbursement, terminations,
cancellations, modifications, accelerations and creations and
impositions of Liens that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(b) No consent, waiver, approval or action of, filing with or
notice to any Governmental Entity or Third Party is necessary or
required under any of the terms, conditions or provisions of any Law or
any Contract to which Buyer is a party or by which any of its assets or
properties are bound for the execution, delivery and performance by
Buyer of this Agreement and the other transactions contemplated hereby,
excluding from the foregoing such consents, waivers, approvals,
actions, filings and notices that the failure to make or obtain, as the
case may be, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Affect.
Section 4.4 Brokers and Finders. Except for an agreement between Buyer
and Xxxxxxx & Company International ("SCI") providing for compensation to SCI
for which Buyer will be solely responsible, there is no investment banker,
financial advisor, broker, finder or other intermediary that has been retained
by, or is authorized to act on behalf of, Buyer that might be entitled to any
fee or commission from Buyer, Bobcat, CuddCo, the Holders or any of their
respective Affiliates upon consummation of the transactions contemplated by this
Agreement.
Section 4.5 Investment Intent. Buyer is acquiring the Equity Interests
for its own account and not with a view to their distribution within the meaning
of Section 2(11) of the Securities Act of 1933, as amended.
ARTICLE V
CLOSING
Section 5.1 Closing. Closing of the transactions contemplated hereby
shall be held at the offices of [King & Spalding, Atlanta, Georgia] (or such
other place as agreed by the parties) on the date of this Agreement (the
"Closing Date").
Section 5.2 Deliveries of Bobcat, CuddCo and Holders. At the Closing,
Bobcat, CuddCo and the Holders shall deliver or cause to be delivered to the
Buyer:
(a) The original of all documents evidencing the Equity
Interests, together with endorsements or assignments transferring
ownership to Buyer;
(b) a mutually acceptable employment agreement with Buyer,
executed by each of, Xxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxx
Xxxx, Xxxx Xxxxxx, Xxx Xxxxx
PURCHASE AGREEMENT 19
and Xxxx Xxxx, together with a mutually acceptable non-competition agreement
between Buyer and Xxxxx Xxx Xxxx;
(c) resignation letters from all persons who are officers or
directors of Bobcat or CuddCo which evidence each such persons
resignation from their office or directorship effective as of the
Closing (but not their resignation as an employee, if they are to
continue as employees);
(d) Amendment to Woodward, Oklahoma Lease, fully executed;
(e) Amendment to Decatur, Texas Lease, fully executed;
(f) Amendment to Canadian, Texas Lease, fully executed;
(g) Landlord Waivers for each of the Real Property locations,
fully executed;
(h) evidence of the termination or cancellation of the
employment agreements between Bobcat and each of Xxxxx Xxx Xxxx, Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxx Xxxx and Xxx Xxxxx;
(i) written confirmation from Xxxx Xxxx that all bonuses to be
paid to him by Bobcat have been paid and are acceptable;
(j) a legal opinion of counsel to Bobcat, CuddCo and the
Holders;
(k) original certificates of title for all vehicles owned by
Bobcat or CuddCo free and clear of any Liens, and copies of
certificates of title (to the extent available) for all vehicles owned
by Bobcat or CuddCo subject to a Lien;
(l) other consents, waivers, estoppel letters or similar
documentation as the Buyer shall reasonably request;
(m) a payoff letter or other documentation from each Person
that is owed any portion of the Long Term Debt (other than debt on
vehicles), setting forth the amount necessary for Buyer to pay such
indebtedness in full as of the Closing Date; and
(n) a Certificate of an officer of each of Bobcat and CuddCo
certifying:
(i) resolutions of the board of directors of Bobcat
and CuddCo, respectively, granting the president or other duly
authorized officers of Bobcat or CuddCo the authority to
execute this Agreement any and other transaction documents;
(ii) the incumbency relating to the president and
each person executing on behalf of Bobcat and CuddCo any
document executed and delivered to the Buyer pursuant to the
terms hereof; and
PURCHASE AGREEMENT 20
(o) the Assignment of Representations, Warranties, Covenants,
Indemnities from Buyer to General Electric Capital
Corporation, as agent, consented to by Holders.
