Exhibit 10.21
STOCK PURCHASE AGREEMENT
By and Among
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. CYRUS, ▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ AS CUSTODIAN FOR THE ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, AND ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Shareholders of CONTROL PRODUCTS OF LOUISIANA, INC.
And
T-3 ENERGY SERVICES, INC.
DATED: SEPTEMBER 29, 2000
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TABLE OF CONTENTS
Page
STOCK PURCHASE AGREEMENT .................................................. 1
RECITALS: ................................................................. 1
AGREEMENT: ................................................................ 1
1. Agreement to Sell and Agreement to Purchase ........................... 1
1.1. Purchase of Shares from Shareholders ....................... 1
1.2. Further Assurances ........................................ 1
1.3. Closing ................................................... 2
2. Consideration to be Paid by Buyer ..................................... 2
2.1. Purchase Price for Shares ................................. 2
2.2. Payment of Purchase Price ................................. 2
2.3. Purchase Price Adjustment ................................. 3
3. Representations and Warranties of Sellers ............................. 5
3.1. Organization and Good Standing ............................ 5
3.2. Authorization of Agreement ................................ 6
3.3. Ownership of Shares ....................................... 6
3.4. Capitalization ............................................ 6
3.5. Financial Condition ....................................... 7
3.6. Property of the Company ................................... 8
3.7. Agreement Not in Breach of Other Instruments .............. 10
3.8. Employment Agreements; Employee Benefits .................. 11
3.9. Labor and Employment Matters .............................. 15
3.10. Litigation ................................................ 16
3.11. Contracts ................................................. 16
3.12. Regulatory Approvals ...................................... 18
3.13. Compliance with Law ....................................... 18
3.14. Indebtedness from Employees ............................... 18
3.15. Accounts Receivable ....................................... 18
3.16. Insurance ................................................. 18
3.17. Powers of Attorney and Suretyships ........................ 19
3.18. No Undisclosed Liabilities ................................ 19
3.19. Environmental Matters ..................................... 19
3.20. Conflict of Interest ...................................... 20
3.21. Taxes ..................................................... 21
3.22. Liens ..................................................... 26
3.23. Other Information ......................................... 27
3.24. No Other Representations .................................. 27
3.25. No Known Breaches ......................................... 27
4. Representations and Warranties of Buyer ............................... 27
4.1. Organization .............................................. 27
4.2. Corporate Authority ....................................... 27
4.3. Agreement Not in Breach of Other Instruments .............. 28
4.4. Investment Intent ......................................... 28
4.5. Regulatory and Other Approvals ............................ 28
4.6. No Known Breaches ......................................... 28
4.7. Other Information ......................................... 28
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4.8. FINANCIAL CAPABILITY ...................................... 28
4.9 BUSINESS KNOWLEDGE......................................... 29
4.10. No Other Representations .................................. 29
5. Certain Understandings and Agreements of the Parties .................. 29
5.1. Cooperation in Litigation ................................. 29
5.2. Tax Matters ............................................... 29
5.3. Employment and Confidentiality Agreements ................. 31
5.4. Lease ..................................................... 32
5.5. BUYER'S INSURANCE ......................................... 32
5.6. RELEASE OF SELLERS' GUARANTEES ............................ 32
6. Indemnification ....................................................... 32
6.1. Indemnification by Sellers ................................ 32
6.2. Indemnification by Buyer .................................. 34
6.3. Claims for Indemnification ................................ 36
6.4. Defense by Indemnifying Party ............................. 36
6.5. Manner of Indemnification ................................. 37
6.6. Limitations on Indemnification ............................ 37
6.7. Sole Basis for Recovery ................................... 38
6.8. Joint and Several Liability ............................... 38
7. Documents To Be Delivered At Closing .................................. 39
7.1. Closing Documents Delivered by Sellers .................... 39
7.2. Closing Documents Delivered by Buyer ...................... 40
8. Release ............................................................... 40
9. Miscellaneous ......................................................... 41
9.1. Notices ................................................... 41
9.2. Assignability and Parties in Interest ..................... 42
9.3. Governing Law ............................................. 42
9.4. Counterparts .............................................. 42
9.5. Indemnification for Brokerage ............................. 42
9.6. Publicity ................................................. 42
9.7. Complete Agreement ........................................ 43
9.8. Interpretation ............................................ 43
9.9. Severability .............................................. 43
9.10. Knowledge: Due Diligence Investigation ................... 43
9.11. Expenses of Transactions .................................. 43
9.12. Limit on Interest ......................................... 43
9.13. Submission to Jurisdiction ................................ 43
9.14. Arbitration ............................................... 44
9.15. Waiver of Punitive Damages ................................ 44
9.16. CROSS REFERENCE ........................................... 44
9.17. COUNTERPARTS .............................................. 44
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EXHIBITS
EXHIBIT A ESCROW AGREEMENT
EXHIBIT 2.3.1. FORM OF CLOSING BALANCE SHEET
EXHIBIT 5.3.1. EMPLOYMENT AGREEMENT
SCHEDULES
Schedule 2.2.1. Sellers' Wire Transfer Instructions
SCHEDULE 2.3.1. FORM OF BALANCE SHEET
Schedule 3.1. Louisiana Parishes in which the Company does Business
SCHEDULE 3.3. TRANSFER RESTRICTIONS
SCHEDULE 3.4. SELLERS' OWNERSHIP PERCENTAGES
Schedule 3.5.1. Financial Statements
Schedule 3.5.2. Assets Transferred Other than in the Ordinary Course
of Business
SCHEDULE 3.5.2. (III) CERTAIN COMPENSATION INCREASES
Schedule 3.6.1. Real Property
SCHEDULE 3.6.1.3. PERMITS AND LICENSES
Schedule 3.6.2. Inventory
Schedule 3.6.3. Tangible Personal Property; List of leased vehicles, copiers
and telephone systems
Schedule 3.6.4. Intangible Personal Property
Schedule 3.6.5. Subsidiaries
Schedule 3.7. Consents
Schedule 3.8.1 Labor and Employment Matters
Schedule 3.8.2. Employee Benefit Plans
Schedule 3.9.1. Collective Bargaining
Schedule 3.9.2. Labor Disputes
Schedule 3.10. Litigation
Schedule 3.11. Contracts
Schedule 3.14. Employee Indebtedness
Schedule 3.15. Accounts Receivable
Schedule 3.16. Insurance
Schedule 3.20. Conflicts
Schedule 3.21.2. Taxable Years/Examinations
Schedule 3.21.3. Tax Returns, etc.
Schedule 3.21.3.7. Tax Affiliates
Schedule 3.21.3.22. Tax Returns Within 60 Days
Schedule 3.21.3.23. Tax Jurisdictions
Schedule 3.22. Description of Company Indebtedness Guaranteed by Sellers;
Liens on Assets
Schedule 6.1.8. Environmental Matters
Schedule 9.5. Brokerage
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this 29th day of September, 2000 by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. CYRUS, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AS CUSTODIAN OF ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, AND ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
("Sellers"), being all the shareholders of CONTROL PRODUCTS OF LOUISIANA, INC.,
a Louisiana corporation (the "Company"), and T-3 ENERGY SERVICES, INC., a
Delaware corporation ("Buyer").
RECITALS:
1. Sellers own all outstanding shares of the common stock, no par
value (the "Shares") of the Company.
2. The Company is presently engaged in the business of the sale,
remanufacture, repair, and service of flow control equipment
3. SELLERS DESIRE TO SELL TO BUYER THE SHARES, AND BUYER DESIRES TO
ACQUIRE THE SHARES ON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH.
