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EXHIBIT 10.1
AGREEMENT OF ACQUISITION
Between
LONE STAR INTERNATIONAL ENERGY, INC.
And
ENERGY RECLAIM REFRIGERATION, INC.,
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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AGREEMENT OF ACQUISITION
THIS AGREEMENT OF ACQUISITION (the "Agreement") is entered effective as
of the 2nd day of April, 1997, by and among Lone Star International Energy,
INC., a Nevada corporation ("LSI"), Energy Reclaim Refrigeration, Inc., a Texas
corporation ("ERR"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Shareholder").
W I T N E S S E T H :
WHEREAS, LSI, ERR, and the Shareholder desire to adopt a plan of
reorganization as provided herein providing, among other things, for the
exchange by LSI of certain of its shares of Common Stock, $.001 par value (the
"LSI Stock"), for all of the issued and outstanding shares of Common Stock of
ERR, no par value (the "ERR Stock"), owned by the Shareholder at the Closing
(hereinbelow defined); and
WHEREAS, the reorganization is intended to constitute and shall be
construed as a nontaxable reorganization under Section 368(a)(l)(B) of the
Internal Revenue Code of 1986, as amended; and
WHEREAS, the Shareholder owns and expects at the Closing to own
beneficially and/or of record 50,000,000 (Fifty Million) shares of the ERR
Stock, which constitutes 100% of all of the issued and outstanding capital
stock of ERR expected to exist at the Closing;
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
ARTICLE 1
REORGANIZATION TRANSACTION
1.1 TRANSFER OF ERR COMMON STOCK. Subject to the terms and
conditions of this Agreement, the Shareholder hereby assigns, transfers, and
delivers to LSI, certificate(s) representing 50,000,000 (Fifty Million) shares
of ERR Stock duly endorsed in blank.
1.2 CONSIDERATION FOR TRANSFER TO LSI.
In exchange for the Shareholder's shares of ERR Stock, LSI shall cause
to be issued to the Shareholder, Three million Three Hundred Thirty-three
Thousand Three Hundred Thirty-three (3,333,333) unregistered Rule 144
restricted shares of LSI Stock.
1.3 CLOSING. The consummation of the reorganization (the "Closing")
shall be at 10:00 a.m., Weatherford, Texas time on April 7, 1997 (the "Closing
Date") or such other time as the parties may agree. The Closing shall take
place at the offices of LSI or such other place as the parties may agree.
1.4 DELIVERIES AT CLOSING.
(a) At the Closing, ERR and Shareholder shall deliver to LSI
the following:
1. A certificate of the President of ERR, and each
Shareholder dated the Closing Date, certifying as
to the fulfillment of the conditions contained
herein and the representations and warranties made
herein are true and correct as if on and made the
date of Closing;
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2. Stock certificates and stock powers evidencing the
transfer of the shares of ERR required herein; and
3. An opinion of counsel, acceptable to LSI, as to the
validity and chain of title of the patents that are
described on SCHEDULE 2,16;
4. Such other documents and certificates as LSI may
reasonably request.
(b) At the Closing, LSI shall deliver to the Shareholder the
following:
1. A certificate of the President of LSI certifying as
to the fulfillment of the conditions contained
herein and the representations and warranties made
herein are true and correct as if on and made the
date of Closing;
2. Stock certificate(s) evidencing the transfer of the
shares of LSI required herein;
3. An employment agreement between LSI and Stockholder
upon mutually acceptable terms, and specifically
providing that Stockholder shall serve as an
officer and director of ERR; and
4. Such other documents and certificates as ERR and
Shareholder may request.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
ERR AND CERTAIN SHAREHOLDER
ERR, AND ▇▇▇▇▇▇ ▇ ▇▇▇▇▇ (ALL SUCH PARTIES COLLECTIVELY REFERRED TO AS
THE "REPRESENTING SHAREHOLDER") JOINTLY AND SEVERALLY REPRESENT AND WARRANT TO
LSI AS OF THE DATE HEREOF THE FOLLOWING:
2.1 ORGANIZATION, QUALIFICATION AND GOOD STANDING. ERR is a duly
organized and validly existing corporation in good standing under the laws of
the State of Texas and is duly qualified or registered to transact business as
a foreign corporation, and is in good standing, in each jurisdiction that
requires such qualification or registration wherein it owns or leases any
properties or conducts any business and in which the failure to so qualify or
register could have a material adverse effect on the business, financial
condition, or properties of ERR; ERR has the corporate power and authority to
own its properties and conduct its business as presently conducted. Copies of
the Articles of Incorporation and Bylaws of ERR, including any amendments
thereto are attached hereto as SCHEDULE 2.1. All corporate minute books and
stock transfer records of ERR previously delivered to LSI are complete and
correct as of the date hereof.
2.2 SUBSIDIARIES. ERR does not, directly or indirectly, own or
control any capital stock or other securities of, or have any proprietary
interest in, any corporation, association, partnership or business organization
or enterprise.
2.3 CAPITALIZATION. The authorized capital stock of ERR at the
Closing will consist of 50,000,000 (Fifty Million) shares of common stock, no
par value per share, of which 50,000,000 (Fifty Million) shares will be issued
and
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outstanding. All shares of capital stock that are outstanding as of the
Closing will have been duly authorized and validly issued and fully paid and
nonassessable, and will not be subject to, nor issued in violation of, any
preemptive rights. Except as set forth above or as described on SCHEDULE 2.3
hereto, there are no shares of capital stock of ERR authorized or outstanding,
and there are no subscriptions, options to purchase shares of ERR, conversion
or exchange rights, warrants, preemptive rights or other agreements, claims or
commitments of any nature whatsoever (whether firm or conditional) obligating
ERR to issue, transfer, deliver or send, or cause to be issued, transferred,
delivered or sold, additional shares of the capital stock of ERR or obligating
ERR to grant, extend or enter into any such agreement or commitment. Except as
described on SCHEDULE 2.3 hereto, there are no voting agreements, buy-sell
agreements, or other agreements relating to any ERR Stock. Except as disclosed
on SCHEDULE 2.3 as of the Closing Date the Shareholder shall be the holder of
record of 100% of the issued and outstanding shares of ERR Stock and no other
shares of ERR Stock shall be issued and outstanding and held by any other
person.
2.4 AUTHORIZATION. ERR has the corporate power and authority to
enter into and be bound by the terms and conditions of this Agreement, and the
other agreements contemplated hereby and to perform its obligations hereunder
and thereunder. The Board of Directors of ERR has duly approved and authorized
the execution, delivery and performance of this Agreement, and the other
agreements contemplated hereby, and no other corporate proceedings on the part
of ERR, are necessary to approve and authorize the execution, delivery and
performance of this Agreement and the other agreements contemplated hereby.