Section 5.3 Deliveries of the Buyer. At the Closing, the Buyer shall
deliver or cause to be delivered to the Holders:
(a) the Consideration in accordance with Section 2.2;
(b) Amendment to Woodward, Oklahoma Lease, fully executed;
(c) Amendment to Decatur, Texas Lease, fully executed;
(d) Amendment to Canadian, Texas Lease, fully executed;
(e) a legal opinion of counsel to Buyer;
(f) a Certificate of an officer of Buyer certifying:
(i) resolutions of the board of directors of the
Buyer approving this Agreement and the transactions
contemplated hereby and granting the chief executive officer
or the president or other duly authorized officers of Buyer
the authority to execute this Agreement any and other
transaction documents; and
(ii) the incumbency relating to the chief executive
officer or president and each person executing on behalf of
the Buyer any document executed and delivered to the Holders
pursuant to the terms hereof;
ARTICLE VI
SURVIVAL AND INDEMNITY
Section 6.1 Survival of Representations and Warranties. Subject to the
limitations contained in this Article VI, all of the representations,
warranties, covenants and agreements contained in this Agreement shall survive
the Closing as follows:
(a) All of the representations and warranties made by Holders
in Sections 3.1, 3.2, 3.3, 3.4 and 3.15 of this Agreement shall survive
for the applicable statute of limitations; and
(b) All other representations and warranties made by Holders
shall survive for a period ending twelve (12) months following the
Closing Date; and
(c) All of the representations and warranties made by Buyer
herein shall survive for a period ending twelve (12) months following
the Closing Date.
(d) The covenants and agreements made by the Holders contained
in Section 7.5 shall survive until December 31, 2006.
PURCHASE AGREEMENT 21
Section 6.2 Indemnification by the Holders. Subject to the limitations
of this Article VI, from and after the Closing Date, each Holder severally (and
not jointly) shall indemnify, save, defend and hold harmless the Buyer from and
against any and all costs, lawsuits, losses, liabilities, deficiencies, claims
and expenses, including interest, penalties, attorneys' fees and all amounts
paid in investigation, defense or settlement of any of the foregoing
(collectively referred to herein as "Damages"), incurred in connection with or
arising out of or resulting from or incident to any (i) breach of any covenant
of Bobcat, CuddCo or the Holders or (ii) breach or inaccuracy of the
representations and warranties of Bobcat, CuddCo, the Company or the Holders set
forth in this Agreement. Notwithstanding the foregoing, for purposes of this
Agreement "Damages" shall include only actual damages and shall not include any
consequential, incidental, special, indirect or punitive damages.
Section 6.3 Indemnification by the Buyer. Subject to the limitations of
this Article VI, from and after the Closing Date, Buyer shall indemnify, save,
defend and hold harmless the Holders from and against any and all Damages
incurred in connection with or arising out of or resulting from or incident to
any (i) breach of any covenant of Buyer or (ii) breach or inaccuracy of the
representations and warranties of Buyer set forth in this Agreement.
Section 6.4 Defense of Claims. If any lawsuit or enforcement action is
filed against any party entitled to the benefit of indemnity hereunder, or any
claim to Damages is to be asserted hereunder, written notice thereof describing
such lawsuit, enforcement action or claim in reasonable detail and indicating
the amount (estimated, if necessary) or good faith estimate of the reasonably
foreseeable estimated amount of Damages (which estimate shall in no way limit
the amount of indemnification the indemnified party is entitled to receive
hereunder), shall be given to the indemnifying party as promptly as practicable
(and in any event within ten (10) days, after the service of the citation or
summons) ("Notice of Action"); provided that the failure of any indemnified
party to give timely notice shall not affect its rights to indemnification
hereunder to the extent that the indemnified party demonstrates that the amount
the indemnified party is entitled to recover exceeds the actual damages to the
indemnifying party caused by such failure to so notify within ten (10) days. The
indemnifying party may elect to compromise or defend any such asserted liability
and to assume all obligations contained in this Section 6.4 to indemnify the
indemnified party by a delivery of notice of such election ("Notice of
Election") within ten (10) days after delivery of the Notice of Action. Upon
delivery of the Notice of Election, the indemnifying party shall be entitled to
take control of the defense and investigation of such lawsuit, action or claim
and to employ and engage attorneys of its own choice to handle and defend the
same, at the indemnifying party's sole cost, risk and expense, and such
indemnified party shall cooperate in all reasonable respects, at the
indemnifying party's sole cost, risk and expense, with the indemnifying party
and such attorneys in the investigation, trial, and defense of such lawsuit,
action or claim and any appeal arising therefrom; provided, however, that the
indemnified party may, at its own cost, risk and expense, participate in such
investigation, trial and defense of such lawsuit, action or claim and any appeal
arising therefrom. If the Notice of Election is delivered to the indemnified
party, the indemnified party shall not pay, settle or compromise such claim
without the indemnifying party's consent. If the indemnifying party elects not
to defend the claim of the indemnified party or does not deliver to the
indemnified party a Notice of Election within ten (10) days after delivery of
the Notice of Action, the indemnified party may, but shall not be obligated to
defend, or the indemnified party
PURCHASE AGREEMENT 22
may compromise or settle (exercising reasonable business judgment) the claim or
other matter on behalf, for the account, and at the risk, of the indemnifying
party.