AGREEMENT:
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL
PROMISES CONTAINED HEREIN, THE PARTIES HERETO COVENANT AND AGREE AS FOLLOWS:
1. AGREEMENT TO SELL AND AGREEMENT TO PURCHASE.
1.1. PURCHASE OF SHARES FROM SHAREHOLDERS.
ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH HEREIN,
SELLERS HEREBY SELL, TRANSFER, CONVEY, ASSIGN AND DELIVER TO BUYER,
FREE AND CLEAR OF ALL LIENS, PLEDGES, ENCUMBRANCES AND CLAIMS
WHATSOEVER, AND BUYER HEREBY PURCHASES, ACQUIRES AND ACCEPTS FROM
SELLERS ALL THE SHARES. SELLERS SHALL DELIVER TO BUYER CERTIFICATES
REPRESENTING THE SHARES, DULY ENDORSED FOR TRANSFER AT THE CLOSING (AS
DEFINED IN SECTION 1.3. HEREOF).
1.2. FURTHER ASSURANCES.
From time to time after the Closing, Sellers and Buyer, and each
of their respective affiliates, will execute and deliver to the other
party such instruments of sale, transfer, conveyance, assignment and
delivery, consents, assurances, powers of attorney and other
instruments as may be reasonably requested by counsel for Buyer or
Sellers in order to vest in Buyer all right, title and interest of
Sellers in and to the Shares and otherwise in order to carry out the
purpose and intent of this Agreement.
1.3. CLOSING.
The closing (the "Closing") of the transactions herein
contemplated shall take place at the offices of Liskow & ▇▇▇▇▇ at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and be effective as of 10:00 a.m.,
local time, on the date
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hereof (the "Closing Date"). All actions taken and all documents
delivered at the Closing shall be deemed to have occurred
simultaneously.
2. CONSIDERATION TO BE PAID BY BUYER.
2.1. PURCHASE PRICE FOR SHARES.
The purchase price for the Shares shall be an amount ("Purchase
Price") equal to $6,300,000.00 plus or less, as the case may be, any
Adjustment Amount (as defined in Section 2.3.) and less the amounts,
as of the Closing Date, of the indebtedness owed by the Company to
▇▇▇▇▇▇▇ ▇▇▇▇▇ on the Company's line of credit and the amount due to
the Company's Plan (as defined in Section 3.8.12. below). As soon as
possible after the Closing, Buyer shall cause the Company to satisfy
(via wire transfer) the amounts due and owing to ▇▇▇▇▇▇▇ ▇▇▇▇▇ on the
Company's line of credit and to the Plan.
2.2. PAYMENT OF PURCHASE PRICE.
2.2.1. CASH TO SELLERS.
At the Closing, Buyer shall pay in immediately available
funds by wire transfer (pursuant to the instructions set forth on
Schedule 2.2.1.) to Sellers the cash portion of the Purchase
Price, less the Escrow Amount (as defined in Section 2.2.2.), to
the separate accounts of Sellers in the following percentages:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 26.72%
▇▇▇▇▇▇ ▇. Cyrus 15.86%
▇▇▇▇▇ ▇. ▇▇▇▇▇ 15.86%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 15.86%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 6.48%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as Custodian for ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 6.48%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 4.90%
▇▇▇▇ ▇▇▇▇▇▇ 1.96%
▇▇▇▇▇ ▇▇▇▇▇▇ 1.96%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1.96%
▇▇▇▇▇▇ ▇▇▇▇▇ 1.96%
2.2.2. RETENTION OF ESCROW.
Buyer shall place in escrow with Hibernia National Bank ten
percent (10%) of the Purchase Price (the "Escrow Amount"), which
shall be subject to Section 6. and the Adjustment Amount (as
defined in Section 2.3.). Distribution of the Escrow Amount shall
be pursuant to an Escrow Agreement in the form of Exhibit A. The
Escrow Amount, after taking into account any claims pursuant to
and any Adjustment Amount payable to Buyer to the extent not paid
by Sellers, shall be paid to Sellers with interest of 6% per
annum as follows:
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2.2.2.1.
On (i) March 31, 2001, or (ii) the date on which the
Closing Financial Statement becomes final based on the
approval thereof by Buyer and Sellers, whichever occurs
first, Buyer shall cause the Escrow Agent to pay to Sellers,
in the percentages set forth in Section 2.2.1. (except that
the percentages of Majority Shareholders shall be paid
pursuant to the written instructions of the Majority
Shareholders as provided to Escrow Agent), $315,000.00, less
(i) any amount claimed pursuant to Section 6. by Buyer up to
March 31, 2001, and (ii) any Adjustment Amounts payable to
Buyer to the extent not paid by Sellers, including interest
earned on any such amounts in the Escrow Account. The term
"Majority Shareholders" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ individually
and as custodian for ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Cyrus, and
▇▇▇▇▇ ▇. ▇▇▇▇▇.
2.2.2.2.
On September 30, 2001, Buyer shall pay to Sellers, in
the percentages set forth in Section 2.2.1. (except that the
percentages of Majority Shareholders shall be paid pursuant
to the written instructions of the Majority Shareholders as
provided to Escrow Agent), any remaining portion of the
Escrow Amounts, less any amount claimed pursuant to Section
6. by Buyer up to September 30, 2001 and any Adjustment
Amount payable to Buyer to the extent not paid by Sellers,
plus interest accrued on any such amount.
2.3. PURCHASE PRICE ADJUSTMENT.
2.3.1. On or before 45 days after the Closing Date, Buyer
shall prepare, and deliver to Sellers, from the Company's books
and records and from a physical inventory conducted under the
supervision of Buyer on or about the date hereof (the "Physical
lnventory") and, to the extent possible, on a basis consistent
with the preparation of the April 30, 2000 financial information
provided to Buyer by Sellers (as set forth in Schedule 3.5.1.)
(the "Company's April 30, 2000 Financial Statement"), a Balance
Sheet for the Company as of the close of business on September
30, 2000 prepared in accordance with generally accepted
accounting principles ("GAAP"), in the form of Schedule 2.3.1.
(the "Closing Financial Statement"), in order to determine the
"Adjustment Amount," (as defined below). Sellers shall assist and
consult with Buyer, in the preparation of the Closing Financial
Statement. The "Adjustment Amount" shall mean the amount by which
the Net Working Capital as shown on the Closing Financial
Statement deviates from $1 Million. For these purposes, the
definition of `Net Working Capital' shall be current assets
(defined as the current assets as titled on the Company's April
30, 2000 Financial Statement excluding accounts receivable from
Officers or any of the Sellers) less current liabilities (defined
as the current liabilities as titled on the April 30, 2000
Financial Statement less: (i) amount due ▇▇▇▇▇▇▇ ▇▇▇▇▇ WCMA; and
(ii) amount due the Retirement Plan). Furthermore, the Physical
Inventory shall be valued using the historical method employed by
the Company in compiling the December 31, 2000 Financial
Statement of the Company, however, the final Physical Inventory
number must be
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agreed upon by both Sellers' representative, ▇▇▇▇▇▇ ▇. Cyrus, and
Buyer's representative, ▇▇▇▇▇▇▇ ▇▇▇▇, as of the Closing. In the
event Net Working Capital, based on the Closing Financial
Statement, is (a) less than $1,000,000.00, the Purchase Price
will be decreased by the amount of the shortfall or (b) more than
$1,000,000.00, the Purchase Price will be increased by the amount
of the overage (herein called the "Adjustment Amount").