This Agreement has been duly executed and delivered by ERR and the Shareholder,
all of whom are, and at Closing will be, duly authorized and qualified to
execute this Agreement and this Agreement constitutes, a valid and legally
binding obligation of each of ERR and the Shareholder, as the case may be,
enforceable against each in accordance with its terms. Each other agreement or
document executed or to be executed by ERR and the Shareholder in connection
with the transactions contemplated hereby has been, or when executed and
delivered will be, duly executed and delivered, and will constitute, a valid
and legally binding obligation of each of ERR and the Shareholder, as the case
may be, enforceable against each in accordance with its terms.
2.5 NON-CONTRAVENTION. The execution, delivery and performance by
ERR and Shareholder of this Agreement, and the other agreements contemplated
hereby and thereby, will not (a) conflict with or result in a violation of any
provision of the charter or bylaws of ERR, (b) except as set forth on SCHEDULE
2.5 attached hereto, conflict with or result in a violation of any provision
of, or constitute (with or without the giving of notice or the passage of time
or both) a default under, or give rise (with or without the giving of notice or
the passage of time or both) to any right of termination, cancellation or
acceleration under, any bond, debenture, note, mortgage, indenture, lease,
agreement or other instrument or obligation to which ERR or Shareholder is a
party or by which its properties or assets may be bound, which default would
have a material adverse effect on the business, properties or financial
condition of ERR, (c) result in the creation or imposition of any lien, charge,
pledge, security interest or other encumbrance of any kind upon the properties
or assets of ERR, or (d) result in a violation of ERR or Shareholder of any
statute or law or any judgment, order, decree, rule or regulation of any
governmental body to which ERR or Shareholder is subject, which violation would
have a material adverse effect on the ownership of the business, properties or
financial condition of ERR or the shares of ERR owned by Shareholder.
2.6 CONSENTS. No authorization, consent or approval of, or filing
with, any public body or authority is necessary for the execution, delivery or
performance by ERR of this Agreement, or any of the other agreements
contemplated hereby.
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2.7 FINANCIAL STATEMENTS. ERR, having been recently incorporated has
not prepared financial statements. ERR has not incurred any liabilities which
in the aggregate on the date hereof exceeds $1,000.
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected on SCHEDULE 2.8, ERR does not have, as of the date hereof any
liabilities or obligations of any nature, whether accrued, absolute, contingent
or otherwise, and whether due or to become due, except for liabilities of ERR
arising from bona fide transactions in the ordinary course of its business that
would exceed in the aggregate $1,000 or not have a material adverse effect on
the business of ERR. The Representing Shareholder and ERR do not know or have
reasonable grounds to know of any basis for assertion against ERR of any
material claim or liability of any nature.
2.9 ABSENCE OF MATERIAL ADVERSE CHANGES. Since January 30, 1997,
1997, there has not been:
(a) Any change in or event or condition known to ERR or the
Representing Shareholder affecting ERR's financial condition, assets,
liabilities, labor relations, or business (i) of a material and adverse
nature, or (ii) arising outside the ordinary course of business;
(b) Any damage, destruction, or loss, whether or not covered
by insurance, materially and adversely affecting ERR's or ERR's property
or business; or
(c) Any mortgage, pledge, or encumbrance of any of the
tangible, intangible, or mixed assets of ERR;
2.10 EXTRAORDINARY DISTRIBUTIONS. Except as set forth on SCHEDULE
2.10 hereto, since January 30, 1997, ERR has not declared, made, or paid any
dividends or distributions of any character of property to its stockholders,
redeemed or acquired any of its stock, made payments of principal or interest
on its indebtedness to Shareholder, or, other than compensation in the ordinary
course of business, paid any bonuses or made other payments to ERR's
Shareholder, directors, officers, employees or independent contractors.
2.11 TITLE TO AND CONDITION AND LOCATION OF ASSETS. ERR owns or
leases all of the assets reflected on SCHEDULE 2.11 (the "Assets"). Except as
set forth on SCHEDULE 2.11, statutory liens and liens for taxes not yet due,
the Assets are free and clear of any lien, mortgage, security interest, charge
or encumbrance of any kind. The Assets owned or leased by ERR constitute all
of the assets now used or now reasonably required by ERR in its business. All
machinery and equipment and the leasehold premises of ERR are in good working
condition and repair, ordinary wear and tear excepted. All of the tangible
Assets are located at the location set forth on SCHEDULE 2.11.
2.12 LITIGATION. Except as set forth on SCHEDULE 2.12 hereto, ERR is
not a party to, or, to the best of ERR's and the Representing Shareholder'
knowledge, threatened with, any litigation, suit, action, investigation, or
grievance before any court, administrative agency, or other governmental
authority or any claim (collectively, "Litigation") relating to or affecting
ERR's business, the Assets, or its financial condition or prospects nor do ERR
or the Representing Shareholder know or have reasonable cause to know of any
basis for any such Litigation. Except as set forth in Schedule 2.12, ERR is
not in default or in violation of any order or judgment of any governmental or
quasi-governmental agency or bureau. The matters set forth on SCHEDULE 2.12
severally or in the aggregate could materially adversely affect ERR's business,
financial condition or prospects or the Assets.
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2.13 INSURANCE. Attached as SCHEDULE 2.13 is a correct and complete
list of fire, theft, casualty, general liability, worker's compensation,
business interruption, product liability, automobile and other insurance
policies currently insuring the Assets or business of ERR and all life
insurance policies and applications and binders for policies of which ERR is
(or to be on issuance of any applied for policy) the beneficiary, specifying
the type of coverage, the annual premium, any deductible or co-insurance
amount, the insurer and the expiration date of each such policy existing,
applied for or bound (collectively, the "Insurance Policies"). A correct and
complete list of all claims made under the Insurance Policies since January 30,
1997, has been furnished to LSI. Correct and complete copies of the Insurance
Policies have been furnished to LSI. Except as noted on SCHEDULE 2.13, the
Insurance Policies are in full force and effect, all premiums due on the
Insurance Policies or renewals thereof have been paid, and ERR is not in
default under any of the Insurance Policies. None of the Representing
Shareholder or ERR has received any notice or other communication from the
issuer of any of the Insurance Policies canceling or materially amending any of
the Insurance Policies, materially increasing the deductibles thereunder, or
materially increasing the premiums payable therefor, and, to the best of the
Representing Shareholder' and ERR's knowledge, no such cancellation, amendment
or increase in deductibles or premiums is threatened.