Section 6.5 Indemnification Deductible. The parties shall not be
entitled to indemnification under the provisions of this Article VI for any
breaches of representations, warranties or covenants by any other party for any
individual claim less than $150,000 (the "Minimum Claim Amount"), and until such
time as the total of all individual claims exceeding the Minimum Claim Amount,
and are therefore subject to indemnification, exceed $750,000 (the
"Deductible"), at which time the indemnified party will be entitled to
indemnification for all amounts exceeding the Deductible.
Section 6.6 Limitations on Indemnification. Holders' and Buyer's
aggregate liability for indemnification obligations pursuant to this Agreement
shall be as follows:
(a) For breaches of representations and warranties made by the
Holders pursuant to Sections 3.1, 3.2, 3.3, 3.4 and 3.15, the Holders
shall not be obligated to indemnify Buyer for any amounts that, when
aggregated with all other indemnification claims against the Holders
pursuant to this Article VI, exceed the Consideration;
(b) For breaches of all other representations, warranties and
covenants made by the Holders herein, the Holders shall not be
obligated to indemnify Buyer for any amounts that, when aggregated with
all other indemnification claims against the Holders pursuant to this
Article VI, exceed $5,000,000; and
(c) For breaches of all representations, warranties and
covenants made by Buyer herein, Buyer shall not be obligated to
indemnify Holders for any amounts that, when aggregated with all other
indemnification claims against the Buyer pursuant to this Article VI,
exceed $5,000,000.
Section 6.7 Other Matters Pertaining to Indemnification.
(a) The obligation of the Holders to indemnify Buyer under
this Article VI shall be several (and not joint), based on the amount
of Consideration received by each Holder in proportion to the total
Consideration.
(b) The amount of any Damages for which indemnification is
provided under this Article VI shall be net of (i) any amounts actually
recovered by the indemnified party under insurance policies in effect
and applicable to such Damages (it being agreed that the indemnified
party shall use its commercially reasonable efforts to obtain recovery
under such insurance policies), (ii) any amounts received by the
indemnified party from any Third Party in respect of such Damages and
(iii) any tax benefit received by the indemnified party as a result of
any Damages.
(c) Except with respect to claims based on fraud and claims
for equitable relief, after the Closing, the rights of the parties
under this Article VI shall be the exclusive remedy with respect to
claims resulting from or relating to any misrepresentation, breach of
warranty or failure to perform any covenant or agreement contained in
this Agreement, and each party hereby waives, to the full extent it may
do
PURCHASE AGREEMENT 23
so, any other rights or remedies that may arise under any applicable
statute, rule or regulation.
(d) The indemnities herein are intended solely for the benefit
of the persons expressly identified in this Article VI (and their
permitted successors and assigns) and are in no way intended to, nor
shall they, constitute an agreement for the benefit of, or be
enforceable by, any other person.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given,
if to Buyer, to:
Black Warrior Wireline Corp.
000 Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, President
Facsimile No.: (000) 000-0000
with a copy, which shall not constitute notice, to:
Rosen, Cook, Sledge, Davis, Xxxxxxxx & Oldshue, PA
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
if to Bobcat, to:
Bobcat Pressure Control, Inc.
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Facsimile No.: 000-000-0000
if to CuddCo, to:
Xxxxx Xxx Xxxx Company
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Facsimile No.: 000-000-0000
PURCHASE AGREEMENT 24
if to the Holders, to:
Xxxxx Xxx Xxxx
0000-0/0 Xxxxx
Xxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Xxxxx Xxxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Petro Capital I, L.P.