2.3.2. At Sellers' expense, Broussard, Poche, ▇▇▇▇▇ & ▇▇▇▇▇▇
("Seller's Accountant") may assist Sellers in reviewing the
Closing Financial Statement. Upon reasonable notice and during
reasonable business hours, Buyer shall allow Sellers and Seller's
Accountant access to the persons involved in the preparation of
the Closing Financial Statement and the Company's April 30, 2000
Financial Statement and to all of their workpapers so as to
permit Sellers and Seller's Accountant to make copies of such
workpapers supporting the amounts included in the Closing
Financial Statement and to reasonably review the accounting
procedures, tests, methods and approaches utilized by Buyer.
2.3.3. On or before the 15th day following delivery of the
Closing Financial Statement pursuant to Section 2.3.1., Sellers
shall notify Buyer in writing of any objections to the Closing
Financial Statement (and the determination of the Adjustment
Amount) as not complying with the requirements of Section 2.3.1.,
specifying in reasonable detail any such objections (a "Dispute
Notice"). If (i) Sellers do not deliver a Dispute Notice within
the time period specified above for delivery of a Dispute Notice
(the "Notice Period"), (ii) prior to the expiration of the Notice
Period, Sellers indicate in writing to Buyer that Sellers
relinquish their right to object to the Closing Financial
Statement, or (iii) Buyer and Sellers agree on the resolution of
all such objections or changes at any time subsequent to the
expiration of the Notice Period, the Closing Financial Statement,
with any such changes as are agreed upon, shall be final and
binding on the parties hereto. If Sellers and Buyer (through
their respective accountants, namely Seller's Accountant and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP) are unable to resolve the matters addressed
in any Dispute Notice, each party shall within twenty (20)
business days after the delivery of such Dispute Notice,
summarize its position with regard to such dispute in a written
document of ten pages or less and submit such summaries to the
Houston, Texas office of ▇▇▇▇▇▇ Pricewaterhousecoopers, or such
other party as the parties may mutually select (the "Accounting
Arbitrator"), together with the Dispute Notice, the most recent
Closing Financial Statement and any other documentation either
party may desire to submit. The Accounting Arbitrator shall
render a decision regarding such dispute in accordance with this
Agreement, based on the materials described above and based upon
the books and records of the Company and the Physical Inventory
within twenty business days of the submission of such materials.
Any decision rendered by the Accounting Arbitrator pursuant
hereto shall be final and binding between the parties for the
purpose of
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determining the Adjustment Amount under this Section 2.3. Within
ten days after the final determination of the Closing Financial
Statement pursuant to Section 2.3.3., either (i) Buyer shall pay
to Sellers, in immediately available funds, by wire transfer, an
amount equal to the Adjustment Amount, or (ii) Sellers shall pay
to Buyer, in immediately available funds, by wire transfer, an
amount equal to the Adjustment Amount, as provided in Section
2.3.1. above. If Sellers fail to make such payment then Buyers
are authorized to apply any or all of the Escrow Amount to such
payment.
In addition, any accrual of bonuses made on the Closing Financial
Statement that are not paid by Company on or before March 15,
2001 shall be paid to Sellers on March 31, 2001 or within five
(5) days after the Company's receipt of its year 2000 audited
financial statement, whichever occurs first, as an additional
Purchase Price Adjustment.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS.
Subject to the limitations set forth in Section 6., Sellers represent
and warrant to Buyer that:
3.1. ORGANIZATION AND GOOD STANDING.
Each of the Company and the Subsidiaries (as defined in Section
3.6.5.) is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it was formed, with full power
to carry on its business as it is now and has since its organization
been conducted, and to own, lease or operate its assets. Either the
Company or one of the Subsidiaries is duly authorized to do business
and is in good standing in such other jurisdictions in which the
failure to so qualify could have a material and adverse effect on the
results of operations, properties, assets, condition (financial or
otherwise), or prospects of the Company (a "Material Adverse Effect").
3.2. AUTHORIZATION OF AGREEMENT.
Sellers have all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This
Agreement and all other agreements and instruments to be executed by
Sellers or their affiliates in connection herewith have been duly
executed and delivered by Sellers or their affiliates, have been
effectively authorized by all necessary action, corporate or
otherwise, and constitute legal, valid and binding obligations of
Sellers or their affiliates, as the case may be.
3.3. OWNERSHIP OF SHARES.
The Shares are owned beneficially and of record by Sellers, and
are being transferred to Buyer free and clear of all liens, mortgages,
pledges, security interests, restrictions, prior assignments,
encumbrances and claims of any kind
EX-190
or nature whatsoever. Except as set forth in Schedule 3.3., no Shares
are subject to any restriction with respect to their transferability
(other than restrictions on transfer under applicable Federal and
state securities laws).
3.4. CAPITALIZATION.
The authorized capital stock of the Company consists solely of
100,000 shares of common stock, no par value, of which 19,616 are
issued and outstanding and which are owned by Sellers in the
percentages set forth on Schedule 3.4. All of the Shares have been
duly authorized, validly issued (free of all past, present and future
preemptive rights, except for preemptive rights in favor of the
Company's shareholders as set forth in the Company's Articles of
Incorporation), and are fully paid and non-assessable. There are no
outstanding or authorized options, warrants, subscriptions, calls,
puts, conversion or other rights, contracts, agreements, commitments
or understandings of any kind obligating the Company to issue, sell,
purchase, return, redeem or pay any distribution or dividend with
respect to any shares of capital stock of the Company or any other
securities convertible into, exchangeable for or evidencing the right
to subscribe for any shares of capital stock of or other ownership
interest in the Company, except as set forth on Schedule 3.4.
3.5. FINANCIAL CONDITION.
3.5.1.
Financial Statements. Schedule 3.5.1. sets forth certain
financial information concerning the Company as of April 30, 2000
(the "April 30, 2000 Financial Statement"), the income statement
for the calendar years 1997, 1998, and 1999 and for the four
month period ending April 30, 2000 and the balance sheets for the
Company as of the last day of each such period (collectively,
with the Company's April 30, 2000 Financial Statement, the
"Financial Statements"). Except as disclosed on Schedule 3.5.1.,
the Financial Statements (i) are true, complete and correct in
all material respects; (ii) fairly and accurately present the
financial position of Company as of the periods described therein
and the results of the operations of Company for the periods
indicated; and (iii) have been prepared in accordance with the
method of accounting described in the said Financial Statements
and on Schedule 3.5.1.
3.5.2.
Absence of Certain Changes. Since April 30, 2000 (the
"Balance Sheet Date") there has not been (i) any damage,
destruction or loss, whether or not covered by insurance, which,
if not covered by insurance, could be a Material Adverse Effect;
(ii) any sale or transfer of any of the assets of the Company
except (a) sales in the ordinary course of the business of
inventory or immaterial amounts of other tangible personal
property and (b) for the transfers listed on Schedule 3.5.2.;
(iii) any increase in, or commitment to increase, the
EX-191
compensation payable or to become payable to any of the Company's
employees or any bonus payment (other than as included as an
accrued liability on the Company's April 30, 2000 Financial
Statement) or similar arrangement made to or with any of the
Company's employees other than routine increases made in the
ordinary course of business not exceeding the greater of five
percent per annum or Two Thousand Dollars ($2,000) per annum for
any of them individually except as set forth on Schedule 3.5.2.
(iii); (iv) any adoption of a plan or agreement or amendment to
any plan or agreement providing any new or additional fringe
benefits; or (v) any material alteration in the manner of keeping
the Company's books, accounts or records, or in the accounting
practices therein reflected. Since the Balance Sheet Date, the
Company has not (except with the prior written consent of Buyer):
(a) entered into any material transaction not in the ordinary
course of business; or (b) materially amended, modified, or
terminated any material Contract (as defined in Section 3.11.1.)
other than in the ordinary course of its business, and further
except as set forth on Schedule 3.5.2.