2.14 INVENTORY. ERR's inventory is saleable in the ordinary course of
ERR's business.
2.15 ACCOUNTS RECEIVABLE. Except as set forth in SCHEDULE 2.15 all
accounts receivable due ERR represent amounts validly due for goods or services
sold or rendered in bona fide transactions in the ordinary course of ERR's
business, and none of such accounts receivable is subject to counterclaims or
set-offs, or is in dispute, and all of such receivables are good and are
collectible at the aggregate recorded amounts thereof in the ordinary course of
business. Except as set forth in SCHEDULE 2.15, none of the accounts payable
of ERR is more than thirty (30) days past due.
2.16 PATENTS. SCHEDULE 2.16 hereto sets forth a correct and complete
list as of the date hereof of (i) each patent, copyright, trademark, logos,
commercial symbols, service marks and tradename and applications for any of the
foregoing (individually and collectively the "Intellectual Property") which are
owned or used by ERR in its business and to which ERR is a party or to which it
asserts ownership, a claim, right or interest, (ii) each lease of real estate
to which ERR is a party, (iii) each lease of tangible personal property in
which ERR is the lessor, and (iv) each lease of tangible personal property
under which ERR is obligated to make payments after the date hereof that in the
aggregate exceed $1,000 (other than leases that ERR can terminate without the
payment of more than $200) (collectively, the "Leases"). Correct and complete
copies of all Intellectual Property and Leases and all amendments thereto have
been furnished to LSI. The agreements, assignments, application, filings,
notices giving rise to or evidencing the Intellectual Property and the Leases
are valid, in full force and effect and, to the best knowledge of the
Representing Shareholder and ERR, are enforceable in accordance with their
terms against any adverse party. There has not occurred any event that would
constitute a breach or default by ERR of any material covenant or condition of
giving rise to any of the Intellectual Property or Lease, nor has there
occurred any event that with the passage of time or the giving of notice or
both would constitute such a breach or default. None of the Intellectual
Property or Leases imposes any restrictions that would materially interfere
with the continued operation of the business of ERR as currently and proposed
to be conducted. There is no pending, or, to the best knowledge of the
Representing Shareholder or ERR, threatened eminent challenge to any aspect of
the Intellectual Property.
2.17 CONTRACTS AND COMMITMENTS. (a) Except as set forth on SCHEDULE
2.17, ERR is not a party (through oral or written agreement) to, or subject to:
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(1) Any sales representative, employment or consulting
contract or arrangement that is not by its terms terminable at will
without penalty or any continuing liability or obligation to ERR;
(2) Any plan, contract, or arrangement for bonuses or
incentive compensation, pensions, deferred compensation, retirement
payments, profit sharing, fringe benefits, perquisites, severance pay,
or the like;
(3) Any plan, contract or arrangement providing for insurance
for any officer or employee of ERR or members of their families;
(4) Any contract or arrangement with any labor union;
(5) Any contract or arrangement involving an aggregate
expenditure by ERR after the date hereof of more than $1000.00;
(6) Any contract or arrangement not made in the ordinary
course of business for the sale or use of ERR's products or services;
(7) Any contract or arrangement granting to any person the
right to use any property or property right of ERR that is not, by its
terms, terminable at will without penalty by ERR; or
(8) Any contract in which any officer, director or stockholder
of ERR or any member of their families has any interest direct or
indirect, or any commitment or liability of ERR to pay any remuneration
to any such officer, director or stockholder such as fees, rentals,
loans, director fees, dividends, or fixed or contingent deferred or
current compensation (and each of the Representing Shareholder expressly
acknowledges that no such liabilities are owed to them, except as
reflected on SCHEDULE 2.17 hereto);
(9) Any contract, note or commitment of ERR evidencing or
relating to indebtedness for borrowed money, or any guarantee thereof;
(10) Any distribution agreement, customer discount or pricing
agreement, customer rebate or allowance agreement, private label ("OEM")
agreement, group buying agreement or manufacturing agreement;
(11) Any other contract, offer or commitment that is material
to the business, operations, or financial condition of ERR.
(b) As to the contracts listed on SCHEDULE 2.17 and the Intellectual
Property and Leases listed on SCHEDULE 2.16 (collectively, the "Contracts"):
(1) each Contract is a valid and binding agreement of ERR, and
none of the Representing Shareholder or ERR has any reason to believe
that any Contract is not a valid and binding agreement of the other
parties thereto;
(2) ERR has fulfilled all material obligations required
pursuant to the Contracts to have been performed by it prior to the date
hereof,
(3) ERR is not in material breach of or in material default
under any Contract, and no event has occurred which with the passage of
time or giving of notice or both would constitute such a default or
result in a loss of material rights thereunder; and
(4) to the best of the Representing Shareholder' and ERR's
knowledge, there is no existing material breach or default by any party
to any Contract, and no event has occurred which with the passage of
time or
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giving of notice or both would constitute such a default by such other
party or result in a loss of material rights thereunder or pursuant
thereto.
(c) The continuation, validity and effectiveness of each Contract will
not be affected by the transactions contemplated in this Agreement.
(d) Correct and complete copies of all of the Contracts have been
delivered to LSI.
(e) No commitment to purchase inventory, equipment, supplies or other
materials by ERR is in excess of ERR's ordinary business requirements or is at
a price in excess of market price.
2.18 COMPLIANCE WITH LAWS; PERMITS. Except as set forth on SCHEDULE
2.18 hereto, ERR is not in any violation of any federal, state, local or
foreign law, regulation or ordinance (including but not limited to laws,
regulations or ordinances relating to the manufacture, labeling and sale of
medical devices, building, zoning, land use or similar matters, employment
discrimination, occupational safety, conservation, or corrupt practices), the
penalty, liability and other consequences of the prosecution of which violation
would have a material adverse effect on the Assets, business, properties,
condition (financial or otherwise) or prospects of ERR. Except as set forth on
SCHEDULE 2.18 hereto, ERR has not received any notice or communication from any
federal, state, foreign, or local government or regulatory authority or
otherwise of any such violation or noncompliance that has not been cured.
Except as set forth on SCHEDULE 2.25, ERR is and has been in compliance with
all Environmental Laws as defined in Section 2.25 hereof. ERR has all
franchises, permits, licenses, approvals, authorizations of and registrations
with and under all federal, state, local and foreign laws, authorities and
agencies, including non-governmental self-regulatory agencies, required by ERR
to carry on any material part of its business as presently conducted (the
"Permits"). All the Permits are in full force and effect, and no suspension or
cancellation of any of them is threatened except in any case where the failure
to have or the suspension or cancellation of such Permits would not have a
material effect on the business, financial condition or Assets of ERR.