0000 Xxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Facsimile No.: 000-000-0000
with a copy, which shall not constitute notice, to:
Xxxxxxx Xxxxxxx Xxxxx, X.X.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
and
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
or such other address or facsimile number as a party may hereafter specify for
the purpose by notice to the other parties hereto. Each notice, request or other
communication shall be effective only if given by facsimile, when the facsimile
is transmitted to the facsimile number specified in this Section 7.1 and the
appropriate facsimile confirmation is received or if given by overnight courier
or personal delivery when delivered at the address specified in this Section
7.1.
Section 7.2 Fees and Expenses. Except as otherwise specifically
provided herein, all fees and expenses incurred in connection herewith and the
transactions contemplated hereby shall be paid by the party incurring such fees
and expenses, whether or not the transactions
PURCHASE AGREEMENT 25
contemplated herein are consummated. Notwithstanding the foregoing, or the other
provisions of this Agreement, the parties hereto acknowledge and agree that
(i) Buyer shall pay the fees and expenses, not in
excess of $150,000, of professionals engaged by Bobcat, CuddCo or the
Holders in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby;
(ii) The advisory fee of $150,000 to PCA shall be
paid by the Company;
(iii) contingent upon the Closing of the transactions
contemplated herein, Buyer shall pay the settlement fee in the amount of
$500,000, pursuant to that certain Formal Settlement Agreement between Bobcat,
Buyer, Centre Partners Management LLC and Centre Southwest Partners LLC dated
November 17, 2005; and
(iv) the bonus due to Xxxx Xxxx prior to Closing in
the amount disclosed on Schedule 7.2 (iv) shall be paid by Holders.
Section 7.3 Officers' and Directors' Insurance. For a period of six
years after the Closing Date, Buyer shall cause the Company to maintain in
effect directors' and officers' liability insurance substantially comparable to
such insurance maintained by the Company prior to the Closing Date, which
insurance shall cover as additional insured parties any persons who are officers
or directors of the Company immediately prior to the Closing Date with respect
to claims arising from facts or events that occurred at or before the Closing
Date. If the Company or any of its successors or assigns (i) consolidates with
or merges into any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person, then and in each
such case, proper provision shall be made so that the successors and assigns of
the Company assume the obligations set forth in this Section 7.3.
Notwithstanding anything in this Agreement to the contrary, the provisions of
this Section 7.3 shall survive the Closing indefinitely, and the officers and
directors covered hereby shall be considered third party beneficiaries of this
Agreement for the purpose of this Section 7.3 only.
Section 7.4 Amendments; No Waivers. Any provision of this Agreement may
be amended or waived if, and only if, the amendment or waiver is in writing and
signed, in the case of an amendment, by Bobcat, CuddCo, Holders and Buyer, or in
the case of a waiver, by the party against whom the waiver is to be effective.
No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Section 7.5 Further Assurances.
(a) Each of the parties hereto will act in good faith and use
commercially reasonable efforts to take, or cause to be taken, all
actions to file, or cause to be filed, all documents and to do, or
cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement as promptly as practicable, including obtaining all necessary
consents, waivers, approvals, authorizations, Permits or orders from
Governmental Entities or other Third Parties.
PURCHASE AGREEMENT 26
Each of the parties hereto shall also refrain from taking, directly or
indirectly, any action that would impair such party's ability to
consummate the transactions contemplated by this Agreement.
(b) The Holders acknowledge that Buyer files periodic and
other reports with the U.S. Securities and Exchange Commission pursuant
to Section 13 of the Securities Exchange Act of 1934, as amended, and
registration statements under the. Securities Act of 1933, as amended.