3.6. PROPERTY OF THE COMPANY.
3.6.1.
Real Property. There is listed in Schedule 3.6.1. a
description of each parcel of real property owned by or leased to
the Company. Except as indicated in Schedule ▇.▇.▇.:
3.6.1.1.
Each of the leases described in Schedule 3.6.1. is a
valid and binding obligation of the Company, and Sellers do
not have any knowledge that any of said leases is not a
valid and binding obligation of each of the other parties
thereto;
3.6.1.2.
The Sellers do not have any knowledge that the Company,
the Sellers, or any other party to any such lease is, in
default with respect to any material term or condition
thereof, and Sellers do not have any knowledge that any
event has occurred which through the passage of time or the
giving of notice, or both, would constitute a material
default thereunder or would cause the acceleration of any
obligation of any party thereto or the creation of a lien or
encumbrance upon any asset of the Company;
3.6.1.3.
All of the buildings, fixtures and other improvements
located on the real property described in Schedule 3.6.1.
are in sufficiently good operating condition and repair to
continue the operations of the Company consistent with past
practices, and the Company holds valid and effective
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certificates of occupancy, underwriters' certificates
relating to electrical work, building, safety, fire and
health approvals and all other permits and licenses required
by applicable law relating to the operation of such real
properties and leaseholds, except as set forth on Schedule
3.6.1.3. Neither the Company nor Sellers have received
notice that the Company's operations at the real property
listed in Schedule 3.6.1. as presently conducted is in
violation of any applicable building code, zoning ordinance
or other law or regulation;
3.6.1.4.
Neither the Company nor Sellers, as the case may be,
have experienced during the two years preceding the date
hereof any material interruption in the delivery of adequate
quantities of any utilities (including, without limitation,
electricity, natural gas, potable water, water for cooling
or similar purposes and fuel oil) or other public services
(including, without limitation, sanitary and industrial
sewer service) required by the Company during such period,
except for interruptions caused by standard maintenance,
storms or other acts of God.
3.6.2.
Inventory. There is listed in Schedule 3.6.2. a description
of all inventories of (i) flow control equipment; (ii) raw
material, work in progress, finished goods, containers, tote
bins, and other packaging material, spare parts, maintenance
supplies; and (iii) other similar items of the Company (the
"Inventory"). Except for the Inventory which is carried as second
quality or slow moving material in the Company's Closing
Financial Statement, the Inventory of the Company as shown on the
Closing Financial Statement is good and merchantable and is
saleable in the ordinary course of business, except as disclosed
on Schedule 3.6.2.
3.6.3.
Other Tangible Personal Property. There is listed in
Schedule ▇.▇.▇.: (i) a description and the location of each item
of tangible personal property (other than Inventory) owned by the
Company or in the possession of the Company having on the date
hereof a depreciated book value per unit in excess of Five
Thousand Dollars ($5,000); (ii) an identification of the owner
of, and any agreement relating to the use of, each item of
tangible personal property under leases or other similar
agreements which provide for rental payments at a rate in excess
of Two Hundred Fifty Dollars ($250) per month; and (iii) an
identification of the owner of, and any agreement relating to the
use of, each motor vehicle not owned by the Company, the rights
to which are to be transferred to Buyer pursuant hereto, except
for omitted items identified on Schedule 3.6.3.
3.6.4.
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Intangible Personal Property. There is listed in Schedule
▇.▇.▇.: an identification of all (i) foreign and United States
Federal or state patents, patent applications, invention
disclosures, copyrights, copyright registrations, trademarks,
trademark registrations, service marks, service ▇▇▇▇
registrations, trade names, trade name registrations and
applications for any of the foregoing, owned or used by the
Company; (ii) common law claims to trademarks, service marks and
tradenames; (iii) claims of copyright that exist although no
registrations have been issued with respect thereto; and (iv)
fictitious business name filings with any state or local
governmental authority ("intangible personal property"). Schedule
3.6.4. also sets forth a true and complete list of all licenses
or similar agreements or arrangements to which the Company is a
party (that are necessary for the operations of the Company's
business as presently conducted) either as licensee or licensor
for each such item of intangible personal property. Except as
indicated in Schedule ▇.▇.▇.:
3.6.4.1.
There have not been any regulatory actions or other
judicial or adversary proceedings involving the Company
concerning any of such items of intangible personal
property, nor to the best knowledge of the Sellers is any
such action or proceeding threatened;
3.6.4.2.
The Company has the right and authority to use said
items of intangible personal property in connection with the
conduct of its business in the manner presently conducted
and, subject to the receipt of those consents listed on
Schedule 3.7., to convey such night and authority to Buyer,
and to the best knowledge of the Sellers such use does not
conflict with, infringe upon or violate any patent,
trademark, servicemark, trade name, registration or similar
rights of any other person, firm or corporation;
3.6.4.3.
There are no outstanding, or threatened, disputes or
disagreements with respect to any licenses or similar
agreements or arrangements described in Schedule 3.6.4.; and
3.6.4.4.
Intentionally Left Blank.
3.6.5. SUBSIDIARIES.
Set forth on Schedule 3.6.5. is a list of all entities in
which the Company holds a 5% or greater interest (the
"Subsidiaries") and the percentage ownership
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of the Company in each such entity. There are no options,
warrants, convertible debt or other similar instruments entitling
anyone to acquire any capital stock or other equity interest of
any of the Subsidiaries.
3.7. AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS.
Except as set forth on Schedule 3.7., the execution and delivery
of this Agreement by Sellers and the consummation of the transactions
contemplated hereby will not result in a breach of any of the terms
and provisions of, or constitute a default under, or conflict with:
(i) any Contract as defined in Section 3.11. or any other material
agreement, indenture or other instrument to which Sellers or the
Company is a party or by which any of them is bound, subject to the
receipt of those consents listed on Schedule 3.7. which have been
obtained and provided to Buyer the breach or default of which would
have a Material Adverse Effect, (ii) the Articles of Incorporation
and Bylaws of the Company, (iii) any judgment, decree, order or award
of any court, governmental body or arbitrator, or (iv) any law, rule
or regulation applicable to Sellers or the Company, the breach or
default of which would have a Material Adverse Effect.
3.8. EMPLOYMENT AGREEMENTS; AND EMPLOYEE BENEFITS.
3.8.1.
Except as set forth on Schedule 3.8.1., there are no
employment, consulting, severance pay, continuation pay,
termination pay or indemnification agreements or other similar
agreements of any nature whatsoever (collectively, "Employment
Agreements") between the Company or a Subsidiary, on the one
hand, and any current or former stockholder, officer, director,
employee, consultant, or agent of the Company or a Subsidiary, on
the other hand, that are currently in effect. Except as set forth
on Schedule 3.8.1. there are no Employment Agreements or any
other similar agreements to which the Company or any of its
Subsidiaries is a party under which the transactions contemplated
by this Agreement (i) will require any payment by the Company, a
Subsidiary or Buyer, or any consent or waiver from any
stockholder, officer, director, employee, consultant or agent of
the Company, a Subsidiary or Buyer, or (ii) will result in any
change in the nature of any rights of any stockholder, officer,
director, employee, consultant or agent of the Company or a
Subsidiary under any such Employment Agreement or other similar
agreement.
3.8.2.
Schedule 3.8.2. sets forth Employee Benefit Plans of the
Company and its Subsidiaries. The Company has made true and
correct copies of all governing instruments and related
agreements pertaining to such benefit plans available to Buyer.
3.8.3.