2.19 EMPLOYEE RELATIONS.
(a) ERR is in compliance with all material federal, state, local and
foreign laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and is not engaged in any
unfair labor practice, and there are no arrearages in the payment of
wages or taxes or worker's compensation assessments or penalties.
(b) None of ERR's employees is represented by any labor union or covered
by a collective bargaining agreement; there is no unfair labor practice
complaint against ERR pending before the National Labor Relations Board
of any state, foreign or local agency; there is no pending labor strike
or other material labor trouble or grievance affecting ERR (including
but not limited to any organizational campaign); and except as set forth
on SCHEDULE 2.12 hereto, there is no pending litigation or other
proceeding or, to the best of the Representing Shareholder' or ERR's
knowledge, any basis for any unasserted claim against ERR by any person
or entity relating to employment, including but not limited to claims
for contract, tort, discrimination, employee benefits, wrongful
termination and any and all common law or statutory claims.
2.20 TAX RETURNS AND PAYMENTS. ERR has duly and timely filed all
federal, state, local and foreign income, excise, sales, franchise, property,
use, withholding, unemployment and other tax returns and reports required to be
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filed prior to the date hereof and has duly paid or established adequate
reserves for the proper payment of all taxes and other governmental charges
upon it or its properties, assets, income, franchises, licenses or sales. All
such returns and reports are true, correct and complete in all material
respects. There is no unpaid assessment or proposal by any taxing authority
for additional taxes to be paid by ERR for which ERR does not have adequate
reserves for any fiscal year. All monies required to be withheld by ERR from
employees for income taxes, social security and unemployment insurance taxes
have been collected or withheld, and either paid to the respective governmental
agencies or set aside in accounts for such purpose. ERR has furnished to LSI
true and complete copies of income tax returns of ERR which have been filed.
2.21 INTELLECTUAL PROPERTY. A brief description of Intellectual
Property is set forth on SCHEDULE 2.21. Except as set forth on SCHEDULE 2.21
hereto, ERR owns the entire right, title and interest to all such Intellectual
Property indicated as owned by it, and except as set forth on SCHEDULE 2.21
hereto, no rights or licenses have been granted to others with respect to any
such Intellectual Property. Except as set forth in SCHEDULE 2.21 hereto, ERR
owns or possesses the right to use all the Intellectual Property necessary for
the conduct of its business as now, and in the future is proposed to be,
conducted, without any known conflicts in any respect with the rights of ERR.
A copy of all trademark and service ▇▇▇▇ registrations, licenses, patents and
other written documents or agreements relating to or granting ERR the right to
use any of the Intellectual Property are also included in SCHEDULE 2.21. No
proceedings are pending or have been threatened, which challenge ERR's
ownership or use of any Intellectual Property. None of ERR or the Representing
Shareholder knows of any infringement of any of such Intellectual Property, by
any person or entity.
2.22 PREPAYMENTS AND DEPOSITS. Except as set forth on SCHEDULE 2.22
hereto, ERR does not have any prepayments or deposits from customers for
products to be shipped or services to be performed by ERR after the date
hereof.
2.23 CUSTOMERS AND SUPPLIERS. None of the Representing Shareholder or
ERR has been advised or has reason to believe that any of the customers or
suppliers currently doing business with ERR will cease to do business with ERR
after the consummation of the transactions contemplated by this Agreement.
Copies of the standard forms of purchase order for inventory and other supplies
and sales contracts for finished goods have been furnished to LSI.
2.24 EMPLOYEE BENEFIT PLANS. Any and all employee benefit Plans of
ERR are in material compliance with their respective terms and applicable laws.
(a) For purposes of this Section 2.24, the term "plan" shall mean
any stock purchase, stock option, pension, profit-sharing, phantom
stock, bonus, deferred compensation, incentive compensation, severance
or termination pay, retirement, vacation, disability, death benefit,
hospitalization or other medical or dental, fife or other insurance or
supplemental unemployment benefits plan, agreement, policy or other
arrangement or understanding providing employment-related benefits,
including without limitation "employee benefit plans" as defined in the
Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations thereunder ("ERISA"). ERR heretofore provided or
made available to LSI a full and complete description or a true and
complete copy of each Plan established by or contributed to, or with
respect to which costs or liabilities are accrued by, ERR (the "Company
Plans").
(b) Except as heretofore disclosed to LSI, (A) none of the
Company Plans that is an "employee pension benefit plan," as such term
is defined in Section 3(3) of ERISA (collectively, the "ERISA Pension
Plans") is a "multi-employer pension plan," as that term is defined in
Section 4063(b) of ERISA, (B) ERR, nor any of the ERISA Pension Plans
nor any trust
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created thereunder, nor any trustee or administrator thereof, has
knowingly engaged in a transaction in connection with which ERR is
subject to the imposition of either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed pursuant to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code");
(C) no material liability under Title IV of ERISA has been incurred by
ERR or any ERISA Pension Plan since the effective date of ERISA that has
not been satisfied in full, other than liability for premiums that are
not yet due and payable to the Pension Benefit Guaranty Corporation, and
there exist no facts or circumstances which are expected to result in
such liability; (D) in accordance with Financial Accounting Standards
Board Statement No. 87, the aggregate assets of all ERISA Pension Plans
that are subject to Title IV of ERISA exceed the present value of the
aggregate accumulated benefit obligations (vested and non-vested)
accrued under all such plans as of January 1, 1988; and (E) ERR has not
announced any plan or legally binding commitment to create any
additional Company Plans or to modify or change any of the Company Plans
except as required by law. The Internal Revenue Service has issued a
letter for each ERISA Pension Plan determining that each plan is exempt
from United States federal income tax under Section 409(a) and 501(a) of
the Internal Revenue Code and there has been no occurrence since the
date of any such determination letter which has adversely affected such
qualification.
(c) Each Company Plan that is an "employee benefit plan," as such
term is defined in Section 3(3) of ERISA (each an "Employee Benefit
Plan") complies in all material respects with all applicable
requirements of ERISA and of the Internal Revenue Code, and other
applicable laws. Neither ERR, nor any of its directors, officers,
employees or agents has, with respect to any Employee Benefit Plan,
engaged in any "prohibited transaction" as such term is defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA, or
any conduct that would result in any taxes or penalties on prohibited
transactions under Section 4975 of the Internal Revenue Code or under
Section 502(i) of ERISA or in breach of fiduciary duty liability under
Section 409 of ERISA, which in the aggregate could be material to the
business, financial condition or results of operations of ERR. No
withdrawal liability has been incurred by or asserted against ERR with
respect to any Employee Benefit Plan which is a "multi-employer plan"
(as defined in Section 3(37) of ERISA).