Without limiting the generality of the undertaking in Section 7.5(a),
Xxxx, Xxxxxxxx and Xxxxxxxx will, and will use their commercially
reasonable efforts to cause the other members of the Company's then
current management to, (i) cooperate with Buyer by reviewing and
commenting to Buyer with respect to drafts of information about the
Company appearing in Buyer's periodic reports and registration
statements, including documents filed in connection with its planned
public offering (the "Offering"), that are filed by Buyer prior to
December 31, 2006, (ii) cooperate with the efforts of Buyer's auditors,
Xxxxx Xxxxxxxx LLP ("GT"), to further audit the books and records of
the Company so that same may be consolidated with those of Buyer for
purposes of the Offering (the "Re-Audit"), including making available
all of the Company's financial records and documentation regarding
internal controls and financial reporting processes, communicating
customary general representations of management with respect to audit
examinations for all periods prior to the Closing, and executing such
documents and things as are required by Buyer's auditors for such
audits, and (iii) use commercially reasonable efforts to cause the
current auditors for the Company, BKD, to cooperate in the Re-Audit to
be performed by GT, including by providing access to working papers and
the engagement partner for audits of the Company performed by BKD,
copies of certain selected working papers, and other customary
communications between predecessor and successor auditors, all pursuant
to cooperating with the timing requirements of the Re-Audit, all to the
extent reasonably requested by Buyer and at Buyer's sole cost and
expense; provided however that neither Xxxxxxxx or Xxxxxxxx will charge
any fee for fulfilling their obligations under this Section.
(c) In connection with their review of draft information
provided by Buyer pursuant to the foregoing paragraph 7.5(c), all of
Xxxx, Xxxxxxxx and Xxxxxxxx agree that, with respect to draft
information they may receive for review information which is
"Confidential Information" (defined below). Xxxx, Xxxxxxxx and Xxxxxxxx
agree that they will not (a) disclose Confidential Information of any
Interested Party to any Person (other than such Interested Party and
its Affiliates, employees, agents or representatives) or (b) use,
directly or indirectly, any of such Confidential Information for any
competitive or commercial purpose; provided, however, that each Party
may disclose Confidential Information to their attorneys if such
Persons agree to comply with the provisions of this Section 7.5(c).
"Confidential Information" shall mean all confidential records, data
(including financial data), customers lists, trade secrets and other
confidential information, including all information which has been
provided by an Interested Party to another Party pursuant to this
Agreement and marked "Confidential," but shall not include any
information that (i) is now, or hereafter becomes, through no act of
such Party that constitutes a breach of this Agreement, generally known
or available to the public, (ii) is hereafter furnished to such Party
by a third party, who, to the knowledge of such receiving Party, is not
under any obligation of confidentiality to the related
PURCHASE AGREEMENT 27
Interested Party, (iii) is disclosed with the written approval of the
related Interested Party, (iv) is required to be disclosed by law
(including securities law), court order or similar compulsion, (v) is
required or is reasonably necessary to be provided pursuant to or in
connection with any legal proceeding involving the parties hereto.
Section 7.6 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other parties hereto. Any purported assignment in violation
hereof shall be null and void.
Section 7.7 Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
Section 7.8 Third Party Beneficiaries. The terms and provisions of this
Agreement are intended solely for the benefit of the parties hereto and their
respective successors and permitted assigns, and no provision of this Agreement
is intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
Section 7.9 Governing Law. This Agreement shall be construed in
accordance with and governed by the internal Laws of the State of Texas
applicable to contracts executed and fully performed within the State of Texas,
notwithstanding any conflict of law provisions to the contrary.
Section 7.10 Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in any state or federal court in Xxxxxx County, Texas, and each of the
parties hereby consents to the exclusive jurisdiction of those courts (and of
the appropriate appellate courts therefrom) in any suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by Law, any objection
that it may now or hereafter have to the laying of the venue of any suit, action
or proceeding in any of those courts or that any suit, action or proceeding that
is brought in any of those courts has been brought in an inconvenient forum.
Process in any suit, action or proceeding may be served on any party anywhere in
the world, whether within or without the jurisdiction of any of the named
courts. Without limiting the foregoing, each party agrees that service of
process on it by notice as provided in Section 7.1 shall be deemed effective
service of process.
Section 7.11 Entire Agreement. This Agreement, together with the
Schedules and Annexes hereto, constitute the entire agreement between the
parties with respect to the subject matter hereof, and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
PURCHASE AGREEMENT 28
Section 7.12 Authorship. The parties agree that the terms and language
of this Agreement were the result of negotiations between the parties and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against any party. Any controversy over construction of this
Agreement shall be decided without regard to events of authorship or
negotiation.
Section 7.13 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to affect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
Section 7.14 Headings; Construction. The section and article headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. In this Agreement
(i) the word "including" shall mean "including without limitation," whether or
not expressed, (ii) any reference herein to an annex, article, clause, section,
or schedule refers to an annex, article, clause, section, or schedule to this
Agreement, unless otherwise stated, and (iii) when calculating the period of
time within or following which any act is to be done or steps taken, the date
that is the reference day in calculating such period shall be excluded and if
the last day of such period is not a Business Day, then the period shall end on
the next day that is a Business Day.