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Neither the Company, any Subsidiary nor any of their ERISA
Affiliates sponsors or has ever sponsored, maintained,
contributed to, or incurred an obligation to contribute to, any
Employee Pension Benefit Plan.
3.8.4.
No individual shall accrue or receive additional benefits,
service or accelerated rights to payments of benefits under any
Employee Benefit Plan, including the right to receive any
parachute payment, as defined in Section 28OG of the Code, or
become entitled to severance, termination allowance or similar
payments as a direct result of the transactions contemplated by
this Agreement.
3.8.5.
No Employee Benefit Plan has participated in, engaged in or
been a party to any non-exempt Prohibited Transaction, and
neither the Company, a Subsidiary nor any of their ERISA
Affiliates has had asserted against it any claim for taxes under
Chapter 43 of Subtitle A of the Code and Sections 5,000 of the
Code, or for penalties under ERISA Section 502(c), (i) or (1),
with respect to any Employee Benefit Plan nor, to the knowledge
of the Shareholders, is there a basis for any such claim. No
officer, director or employee of the Company or a Subsidiary of
the Company has committed a material breach of any responsibility
or obligation imposed upon fiduciaries by Title I of ERISA with
respect to any Employee Benefit Plan.
3.8.6.
Other than routine claims for benefits, there is no claim
pending or to the knowledge of the Company and Shareholders
threatened, involving any Employee Benefit Plan by any Person
against such plan or the Company, any Subsidiary or any ERISA
Affiliate. There is no pending or to the knowledge of the Company
and Shareholders threatened proceeding involving any Employee
Benefit Plan before the IRS, the U.S. Department of Labor or any
other governmental authority.
3.8.7.
There is no violation of any reporting or disclosure
requirement imposed by ERISA or the Code with respect to any
Employee Benefit Plan.
3.8.8.
To the best knowledge of Sellers, each Employee Benefit Plan
has at all times prior hereto been maintained in all material
respects, by its terms and in operation, in accordance with ERISA
and the Code. The Company, each Subsidiary and their ERISA
Affiliates have made full and timely payment of all amounts
required to be contributed under the terms of each Employee
Benefit
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Plan and applicable law or required to be paid as expenses under
such Employee Benefit Plan, and the Company, each such Subsidiary
and their ERISA Affiliates shall continue to do so through the
Closing. Each Employer Benefit Plan intended to be qualified
under Code Section 401 (a) has received a determination letter to
that effect from the Internal Revenue Service and no event has
occurred and no amendment has been made that would adversely
affect such qualified status.
3.8.9.
With respect to any group health plans maintained by the
Company, any Subsidiary or their ERISA Affiliates, whether or not
for the benefit of the Company's or such Subsidiary's employees,
the Company and its ERISA Affiliate have complied in all material
respects with the provisions of Part 6 of Title I of ERISA and
4980B of the Code. Neither the Company nor any Subsidiary is
obligated to provide health care benefits of any kind to its
retired employees pursuant to any Employee Benefit Plan,
including without limitation any group health plan, or pursuant
to any agreement or understanding, except as required by law.
3.8.10.
The Company has made available to the Buyer a copy of (i)
the three (3) most recently filed Federal Form 5500 series and
accountant's opinion, if applicable, for each Employee Benefit
Plan and all applicable Internal Revenue Service determination
letters.
3.8.11.
For purposes of this Section 3.8., the following definitions
shall apply:
3.8.11.1.
"Benefit Arrangement" means any material benefit
arrangement that is not an Employee Benefit Plan, including,
without limitation, (i) each employment or consulting
agreement, (ii) each arrangement providing for insurance
coverage or workers' compensation benefits, (iii) each
incentive bonus or deferred bonus arrangement, (iv) each
arrangement providing termination allowance, severance or
similar benefits, (v) each equity compensation plan, (vi)
each deferred compensation plan and (vii) each compensation
policy and practice maintained by the Company or any ERISA
Affiliate covering the employees, former employees,
directors and former directors of the Company, and the
beneficiaries of any of them.
3.8.11.2.
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"COBRA" means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, as set forth in
Section 4980B of the Code and Part 6 of Title I of ERISA.
3.8.11.3.
"Code" means the Internal Revenue Code of 1986, as
amended.
3.8.11.4.
"Employee Benefit Plan" means any employee benefit
plan, as defined in Section 3(3) of ERISA, that is sponsored
or contributed to by the Company or any ERISA Affiliate
covering employees or former employees of the Company.
3.8.11.5.
"Employee Pension Benefit Plan" means any employee
pension benefit plan, as defined in Section 3(2) of ERISA,
that is subject to Title IV of ERISA.
3.8.11.6.
ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
3.8.11.7.
ERISA Affiliate" of any person means any other person
that, together with such person as of the relevant measuring
date under ERISA, was or is required to be treated as a
single employer under Section 414 of the Code.
3.8.11.8.
"Prohibited Transaction" means a transaction that is
prohibited under Section 4975 of the Code or Section 406 of
ERISA and not exempt under Section 4975 of the Code or
Section 408 of ERISA, respectively.
3.8.12.
Retirement Plan. The Company currently maintains the Control
Products of Louisiana, Inc. Profit Sharing Plan (the "Plan")
which will remain operative and in effect through the Closing.
The Plan will be terminated as of the Effective Date of the sale
of the Company. The Plan will be terminated as of the Effective
Date of the sale and distributed to vested employees of the
Company in accordance with the terms of the
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Plan. The Trustee for the Plan will be responsible for the
termination, allocation and distribution of plan assets and
related notices and other reporting responsibilities to the
Internal Revenue Service, Department of Labor, and other
government agencies. All such termination costs will be paid from
Plan assets, if permitted by law. To the extent expenses are not
permitted to be paid with Plan assets, the Sellers shall bear
these expenses.
3.9. LABOR AND EMPLOYMENT MATTERS.
3.9.1.
Except as set forth on Schedule 3.9.1., no collective
bargaining agreement exists that is binding on the Company or any
Subsidiary and, except as described on Schedule 3.9.1., no
petition has been filed or proceedings instituted by an employee
or group of employees with any labor relations board seeking
recognition of a bargaining representative. Schedule 3.9.1.
describes any organizational effort currently being made or
threatened by or on behalf of any labor union to organize any
employees of the Company or any Subsidiary.
3.9.2.
Except as set forth on Schedule 3.9.2., (i) there is not
now, and to the Shareholders' knowledge, never has been, any
labor strike, dispute, slow down or stoppage pending or, to the
Shareholders' knowledge, threatened, against or directly
affecting the Company or any Subsidiary, (ii) no grievance or
arbitration proceeding arising out of or under any collective
bargaining agreement is pending, and no claims therefore exist;
and (iii) neither the Company, any Subsidiary nor any Shareholder
has received any notice or has any knowledge of any threatened
labor or civil rights dispute, controversy or grievance or any
other unfair labor practice proceeding or breach of contract
claim or action with respect to claims of, or obligations to, any
employee or group of employees of the Company or any Subsidiary.
3.9.3.
The Company has fewer than fifty (50) employees.
3.9.4.
To the best knowledge of the Sellers, the Company and its
Subsidiaries have complied and are currently complying, in
respect of all employees of the Company and its Subsidiaries with
all applicable laws respecting employment and employment
practices and the protection of the health and safety of
employees, from whatever source such law may be derived,
including, without limitation, statutes, ordinances, laws, rules,
regulations, policies, standards, judicial or administrative
precedents, judgments, orders, decrees, awards,
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citations, licenses, official interpretations and guidelines,
except for such instances which are not, in the aggregate,
material.
3.9.5.