(d) Except as set forth in SCHEDULE 2.24, ERR is not a party to
or obligated under any agreement, stock option, plan, contract or other
arrangement pursuant to which compensation, property or benefits will
become payable as a result of the consummation of the transactions
contemplated.
2.25 ENVIRONMENTAL COMPLIANCE.
(a) ERR has obtained all permits, licenses, and other
authorizations required under Environmental Laws (as defined below).
SCHEDULE 2.25 hereto sets forth a correct and complete list of all such
permits, licenses, and other authorizations obtained by ERR, copies of
which have been delivered to LSI. ERR is in full compliance with all
terms and conditions of such permits, licenses, and other
authorizations.
(b) Except as indicated on SCHEDULE 2.25, none of ERR or any of
its employees, agents, contractors or subcontractors have used,
generated, processed, stored, transported, recycled, Released or
otherwise handled any Hazardous Materials (as defined below) except as
permitted by law. Except as set forth on SCHEDULE 2.25 ERR is and has
been in compliance with all Environmental Laws. ERR has not received
any written notice from any governmental authority or any other person
related to any actual,
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threatened, or potential Release or presence of any Hazardous Materials
or any noncompliance with any Environmental Laws.
(c) As used herein "Hazardous Materials" include any (i)
"Hazardous Waste" as defined by The Resource Conservation and Recovery
Act of 1976 (42 U.S.C. Section 6901 et. seq.), as amended from time to
time ("RCRA"), and regulations promulgated thereunder; and "Hazardous
Substance" as defined by The Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et.
seq.), as amended from time to time ("CERCLA"), and regulations
promulgated thereunder; (ii) asbestos; (iii) polychlorinated biphenyls;
(iv) any substance, the presence of which on the premises of ERR's
business, is prohibited by applicable law; (v) off, petroleum or any
petroleum products or by-products; (vi) any other substance which,
according to applicable law, requires special handling or notification
of any Federal, state or local governmental entity in its collection,
processing, handling, storage, transport, treatment or disposal or
exposure thereto; (vii) any substance, which if not properly disposed,
may pollute, contaminate, harm or have any detrimental effect on the
environment; (viii) underground storage tanks, whether empty, filled or
partially filled with any substance; and (ix) any other pollutant, toxic
substance, hazardous substance, hazardous waste, hazardous material or
hazardous substance as regulated by or defined in or pursuant to any
Environmental Law, whether existing as of the date hereof, previously
enforced, or subsequently enacted.
(d) As used herein, "Release" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing.
(e) As used herein, "Environmental Laws" shall mean any
environmental or health and/or safety-related law, regulation, rule,
ordinance, or order at the Federal, state, or local level whether
existing as of the date hereof, previously enforced, or subsequently
enacted, including but not limited to: (i) CERCLA, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 USCA 9601 et
&g.; (ii) Solid Waste Disposal Act, as amended by RCRA, as amended by
the Hazardous and Solid Waste Amendments of 1984, 42 USCA 6901 et &g.;
(iii) Federal Water Pollution Control Act of 1972 as amended by the
Clean Water Act of 1977, as amended, 33 USCA 1251 et &q.; (iv) Toxic
Substances Control Act of 1976, as amended, 15 USCA 2601 et seq.; (v)
Emergency Planning and Community Right-to-Know Act of 1986, 42 ▇▇▇▇
▇▇▇▇▇ et &g.; (vi) Clean Air Act of 1966, as amended by the Clean Air
Act Amendments of 1990, 42 USCA 7401 et seq.; (vii) National
Environmental Policy Act of 1970, as amended, 42 USCA 4321 et seq.;
(viii) Rivers and Harbors act of 1970, as amended, 33 USCA 401 et seq.;
(ix) Endangered Species Act of 1973, as amended, 16 USCA 1531, et seq.;
(x) Occupational Safety and Health Act of 1970, as amended, 29 USCA 651
et seq.; (OSHA) Safe Drinking Water Act of 1974, as amended, 42 USCA 300
(f) et &q., and any other federal, state, or local law, regulation,
rule, ordinance or order, whether currently in existence or hereafter
enacted which governs:
(1) the existence, cleanup and/or remediation of toxic or
hazardous materials;
(2) the Release, emission, discharge or presence of Hazardous
Materials into or in the environment;
(3) the control of Hazardous Materials; or
(4) the use, generation, transport, treatment, storage, disposal,
removal or recovery of Hazardous Materials.
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2.26 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by ERR without the
intervention of any other person in such manner as to give rise to any valid
claim for a finder's fee, brokerage commission or other like payment.
2.27 BOOKS AND RECORDS. The lists of customers, distributors,
suppliers, the payment and credit histories of such customers and distributors,
all product, business and marketing plans, all customer product complaints, all
manufacturing cost sheets and all other files, business records and books and
ledgers of ERR relating to its business are true and accurate in all material
respects.
2.28 CONFLICTING PURCHASE AGREEMENTS. None of the Shareholder or ERR
has signed any letter of intent or other writing contemplating a commitment, or
has any commitment or legal obligation to any other person or entity to merge
or consolidate ERR, or sell, assign or transfer the Assets or any of the ERR
Stock.
2.29 DISCLOSURE. ERR and the Representing Shareholder have disclosed
to LSI all facts material to the transaction described in this Agreement. No
representation or warranty by ERR or the Representing Shareholder contained in
this Agreement and no statement contained in any certificate, exhibit,
schedule, list or other document furnished to LSI contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
2.30 SECURITIES MATTERS. As of the date hereof and the Closing Date:
(a) SPECULATIVE INVESTMENT. Shareholder acknowledges that
investing in LSI common stock is speculative and involves certain risks and
represents that he is prepared to and can bear the economic risk of such an
investment for an indefinite time.
(b) RESTRICTED LSI STOCK. Shareholder acknowledges that the
LSI common stock that Shareholder will receive in connection with the
transaction described herein will not have been registered pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), any other federal
securities laws, or any applicable state securities laws, that such securities
will be characterized as "restricted securities" under the federal securities
laws, and that under such laws and applicable regulations such securities
cannot be sold or otherwise disposed of without registration under the
Securities Act and any applicable state securities law or an exemption
therefrom or an opinion of counsel or other evidence reasonably satisfactory to
counsel to LSI that such registration is not required. In this connection,
Shareholder represents that Shareholder is familiar with Rule 144 promulgated
under the Securities Act, as currently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
(c) FURTHER RESALE RESTRICTIONS. Shareholder understands and
agrees that Shareholder may not transfer any of Shareholder's LSI common stock
prior to the first anniversary of the consummation of the transaction described
herein, except in connection with a merger in which LSI is not the surviving
corporation.