Section 7.15 Ordinary Course Bonuses. Buyer confirms that it has agreed
that the Company may pay routine ordinary course bonuses, previously booked to
the financial statements of the Company, not to exceed $150,000, to Cudd,
Johnston, Xxxxxxxx and Xxxx Xxxx.
* * * * *
[The remainder of this page is intentionally left blank.]
PURCHASE AGREEMENT 29
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
BOBCAT: BOBCAT PRESSURE CONTROL, INC.
By: /s/ Xxxxx Xxx Xxxx
---------------------
Name: Xxxxx Xxx Xxxx
---------------------
Title: President
---------------------
CUDDCO: XXXXX XXX XXXX COMPANY
By: /s/ Xxxxx Xxx Xxxx
---------------------
Name: Xxxxx Xxx Xxxx
---------------------
Title: President
---------------------
HOLDER: /s/ Xxxxx Xxx Xxxx
-----------------------------
Xxxxx Xxx Xxxx
HOLDER: /s/ Xxxx Xxxxxxxx
-----------------------------
Xxxx Xxxxxxxx
HOLDER: /s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxxx
PURCHASE AGREEMENT 30
HOLDER: PETRO CAPITAL I, L.P.
By: /s/ PETRO CAPITAL I, L.P.
--------------------------
Name:
-----------------------------
Title: Managing Member
--------------------------
BUYER: BLACK WARRIOR WIRELINE CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
--------------------------
Title: CEO
--------------------------
PURCHASE AGREEMENT 31
ANNEX I
GLOSSARY
"Affiliate" means (i) Xxxxx Xxx Xxxx, Xxxx Xxxxxxxx, or Xxxxx Xxxxxxxx
or any of their Immediate Family Members; (ii) any Holder or any Holder's
Immediate Family Members; or (iii) any Person, any other Person, directly or
indirectly, controlling, controlled by, or under common control with, such
Person, or any of their Immediate Family Members. For purposes of this
definition, the term "control" (including the correlative terms "controlling",
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
Contract or otherwise.
"Agreement" has the meaning specified in the preamble to this
Agreement.
"Audited Financial Statements" has the meaning specified in Section
3.6(a).
"Balance Sheet Date" means June 30, 2005.
"Bobcat Balance Sheet" means Bobcat's balance sheet for the fiscal year
ended June 30, 2005.
"Bobcat Bylaws" has the meaning specified in Section 3.1.
"Bobcat Charter" has the meaning specified in Section 3.1.
"Business Day" means any day, other than a Saturday, Sunday or one on
which banks are authorized by Law to be closed in Houston, Texas.
"Closing" has the meaning specified in Section 2.1.
"Closing Date" has the meaning specified in Section 5.1.
"Code" means the United States Internal Revenue Code of 1986, as
amended, together with the rules and regulations promulgated thereunder.
"Company" means Bobcat and CuddCo.
"Company Balance Sheet" has the meaning specified in Section 2.1
"Company Employee Plans" has the meaning assigned in Section 3.10(a).
"Consideration" has the meaning specified in Section 2.1.
"Contract" means any written or oral contract, agreement, lease, note,
loan, bond, mortgage, security agreement, indenture, guaranty, license,
franchise, permit, concession, option, or other obligation or agreement.
Annex I - 1
"Credit Agreement" means that certain Credit Agreement dated the ____
day of _______________, 2004 by and between Bobcat and Comerica Bank, as the
same has been amended from time to time.
"CuddCo Balance Sheet Date" means CuddCo's balance sheet for the fiscal
year ended June 30, 2005.
"CuddCo Bylaws" has the meaning specified in Section 3.2.
"CuddCo Charter" has the meaning specified in Section 3.2.
"Damages" has the meaning specified in Section 6.2.
"Default" has the meaning specified in Section 3.18(c).
"Employment Agreements" has the meaning specified in the Preliminary
Statements to this Agreement.