All individuals who are performing or have performed
services for the Company, any Subsidiary and are or were
classified by the Company or any Subsidiary as "independent
contractors" qualify for such classification under Section 530 of
the Revenue Act of 1978 or Section 1706 of the Tax Reform Act
of 1986, as applicable, except for such instances which are not,
in the aggregate, material.
3.10. LITIGATION.
3.10.1.
Except for (i) claims listed in Schedule 3.10. and (ii)
claims for the collection of accounts arising out of the sale or
purchase of goods or services in the ordinary course of business
involving less than $10,000 individually or $50,000 in the
aggregate, there are no claims, disputes, actions, proceedings or
investigations of any nature pending or, to the knowledge of
Sellers, threatened against the Company, or any of the officers,
partners, shareholders, affiliates or employees of the Company.
3.10.2.
No claim, action, suit, investigation, or other proceeding
is pending or, to the best knowledge of Sellers, threatened
before any court or governmental agency which presents a risk of
the restraint or prohibition of the transactions contemplated by
this Agreement or the obtaining of indemnification or other
relief in connection therewith.
3.11. CONTRACTS.
3.11.1.
Schedule 3.11. sets forth a true and correct list of each
contract to which the Company is a party, or to which any Seller
is a party and which relates to the business of the Company
("Contracts"), except:
3.11.1.1.
Agreements for the purchase by the Company of goods,
materials or services in the ordinary course of business
involving less than $ 10,000 in consideration in each such
case;
3.11.1.2.
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Agreements for the sale, rental or service by the
Company of goods or services in the ordinary course of
business in which the payment to be received pursuant to
each such agreement is less than $10,000 for each such
non-listed agreement;
3.11.1.3.
Agreements which are terminable at will by the Company
upon no more than 60 days notice without penalty, default or
liability and involving an amount less than $10,000; and
3.11.1.4.
Agreements continuing for a period of six months or
less involving an amount less than $10,000 for each such
nonlisted agreement.
3.11.2.
Except as set forth in Schedule 3.11.
3.11.2.1.
Each Contract is a valid and binding agreement of the
Company and, to the knowledge of Sellers, of the other
parties thereto, subject to the effect of bankruptcy and
creditors' rights generally;
3.11.2.2.
The Company has fulfilled all material obligations
required pursuant to each Contract to have been performed by
it or on its part prior to the date hereof, and Sellers know
of no reason why, assuming Buyer continues to operate the
Company in the same manner as Sellers, the Company will be
able to fulfill, when due, all of its non-monetary
obligations under the Contracts which remain to be performed
after the date hereof,
3.11.2.3.
There has not occurred any material default under any
Contract on the part of the Company or on the part of the
other parties thereto; and there has not occurred any event
which with the giving of notice or the lapse of time, or
both, would constitute any material default under any of the
Contracts; and
3.11.2.4.
Except as provided in the Contracts, the Company is
not, outside the ordinary course of business, under any
liability or obligation with respect to the return of
inventory or products sold, rented or serviced by it which
are in the possession of distributors, wholesalers,
retailers or other customers.
3.12. REGULATORY APPROVALS.
All material consents, approvals, authorizations and other
requirements prescribed by any law, rule or regulation which must be
obtained or satisfied by the Company or Sellers and which are
necessary for the execution and delivery by Sellers of this Agreement
and the documents to be executed and delivered by Sellers in
connection herewith have been obtained and satisfied.
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3.13. COMPLIANCE WITH LAW.
The Company has not, and its business as presently conducted does
not, violate, in any respect any Federal, state, local or foreign
laws, regulations or orders (including, but not limited to, any of the
foregoing relating to employment discrimination, occupational safety,
environmental protection, conservation, or corrupt practices), the
enforcement of which would have a Material Adverse Effect, and the
Company has not received any notice of any such violation. Sellers
have obtained all permits, approvals, and consents of all governmental
bodies or agencies necessary or appropriate so that consummation of
the transactions contemplated by this Agreement will be in compliance
with applicable laws, the noncompliance with which would have a
Material Adverse Effect.
3.14. INDEBTEDNESS FROM EMPLOYEES.
Except as set forth in Schedule 3.14. no employee of the Company
is indebted to the Company, except for advances made to any employees
in the ordinary course of business to meet reimbursable business
expenses anticipated to be incurred by such employee.
3.15. ACCOUNTS RECEIVABLE.
Except as set forth in Schedule 3.15., the accounts, accounts
receivable, notes and notes receivable of the Company existing on the
Closing Date arose out of the sales of inventory or services in the
ordinary course of business and are collectible in full, net of the
reserve set forth in the Closing Financial Statement, which reserves
are reasonable and were calculated consistent with past practices.
3.16. INSURANCE.
Schedule 3.16. sets forth a true and correct list of all
insurance policies either maintained by the Company or maintained by
any other person which relate to the Company in any manner whatsoever
at the date hereof. There are no outstanding requirements or
recommendations by any insurance company that issued any such policy
or by any Board of Fire Underwriters or other similar body exercising
similar functions or by any governmental authority exercising similar
functions which requires or recommends any changes in the conduct of
the business of, or any repairs or other work to be done on or with
respect to any of the properties or assets of, the Company. The
Company has not received any notice or other communication from any
such insurance company within the three (3) years preceding the date
hereof canceling or materially amending or materially increasing the
annual or other premiums payable under any of said insurance policies,
and no such cancellation, amendment or increase of premiums is
threatened, except as set forth on Schedule 3.16.
3.17. POWERS OF ATTORNEY AND SURETYSHIPS.
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The Company has no general or special powers of attorney
outstanding (whether as grantor or grantee thereof) and has no
obligation or liability (whether actual, accrued, accruing, contingent
or otherwise) as guarantor, surety, co-signer, endorser, co-maker,
indemnitor or otherwise in respect of the obligation of any person,
corporation, partnership, joint venture, association, organization or
other entity, except as endorser or maker of checks or letters of
credit, respectively, endorsed or made in the ordinary course of
business.
3.18. NO UNDISCLOSED LIABILITIES.
Except as and to the extent specifically reflected or reserved
against in the Company's April 30, 2000 Financial Statement or
otherwise disclosed herein, the Company has no liabilities or
obligations of any nature, whether absolute, accrued, contingent or
otherwise, and whether due or to become due (including, without
limitation, any liability for taxes and interest, penalties and other
charges payable with respect to any such liability or obligation)
which in the aggregate would constitute a Material Adverse Effect.
3.19. ENVIRONMENTAL MATTERS.
As of the date hereof, (a) the Company has generated, utilized,
stored, delivered for disposal, disposed of, treated, transported, and
otherwise managed all materials, substances, and wastes, whether
toxic, hazardous or otherwise, in compliance with all laws, rules,
regulations, ordinances, guidelines, and the common law, except to the
extent any such failure would not have a Material Adverse Effect; (b)
the real property owned, leased, or operated by either (i) Sellers
relating to the Company, or (ii) the Company is not listed on the
National Priorities List, CERCLIS, RCRIS, or any comparable state
listing which identifies sites for removal, remedial, clean-up or
investigatory actions; (c) no amounts, which require remediation or
reporting under applicable law, of asbestos, PCB's, ureaformaldehyde,
hazardous and solid wastes, hazardous or toxic substances, petroleum
products, pollutants or contaminates, and no above or underground
storage tanks, have become located on the real property owned, leased,
or currently operated by the Company, except to the extent the
existence or remediation of such substances would not result in a
Material Adverse Effect; and (d) the real property owned, leased, or
operated by the Company has not been contaminated, tainted or polluted
in any manner whatsoever (including, without limitation, any
contamination of or injury or damage to soils, groundwater waters,
biota, and wildlife located on, in, under or originating from such
premises) with pollutants, contaminants or other substances or
materials so as to give rise to a removal, remediation, clean-up, or
investigatory obligation or action, and Sellers do not now have
knowledge of any removal, remediation, investigatory or cleanup
obligation or action which the Company has with respect thereto under
any law, rule, regulation, guideline, ordinance, whether domestic or
foreign, Federal, state, or local, or the common law, except to the
extent any failure to comply with any such obligation would not result
in a Material Adverse Effect. Buyer acknowledges receipt of that
certain Phase I Environmental Site Assessment and Limited Compliance
Review dated September 2000 by Camp Dresser & ▇▇▇▇▇, showing no
asbestos, PCBs, ureaformaldehyde,
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hazardous or solid wastes, hazardous or toxic substances, petroleum
products, pollutants or contaminants, or above or underground storage
tanks in need of remediation and that no real property operated or
leased by the Company has had water or soil contamination or pollution
which would require removal, remediation or clean up.