(d) INVESTMENT INTENT. Shareholder represents and warrants
that Shareholder is acquiring the LSI common stock for Shareholder's own
account, as a principal, for investment, and not with a view to, or for offer
or sale for LSI or an affiliate of LSI in connection with, any distribution of
all or part thereof, and Shareholder is not participating and does not have a
participation in any such distribution or the underwriting of any such
distribution, including, without limitation, such a participation with any
other shareholder of ERR.
AGREEMENT OF ACQUISITION
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13
(e) FUTURE SEC REGISTRATION NOT ASSURED. Shareholder
acknowledges that LSI is under no obligation to register the LSI common stock
issued to Shareholder pursuant to the Securities Act or any state securities
law.
(f) LEGEND. Shareholder acknowledges that the certificates
representing the LSI common stock to be delivered in connection with the
transaction described herein will be stamped or otherwise imprinted with a
legend in such form as LSI may require with respect to restrictions on sale or
transfer imposed by applicable securities laws, including, without limitation,
a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS
SUCH SHARES ARE FIRST REGISTERED UNDER THAT SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
Stop transfer instructions may be issued to the transfer agent for securities
of LSI or a notation may be made in the appropriate records of LSI in
connection with the LSI common stock issued in connection with this
transaction.
(g) INDEMNIFICATION. Shareholder agrees to indemnify and hold
harmless LSI from and against all liabilities, costs, or expenses arising out
of or in any way connected with any offer, sale, or other transfer or
distribution by Shareholder in violation of the Securities Act or any
applicable state securities law of any of the LSI common stock acquired by
Shareholder resulting from Shareholder's failure to exercise all available
rights and opportunity to conduct a significant due diligence investigation
into LSI.
(h) RECEIPT OF INFORMATION. Shareholder hereby represents and
warrants that Shareholder has been furnished with a copy of and carefully read
all information that Shareholder considers necessary or appropriate for
deciding whether to enter into this transaction and accept the LSI common stock
to be issued to Shareholder pursuant to this Agreement. Shareholder
acknowledges that Shareholder has been furnished with LSI's Annual Report on
Form 10-KSB for 1995, each of the Forms 10-QSB for 1996 and all Form 8-Ks filed
with the Securities and Exchange Commission ("SEC')since December 31, 1996.
Shareholder further represents and warrants that Shareholder understands that
LSI has not had substantial operations in the past, that its common stock has
historically been infrequently traded, has substantial blocks of stock held by
a few individuals, the purchase thereof involves a substantial risk of loss,
and that no representation or promises regarding the future value of the LSI
stock he is to receive has been made. Shareholder further represents and
warrants that Shareholder has had an opportunity to ask questions of and
receive answers from the officers of LSI regarding its operations and plan of
business and the terms and conditions of this reorganization under which LSI
Securities are to be issued, and to obtain such additional information (to the
extent LSI possesses the same or could acquire it without unreasonable effort
or expense) as Shareholder deemed necessary to make an informed investment
decision regarding acquisition of the LSI common stock.
(i) SHAREHOLDER WHEREWITHAL AND INVESTMENT EXPERIENCE.
Shareholder represents and warrants: (1) that Shareholder understands the term
"Accredited Investor" as defined in Rule 501 of Regulation D promulgated under
the Securities Act ("Regulation D"); and (2) either: (a) that Shareholder is an
Accredited Investor, because Shareholder, alone or with Shareholder's spouse,
has a net worth of over $1,000,000 or because Shareholder's income has been in
excess of $200,000 (or $300,000, together with the Shareholder's spouse's
income) in each of the two most recent years prior to the date hereof and is
expected to be in excess of such amount in 1993, or for some other reason, or,
(b) if not an
AGREEMENT OF ACQUISITION
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14
Accredited Investor, that Shareholder is capable of evaluating the merits and
risks of Shareholder's investment in the LSI common stock to be issued pursuant
to this Agreement and has the capacity to protect his own interests in
connection therewith, based on Shareholder's own business and financial
experience and knowledge or based on the collective business and financial
experience and knowledge of Shareholder and Shareholder's independent financial
advisor (i.e., a person who regularly as part of his business customarily is
compensated by persons who rely upon him for investment advice and decisions
and who is not directly or indirectly affiliated with or in a business
relationship with LSI). Shareholder acknowledges that Shareholder is able in a
business transaction such as the one contained in this Agreement to fend for
himself, and that Shareholder can bear the economic risk of an investment in
the LSI common stock.
(j) INVESTIGATION. Shareholder represents that he has such
sophistication in business matters that he can evaluate and does understand the
relative business merits and risks of this transaction with LSI. Shareholder
represents that he has had sufficient time and opportunity to ask questions of
and receive answers and documents from representatives of LSI relative to its
business and affairs.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LSI
LSI represents and warrants to the Shareholder as of the date hereof the
following:
3.1 ORGANIZATION AND GOOD STANDING. LSI is a duly organized and
validly existing corporation in good standing under the laws of the State of
Nevada and has the corporate power and authority to own its properties and
conduct its business as presently conducted.
3.2 AUTHORITY AND AUTHORIZATION. LSI has the power and authority to
enter into and perform this Agreement and the transactions contemplated hereby,
and the performance of the terms and provisions hereof to be performed by LSI
has been duly authorized by all requisite corporate and action by LSI. This
Agreement constitutes a legal, valid, and binding obligation of LSI enforceable
in accordance with its terms, except as such enforceability may be limited by
general principles of equity and subject to bankruptcy or other laws relating
to or affecting the rights of creditors generally.
3.3 CAPITALIZATION. The authorized Stock of LSI consists of
150,000,000 shares of Common Stock, $.001 par value per share. As of the date
hereof, 15,431,950 shares of LSI Common Stock were validly issued and
outstanding, fully paid and nonassessable and no other shares of LSI Stock were
outstanding. All of the shares of LSI Common Stock issued in accordance with
this Agreement will be, when so issued, duly authorized, validly issued, fully
paid and nonassessable and free of preemptive rights.