"Environmental Laws" means any Law (excluding the common law) currently
in effect and as may be amended or supplemented, and any judicial or
administrative interpretation thereof, relating to Hazardous Substances or
pollution or the regulation and protection of human health, safety, the
environment or natural resources, including, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq.;
the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. ss. 11001 et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.;
the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; the Clean
Air Act, 42 U.S.C. ss. 7401 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. ss. 136 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 300f et seq.; the Toxic Substance Control Act, 15 U.S.C. ss. 2601 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. ss. 5101 et seq.; the Atomic Energy Act,
42 U.S.C. ss. 2011 et seq.; the Outer Continental Shelf Lands Act, 43 U.S.C. ss.
1331 et seq.; and the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et
seq.; and each of their state and local counterparts or equivalents.
"Environmental Liabilities" means all liabilities, obligations,
responsibilities, response, remedial and removal costs, investigation and
feasibility study costs, capital costs, operation and maintenance costs, losses,
damages, punitive damages, property damages, natural resource damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Substance
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all Permits required by any Governmental
Entity under any Environmental Law.
Annex I - 2
"Equity Interest" means with respect to any Person:
(i) any and all shares, interests, participations, rights in,
or other equivalents (however designated and whether voting or non-voting) of
such Person's capital stock or other equity interests (including, without
limitation, partnership or membership interests in a partnership or limited
liability company or any other interest or participation that confers on a
Person the right to receive a share of the profits and losses, or distributions
of assets, of the issuing Person);
(ii) securities of such Person convertible into or
exchangeable for any such shares, interests, participations, rights in, or other
equivalents described in clause (i) above; and
(iii) options, warrants or other rights to acquire from such
Person, or obligations of such Person to issue, any shares, interests,
participations, rights in, or other equivalents described in clause (i) above or
securities described in clause (ii) above, or requiring payments based on the
value of any such shares, interests, participations, rights in, or other
equivalents described in clause (i) above.
"ERISA" has the meaning specified in Section 3.10(a).
"ERISA Affiliate" has the meaning specified in Section 3.10(c).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means United States generally accepted accounting principles,
applied on a consistent basis.
"Governmental Entity" means any supranational, federal, state, local or
foreign government, court, administrative agency or commission or other
governmental or regulatory authority or instrumentality.
"Hazardous Substances" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, explosive, radioactive, a contaminant or a pollutant or by
other words of similar meaning or regulatory effect, including any petroleum or
petroleum-derived substance or waste, asbestos, polychlorinated biphenyls, and
naturally-occurring radioactive material.
"Holders" has the meaning specified in the preamble to this Agreement.
"Immediate Family Members" means any son, daughter, step-son,
step-daughter, spouse, parent, step-parent, or parent or step-parent of spouse
of such Person.
"Insurance Policies" has the meaning specified in Section 3.25.
"Intellectual Property" means (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice) and all improvements
thereto, (ii) all patents, patent applications, and patent disclosures, together
with all provisionals, reissuances, continuations,
Annex I - 3
continuations-in-part, divisions, revisions, extensions, and reexaminations
thereof (collectively, "Patents"), (iii) all trademarks, service marks, trade
dress, logos, brand names, trade names, domain names and corporate names,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith (collectively, "Marks"),
(iv) all copyrightable works, all copyrights, any and all website content, and
all applications, registrations, and renewals in connection therewith
(collectively, "Copyrights"), (v) all mask works and all applications,
registrations, and renewals in connection therewith, (vi) all trade secrets and
confidential business information (including research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, research records, records of
inventions, test information, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals) (collectively,
"Trade Secrets"), (vii) all source code and object code versions of computer
software (including data and related documentation), (viii) all other
proprietary rights, and (ix) all copies and tangible embodiments thereof (in
whatever form or medium), any rights in or licenses of any of the foregoing, and
any claims or causes of actions (pending, filed) arising out of or related to
any infringement or misappropriation of any of the foregoing.
"Knowledge" means the actual knowledge of the board of directors of
Bobcat or CuddCo, as applicable, and each of the following Persons: Xxxxx Xxx
Xxxx, Xxxxxx Xxxxxxxx, Xxxx Xxxxxxxx and Xxxxx Xxxxxx. In addition, the
foregoing individuals will be deemed to have "Knowledge" of a particular fact or
other matter if a prudent individual could be expected to discover or otherwise
become aware of such fact or matter in the course of conducting a reasonably
comprehensive investigation regarding the accuracy of any representation or
warranty contained in this Agreement.
"Law" means any supranational, federal, state, local, or foreign law,
common law, rule, regulation, judgment, code, ruling, statute, order, decree,
injunction, ordinance or other legal requirement, including any arbitral
decision or award.