3.20. CONFLICT OF INTEREST.
Except as disclosed in Schedule 3.20., no officer, director or
shareholders of the Company or any of their ascendants, descendants,
or spouses, or any entity in which any of said persons has an
ownership or equity interest, or any entity in which any of said
persons has a management or director position, excluding any publicly
traded company in which any of said persons has an ownership interest
of less than 5% (herein called "affiliate") now has or within the last
three (3) years had, either directly or indirectly:
3.20.1.
any equity or debt interest in any corporation, partnership,
joint venture, association, organization or other person or
entity which furnishes or sells or during such period furnished
or sold services or products to the Company, or purchases or
during such period purchased from the Company any goods or
services, or otherwise does or during such period did business
with the Company; or
3.20.2.
a beneficial interest in any contract, commitment or
agreement, formal or informal, to which the Company is or was a
party or under which it was obligated or bound or to which its
properties may be or may have been subject, other than stock
options and other contracts, commitments or agreements between
the Company and such persons in their capacities as employees,
officers or directors of the Company; or
3.20.3.
loaned money to or borrowed money from the Company.
3.21. TAXES.
3.21.1.
For purposes of this Agreement: (i) the term "Taxes" means
(A) all Federal, state, local, foreign and other net income,
gross income, gross receipts, sales, use, ad valorem, value
added, intangible, unitary, capital gain, transfer, franchise,
profits, license, lease, service, service use, withholding,
backup withholding, payroll, employment, estimated, excise,
severance, stamp,
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occupation, premium, property, prohibited transactions, windfall
or excess profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional
amounts with respect thereto, (B) any liability for payment of
amounts described in clause (A) whether as a result of transferee
liability, of being a member of an affiliated, consolidated,
combined, unitary or other similar group for any period, or
otherwise through operation of law and (C) any liability for the
payment of amounts described in clauses (A) or (B) as a result of
any tax sharing, tax indemnity or tax allocation agreement or any
other express or implied agreement to indemnify any other Person;
and the term "Tax" means any one of the foregoing Taxes; and (ii)
the term "Returns" means all returns, declarations, reports,
statements and other documents required to be filed in respect of
Taxes; and the term "Return" means any one of the foregoing
Returns.
3.21.2.
Schedule 3.21.2. sets forth: (1) the taxable years of the
Company and Tax Affiliates (as defined in Section 3.21.3.) as to
which the respective statutes of limitations on the assessment of
United States Federal income and any applicable state, local or
foreign income or franchise Taxes have not expired, and (ii) with
respect to such taxable years sets forth those years for which
examinations by the IRS or the state, local or foreign taxing
authority have been completed, those years for which examinations
by such agencies are presently being conducted, those years for
which notice of pending or threatened examination or adjustment
has been received, those years for which examinations by such
agencies have not been initiated, and those years for which
required Returns for such Taxes have not yet been filed. Except
to the extent indicated in Schedule 3.21.2., all deficiencies
asserted or assessments made as a result of any examinations by
the IRS or state, local or foreign Tax authority have been fully
paid, or are fully reflected as a liability in the Company's
April 30, 2000 Financial Statement, or are fully described in
Schedule 3.21.2., are being contested in good faith and an
adequate reserve therefore has been established and is fully
reflected in the Company's April 30, 2000 Financial Statement to
the extent required by generally accepted accounting principles
consistently applied ("GAAP"). Except as described in Schedule
3.21.2., there are no Returns that are presently under
examination with respect to Taxes, there are no proposed (whether
oral or written) or final adjustments, assessments or
deficiencies with respect to Taxes currently pending, and there
are no outstanding notices of proposed or actual audit,
examination or investigation with respect to Taxes.
3.21.3.
SELLERS represent and warrant to Buyer that, except as
described in Schedule ▇.▇▇.▇.:
3.21.3.1.
EX-205
the Company, and every other person for whose Taxes the
Company is or could be held liable (whether by reason of
being a member of a consolidated, combined, unitary, or
other similar group for Tax purposes, by reason of being a
successor, by agreement or otherwise (for the taxable
period(s) or portions thereof with respect to which the
Company is or could be held for such other Person's Taxes)
(all such persons collectively referred to herein as "Tax
Affiliates"), have filed on a timely basis all Returns
required to have been filed by it and have paid on a timely
basis all Taxes shown thereon as due. All such Returns are
true, complete and correct in all material respects. The
provisions for taxes in the Company's April 30, 2000
Financial Statement sets forth the maximum liability of the
Company and Tax Affiliates for Taxes as of the date thereof
No liability for Taxes has been incurred by the Company or
any Tax Affiliate since April 30, 2000 other than in the
ordinary course of their business. No director, officer or
employee of the Company or any Tax Affiliate having
responsibility for Tax matters is in discussions with Tax
authorities or has reason to believe that any Tax authority
has valid grounds to claim or assess any additional Tax with
respect to the Company or any Tax Affiliate in excess of the
amounts shown on the Company's April 30, 2000 Financial
Statement for the period ending on such date;
3.21.3.2.
with respect to all amounts in respect of Taxes imposed
upon the Company or Tax Affiliates, or for which the Company
is or could be liable, whether to taxing authorities (as,
for example, under law) or to other persons or entities (as,
for example, under tax allocation agreements), and with
respect to all taxable periods or portions of periods ending
on or before the Closing, all applicable Tax laws and
agreements have been fully complied with in all material
respects, and all such amounts required to be paid by the
Company and Tax Affiliates to Tax authorities or others have
been paid;
3.21.3.3.
none of the Returns required to be filed by the Company
or any Tax Affiliate contains, or were required to contain
(in order to avoid the imposition of a penalty), a
disclosure statement under Section 6662 (or any predecessor
provision) of the Code, or any similar provision of state,
local or foreign law;
3.21.3.4.
all amounts that were required to be collected or
withheld by the Company or any Tax Affiliate have been duly
collected or withheld in all material respects, and all such
amounts that were required to be remitted to any Tax
authority have been duly remitted in all material respects;
3.21.3.5.
the Company and Tax Affiliates have not requested an
extension of time to file any Return not yet filed, and have
not granted any waiver of any statute of limitations with
respect to, or any extension of a period for
EX-206
the assessment of, any Tax. No power of attorney granted by
the Company or any Tax Affiliate with respect to Taxes is in
force;
3.21.3.6.
Sellers, the Company and Tax Affiliates have not taken
any action not in accordance with past practice that would
have the effect of deferring any material Tax liability of
the Company or any Tax Affiliate from any taxable period or
portion thereof ending on or before or including the Closing
to any subsequent taxable period;
3.21.3.7.