3.4 CONSENTS AND APPROVAL. Except for (i) actions already taken by
LSI, (ii) consents already obtained by LSI, and (iii) LSI's compliance with
applicable federal and state securities laws, statutes, rules and regulations,
there is no requirement applicable to LSI to make any filing with, or to obtain
any permit, authorization, consent or approval of, any governmental or
regulatory authority as a condition to the lawful consummation by LSI of the
transactions contemplated by this Agreement.
3.5 LITIGATION. LSI is not subject to any Litigation that might
impair the ability of LSI to carry out the provisions of this Agreement.
3.6 BROKER. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by LSI without
AGREEMENT OF ACQUISITION
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15
the intervention of any other person in such manner as to give rise to any
valid claim for a finder's fee, brokerage commission or other like payment.
3.7 NON-CONTRAVENTION. The execution, delivery and performance by
LSI of this Agreement, and the other agreements contemplated hereby and
thereby, will not (a) conflict with or result in a violation of any provision
of the charter or bylaws of LSI or any subsidiary, (b) except as set forth on
SCHEDULE 3.7 attached hereto, conflict with or result in a violation of any
provision of, or constitute (with or without the giving of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation or acceleration under, any bond, debenture, note, mortgage,
indenture, lease, agreement or other instrument or obligation to which LSI is a
party or by which its respective properties or assets may be bound, which
default would have a material adverse effect on the business, properties or
financial condition of LSI or its subsidiaries taken as a whole, or (c) result
in a violation by LSI of any statute or law or any judgment, order, decree,
rule or regulation of any governmental body to which LSI is subject, which
violation would have a material adverse effect on the ownership of the
business, properties or financial condition of LSI or its subsidiaries taken as
a whole.
3.8 DISCLOSURE. LSI has disclosed to ERR and the Shareholder all
facts material to the transaction described in this Agreement. No
representation or warranty by LSI contained in this Agreement and no statement
contained in any certificate, exhibit, schedule, list or other document
furnished to ERR and the Shareholder contains any untrue statement of material
facts or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
3.9 SECURITIES MATTERS. As of the date hereof and the Closing Date:
(a) SPECULATIVE INVESTMENT. LSI acknowledges that investing
in ERR common stock is speculative and involves certain risks and represents
that it is prepared to bear the economic risk of such an investment.
(b) RESTRICTED ERR STOCK. LSI acknowledges that the ERR
common stock that LSI will receive in connection with the transaction described
herein will not have been registered pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), any other federal securities laws, or any
applicable state securities laws, that such securities will be characterized as
"restricted securities" under the federal securities laws, and that under such
laws and applicable regulations such securities cannot be sold or otherwise
disposed of without registration under the Securities Act and any applicable
state securities law or an exemption therefrom or an opinion of counsel or
other evidence reasonably satisfactory to counsel to ERR that such registration
is not required.
(c) INVESTMENT INTENT. LSI represents and warrants that LSI
is acquiring the ERR common stock for LSI's own account, as a principal, for
investment, and not with a view to, or for offer or sale for ERR or an
affiliate of ERR in connection with, any distribution of all or part thereof,
and LSI is not participating and does not have a participation in any such
distribution or the underwriting of any such distribution, including, without
limitation, such a participation with any other shareholder of ERR.
(d) LEGEND. LSI acknowledges that the certificates
representing the ERR common stock to be delivered in connection with the
transaction described herein will be stamped or otherwise imprinted with a
legend in such form as ERR may require with respect to restrictions on sale or
transfer imposed by applicable securities laws, including, without limitation,
a legend in substantially the following form:
AGREEMENT OF ACQUISITION
PAGE 14
16
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS
SUCH SHARES ARE FIRST REGISTERED UNDER THAT SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
Stop transfer instructions may be issued to the transfer agent for securities
of ERR or a notation may be made in the appropriate records of ERR in
connection with the ERR common stock issued in connection with this
transaction.
(e) RECEIPT OF INFORMATION. LSI hereby represents and
warrants that LSI has been furnished with a copy of and carefully read all
information that LSI considers necessary or appropriate for deciding whether to
enter into this transaction, and accept the ERR common stock to be issued to
LSI pursuant to this Agreement. LSI acknowledges that LSI has been furnished
with substantial information regarding ERR and its business, properties, and
financial position. LSI further represents and warrants that LSI has had an
opportunity to ask questions of and receive answers from the officers of ERR
regarding its operations and plan of business and the terms and conditions of
this reorganization under which ERR Securities are to be issued and to obtain
such additional information (to the extent ERR possesses the same or could
acquire it without unreasonable effort or expense) as LSI deemed necessary to
make an informed investment decision regarding acquisition of the ERR common
stock.
ARTICLE 4
COVENANTS AND AGREEMENTS
4.1 FAIR VALUE DETERMINATION. The parties hereto agree the
consideration to be exchanged shall as to each be deemed fair value without the
need for independent third party appraisals.
4.2 MANUFACTURING FACILITY AND WORKING CAPITAL. LSI agrees that it
shall:
(a) provide a manufacturing facility to ERR suitable for the manufacture
of the refrigeration units using the patented process of ERR to complete orders
with ERR existing on the Closing Date for refrigeration units for the fishing
and shrimping industry;
(b) provide reasonable working capital to ERR for the purpose of
completing the orders with ERR existing on the Closing Date for refrigeration
units for the fishing and shrimping industry; and
(c) use its reasonable efforts to provide ongoing marketing services
for the development of new markets for the refrigeration units using the
patented process hold by ERR.
ARTICLE 5
CONDITIONS
5.1 CONDITIONS TO LSI'S OBLIGATION TO ISSUE STOCK. The obligations of
LSI to issue shares of its stock to the Stockholder is subject to the
fulfillment, on or before the Closing Date, of the following condition
precedent, which may be waived in writing at the sole discretion of LSI:
(a) OCCURRENCE OF CLOSING. The Closing shall have occurred on or
before April 30, 1997; and
(b) DELIVERIES AT CLOSING. All documents required by Section 1.4(a)
shall be delivered to and found acceptable by LSI.
AGREEMENT OF ACQUISITION
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5.2 CONDITIONS TO ERR AND STOCKHOLDER'S OBLIGATION TO CLOSE. The
obligations of ERR and Stockholder to Close is subject to the fulfillment, on
or before the Closing Date of the following:
(a) DELIVERIES AT CLOSING. All documents required by Section 1.4(b)
shall be delivered to ERR and Stockholder.