"Leases" has the meaning specified in Section 3.19.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of an asset;
provided, however, that the term "Lien" shall not include (i) mechanics',
carriers', workers', repairers', materialmen's, warehousemen's and other similar
liens, (ii) liens for taxes, assessments and governmental charges or levies not
yet due and payable or being contested in good faith by appropriate proceedings,
(iii) any minor imperfection of title or similar encumbrance which could not
reasonably be expected to have a Material Adverse Effect and (v) any encumbrance
created pursuant to any lease of property, be it real or personal.
"Long Term Debt" has the meaning specified in Section 2.1.
"Material Adverse Effect" means any change, circumstance, effect,
event, occurrence, state of facts or development that would be or could
reasonably be expected to be materially adverse to the business, assets,
condition (financial or otherwise) or results of operations of Bobcat and
CuddCo, taken as a whole, or to the ability of Holders to consummate the
Annex I - 4
transactions contemplated hereby; provided, however, that none of the following
shall be deemed to constitute, and none of the following shall be taken into
account in determining whether there has been, a Material Adverse Effect: (a)
any adverse change, event, development, or effect arising from or relating to
(1) general business or economic conditions, including such conditions related
to any industry in which Bobcat or CuddCo operates, (2) national or
international political or social conditions, including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack
upon the United States, or any of its territories, possessions, or diplomatic or
consular offices or upon any military installation, equipment or personnel of
the United States, (3) financial, banking, or securities markets (including any
disruption thereof and any decline in the price of any security or any market
index), or (4) the taking of any action contemplated by this Agreement and any
other agreement contemplated hereby, and (b) any adverse change in or effect on
Bobcat's or CuddCo's business, operations and financial affairs, taken as a
whole, that is cured by Bobcat, CuddCo or the Holders on or before the Closing
Date.
"Major Customers" has the meaning specified in Section 3.22.
"Major Suppliers" has the meaning specified in Section 3.22.
"Material Contracts" has the meaning specified in Section 3.18(a).
"Ordinary Course" means any action taken by a Person that (i) is
consistent with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person and (ii) is not
required to be authorized by the board of directors of such Person (or by any
Person or group of Persons exercising similar authority) and is not required to
be authorized by the parent company (if any) of such Person.
"Permit" means any permit, license, easement, variance, exemption,
consent, certificate, approval, authorization of and registration with and under
all Laws and from all Governmental Entities.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization, including
any Governmental Entity.
"Real Property" has the meaning specified in Section 3.19.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of any
Hazardous Substance into the environment or into or out of any property,
including the movement of any Hazardous Substance through or in the air, soil,
surface water, groundwater or property.
"Representatives" means the officers, directors, employees, attorneys,
accountants, advisors, representatives and agents of a Person.
"Returns" has the meaning specified in Section 3.9.
"SEC" means the United States Securities and Exchange Commission.
Annex I - 5
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" means, with respect to any Person, any other Person
(including joint ventures) of which such Person, directly or indirectly, (i) has
the right or ability to elect, designate or appoint a majority of the board of
directors or other Persons performing similar functions for such Person, whether
as a result of the beneficial ownership of Equity Interests, contractual rights
or otherwise or (ii) beneficially owns a majority of the voting Equity Interests
or a majority of the economic interests.
"Tax" or "Taxes" means all United States federal, state, local or
foreign income, profits, estimated gross receipts, windfall profits,
environmental (including taxes under Section 59A of the Code), severance,
property, intangible property, occupation, production, sales, use, license,
excise, emergency excise, franchise, escheat, capital gains, capital stock,
employment, withholding, social security (or similar), disability, transfer,
registration, stamp, payroll, goods and services, value added, alternative or
add-on minimum tax, estimated, or any other tax, custom, duty or governmental
fee, or other like assessment or charge of any kind whatsoever, and any
interest, penalties, fines, related liabilities or additions to taxes that may
become payable with respect to Taxes described above that are imposed by any
Governmental Entity, whether disputed or not.
"Third Party" means any Person (or group of Persons) other than Buyer,
Bobcat, CuddCo, Holder, or any Affiliates of the foregoing.
"Unaudited Financial Statements" has the meaning specified in Section
3.6(a).
"Voting Agreement" has the meaning specified in the Preliminary
Statements to this Agreement.
"Warrant" means any warrant granted by Bobcat to purchase shares in
Bobcat.
Annex I - 6