ARTICLE 6
INDEMNIFICATION
6.1 INDEMNIFICATION BY SHAREHOLDER. Shareholder hereby agrees to
indemnify LSI and ERR (hereinafter collectively referred to in this Section 6.1
only as the "Indemnitee") and hold the Indemnitee harmless from and against any
and all losses, liabilities, costs, damages, or expenses, including, without
limitation, reasonable attorneys' fees and expenses, and out-of-pocket payments
for taxes, penalties and interest, that any Indemnitee may incur or suffer by
reason of, either directly or indirectly, the inaccuracy of any representation
or warranty, or the breach of any agreement or covenant, of any of the
Representing Shareholder or Shareholder or ERR contained herein, relating to
claims or events arising prior to the Closing Date to which the Assets or any
Indemnitee may be subject (collectively called "Losses"); PROVIDED, HOWEVER, in
the event that Shareholder is found by a court of competent jurisdiction not to
be liable for any representation, warranty or breach by ERR or any Shareholder,
then LSI shall reimburse to Shareholder such reasonable legal costs and
expenses incurred by Shareholder directly related to his defense against such
claim.
6.2 INDEMNIFICATION BY LSI. LSI hereby agrees to indemnify the
Shareholder (hereinafter collectively referred to in this Section 6.2 only as
the "Indemnitee") and hold the Indemnitee harmless from and against any damages
that any Indemnitee may directly incur or suffer by reason of the inaccuracy of
any representation or warranty, or the breach of any agreement or covenant, of
LSI contained herein to which the Indemnitee may be subject.
ARTICLE 7
TERMINATION, AMENDMENT, WAIVER
7.1 TERMINATION. Anything contained herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and abandoned:
(a) at any time before the Closing by either the Board of Directors
of LSI or the Board of Directors of ERR if any court of competent
jurisdiction in the United States or other United States
governmental body has issued an order, decree or ruling or taken
any other action restraining, enjoining or otherwise prohibiting
this reorganization; and
(b) by the non-defaulting party if at Closing the defaulting party
fails to deliver the documents required for Closing.
In the event of termination and abandonment under this Article 8, this
Agreement shall forthwith become void and there shall be no liability on the
part of LSI or ERR or their respective officers and directors of Shareholder;
provided, however, that the obligations pursuant to Section 8.4 respecting
costs and expenses shall remain in full force and effect. No such termination
shall relieve any party hereto of any liabilities for any breach of this
Agreement.
7.2 AMENDMENT. This Agreement may not be amended or supplemented
except in writing signed by the parties hereto pursuant to due authorization
AGREEMENT OF ACQUISITION
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by each party's Board of Directors in accordance with each party's Bylaws and
other governing rules and regulations.
ARTICLE 8
MISCELLANEOUS
8.1 NOTICE. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecommunications) and delivered personally or sent by telecopy or other wire
transmission (with request for assurance in a manner typical with respect to
communications of that type), Federal Express or other overnight air courier
(postage prepaid), registered or certified mail (postage prepaid with return
receipt requested), addressed to the parties at such addresses as stated next
to their signatures hereinbelow, or such other address of which such party or
parties may give written notice to the other parties to this Agreement. Unless
otherwise specified herein, such notices or other communications shall be
deemed received: (a) on the date delivered, if delivered personally or by wire
transmission; (b) three (3) business days after mailing, (c) one (1) day after
deposit with an overnight air courier; or (d) on the date of receipt, if sent
by registered or certified mail, return receipt requested.
8.2 SUCCESSORS AND ASSIGNS. The rights and obligations of the
parties under this Agreement will inure to the benefit of the parties and will
be binding upon their respective heirs, legal representatives, successors and
permitted assigns.
8.3 ENTIRE AGREEMENT; ATTACHMENTS.
(a) This Agreement, all Schedules and exhibits hereto, and all
agreements and instruments to be delivered by the parties pursuant hereto
represent the entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and supersede all prior oral and
written agreements, and all contemporaneous oral negotiations, commitments and
understandings between such parties except as expressly provided herein.
(b) If the provisions of any Schedule or exhibit to this Agreement
are inconsistent with the provisions of this Agreement, the provisions of the
Agreement shall prevail. The exhibits and Schedules attached hereto or to be
attached hereafter are hereby incorporated as integral parts of this Agreement.
Any reference in this Agreement to a specific Section shall also be deemed a
reference to that portion of the Schedules and other documents referenced
herein relating to such Section.
8.4 EXPENSES. Except as otherwise expressly provided herein, LSI,
ERR and the Shareholder shall each pay their own expenses in connection with
this Agreement and the transactions contemplated hereby.
8.5 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas without reference to conflicts
of laws rules or principles.
8.6 SECTION HEADINGS. The section headings are for the convenience
of the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.
8.7 INVALID PROVISIONS. It is the intent of the parties that the
provisions hereof shall, to the fullest extent permissible under the law and
consistent with public policy, be enforced and that the unenforceability (or
the modification necessary to conform with such law and public policy) of any
provision hereof shall not be deemed to render unenforceable any other
provision hereof. Accordingly, if any provision hereof shall be adjudicated to
be invalid
AGREEMENT OF ACQUISITION
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or unenforceable in any action or proceeding in which any of the Shareholder or
their respective heirs, executors or administrators and ERR or the successors
or assigns of ERR are parties, whether in its entirety or as modified as to
duration, customers, employees or otherwise, then such part shall be deemed
deleted or amended, as the case may be, from this Agreement in order to render
the remainder hereof both valid and enforceable. Any such deletion or
amendment shall apply only where the court rendering the same has jurisdiction.
8.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
8.9 SURVIVAL. All representations and warranties and all obligations
of the parties hereunder required to be performed after the closing shall
survive the Closing.
8.10 ASSIGNMENT. Neither party hereto shall assign this Agreement or
any rights, obligations or duties hereunder without first obtaining the written
consent of the other party.
8.11 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT OF JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY MATTER ARISING HEREUNDER.
8.12 DRAFTING. No provision of this Agreement shall be interpreted for
or against either party hereto on the basis that such party was the draftsman
of such provision, both parties having participated equally in the drafting
hereof.
8.13 LEGAL COUNSEL. ERR and Shareholder each acknowledge that counsel
to LSI has not, either directly or indirectly undertaken to represent either of
them or provide them legal or business advise with respect to the transactions
contemplated by this Agreement.
8.14 ALTERNATE DISPUTE RESOLUTION. In the event of a dispute between the
parties hereto arising out of or related to this Agreement (the "Dispute"), the
parties agree to utilize the procedures specified in Attachment I hereto (the
"Procedure"), except when otherwise modified by written agreement of the
parties at the time the dispute arises.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of and on the date first above written.
LONE STAR INTERNATIONAL ENERGY, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
ENERGY RECLAIM REFRIGERATION, INC.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, individually
AGREEMENT OF ACQUISITION
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