Schedule 3.21.3.7. sets forth all Tax Affiliates during
all periods with respect to which the applicable statue of
limitations on the assessment of Taxes remains open;
3.21.3.8.
there are no actual or deemed elections under Section
338 of the Code, protective carryover basis elections,
offset prohibition elections or similar elections applicable
to the Company or any Tax Affiliate;
3.21.3.9.
except for the Section 263A adjustment made by the
Company each year with its annual 1120S tax return, neither
the Company nor any Tax Affiliate is required to include in
income any adjustment pursuant to Sections 481 or 263A of
the Code (or similar provisions of other law or regulations)
by reason of a change in accounting method or otherwise,
following the Closing, and Sellers have no knowledge that
the IRS (or other Tax authority) has proposed, or is
considering, any such change in accounting method or other
adjustment;
3.21.3.10.
there are no liens for Taxes (other than for current
Taxes not yet due and payable) upon the assets of the
Company;
3.21.3.11.
the Company is not party to any agreement, contract,
arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of Section
28OG of the Code, whether by reason of the Closing or
otherwise;
3.21.3.12.
EX-207
the Company is not, and has not been, a United States
real property holding corporation (as defined in Section
897(c)(2) of the Code) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code (or any
corresponding provision of state, local or foreign Tax law);
3.21.3.13.
neither the Company nor any Tax Affiliate has or has had a
permanent establishment in any foreign country, as defined
in any applicable Tax treaty or convention between the
United States of America and such foreign country and the
Company has not engaged in a trade or business within any
foreign country;
3.21.3.14.
neither the Company nor any Tax Affiliate is a party to any
joint venture, partnership, or other arrangement or contract
which could be treated as a partnership for Federal income
tax purposes;
3.21.3.15.
there are no intercompany gains, intercompany items, excess
loss accounts or other similar items that will be recognized
as a result of the acquisition of the shares of the Company
pursuant to this Agreement, and no election has been made
with respect to the Company under Treasury Regulation ss.
1.1502-20 or to discontinue filing consolidated returns with
any Tax Affiliate;
3.21.3.16.
neither the Company nor any Tax Affiliate has filed a
consent pursuant to the collapsible corporation provisions
of Section 341(f) of the Code (or any corresponding
provision of state, local or foreign income Tax law) or
agreed to have Section 341(f)(2) of the Code (or any
corresponding provision of state, local or foreign income
Tax law) apply to any disposition of any asset owned by any
of them;
3.21.3.17.
neither the Company nor any Tax Affiliate has participated
in an international boycott within the meaning of Section
999 of the Code;
3.21.3.18.
the Company is not a party to or bound by any Tax sharing
agreement, and has no current or contingent contractual
obligation to indemnify any other person with respect to
Taxes, other than obligations to indemnify a lessor for
property Taxes, sales/use Taxes or gross receipts Taxes (but
not income or franchise Taxes) imposed on lease payments
arising from terms that are customary for leases of similar
property;
3.21.3.19.
the Company is not a party to or bound by any closing
agreement or offer in compromise with any Tax authority;
3.21.3.20.
EX-208
none of the assets of the Company is property that the
Company is required to treat as being owned by any other
person pursuant to the socalled "safe harbor lease"
provisions of former Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended; none of the assets of the
Company directly or indirectly secures any debt the interest
on which is tax exempt under Section 103(a) of the Code;
none of the assets of the Company is "tax-exempt use
property" within the meaning of Section 168(h) of the Code;
3.21.3.21.
Schedule 3.21.3.21. sets forth all material elections
with respect to Taxes of the Company and Tax Affiliates made
since December 1, 1989;
3.21.3.22.
Schedule 3.21.3.22. sets forth all Returns with respect
to the Company and Tax Affiliates the due dates for which
(including any valid extensions thereof) are sixty or fewer
days following the Closing, and the Taxes for which
estimated or final payments may, based on the current
operations of the Company and Tax Affiliates, become due in
sixty or fewer days following the Closing;
3.21.3.23.
Schedule 3.21.3.23. sets forth all state, local or
foreign jurisdictions in which the Company is or at any time
during the past five years has been subject to Tax.
3.21.3.24.
the Company has had in effect at all times since April
1, 1994 through the date immediately preceding the date of
the Closing a valid election under Section 1361 of the Code
(and any predecessor provision and any similar provision of
applicable state, local or other Tax law). The Company has
not incurred any liability for Taxes pursuant to Section
1374 or 1375 of the Code (and any predecessor provision and
any similar provision applicable state, local or other Tax
law).
3.21.3.25.
all outstanding options to acquire equity of the
Company that purport to or were otherwise intended (when
issued) to be treated as "incentive stock options" ("ISOs")
within the meaning of Section 422 of the Code (and any
predecessor provision and any similar provision applicable
state, local or other Tax law) were issued in compliance
with such section. All such outstanding options currently
qualify for treatment as ISOs, and are held by persons who
are employees of the Company.
3.22. LIENS.
Except as disclosed on Schedule 3.22., none of the properties and
assets owned, leased, and/or used by the Company or its Subsidiaries
is subject to any lien, charge, mortgage, pledge, security interest,
or other encumbrance of any kind. Schedule 3.22 also sets forth a
description of any indebtedness owed by the Company which is
guaranteed in writing by any of the Sellers and/or secured by
collateral granted by any of the Sellers.
EX-209
3.23. OTHER INFORMATION.
The information provided by Sellers to Buyer in this Agreement or
in the Schedules does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated herein or
therein or necessary to make the statements and facts contained herein
or therein, in light of the circumstances in which they are made, not
false or misleading. There is no fact known to any of the Sellers that
has any specific application to the Company (other than general
economic or industry conditions) that could have a Material Adverse
Effect on the assets, business, prospects, financial condition, or
results of operations of the Company that has not been set forth in
this Agreement or in the attached Schedules. Copies of all due
diligence documents and materials heretofore delivered or made
available to Buyer were complete and accurate in all material
respects. The parties acknowledge that said due diligence documents
and materials are as contained in three binders certified to be
complete and correct in all material respects as of the Closing. To
the extent there is a conflict between the information contained in
the due diligence documents and materials and in this Agreement and
the Schedules, then this Agreement and the Schedules shall control
such conflict.
3.24. NO OTHER REPRESENTATIONS.
Sellers are not making any representation or warranty, express or
implied, of any nature whatsoever, except as specifically set forth in
this Agreement and the other documents executed in connection
herewith.
3.25. NO KNOWN BREACHES.
Sellers have no actual knowledge that Buyer's representations and
warranties in this Agreement are untrue and Sellers shall not be
entitled to make any indemnity claims pursuant to Section 6. hereof
with respect to any matters constituting a breach of this Section
3.24.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Sellers that:
4.1. ORGANIZATION.
Buyer is duly organized, validly existing amid in good standing
under the laws of the State of Delaware and has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
4.2. CORPORATE AUTHORITY.
This Agreement and all other agreements herein, contemplated to
be executed in connection herewith have been duly executed and
delivered by Buyer, have been
EX-210
effectively authorized by all necessary action, corporate or
otherwise, and constitute legal, valid and binding obligations of
Buyer,
4.3. AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS.
The execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby and the fulfillment of the terms
hereof will not result in a breach of any of the terms or provisions
of, or constitute a default under, or conflict with, any material
agreement, indenture or other instrument to which Buyer is a party or
by which it is bound, Buyer's Certificate of Incorporation or Bylaws,
any judgment, decree, order or award of any court, governmental body
or arbitrator, or any law, rule or regulation applicable to Buyer.
4.4. INVESTMENT INTENT.
Buyer is acquiring the Shares with the intention as of the date
hereof of holding the Shares for purposes of investment, and Buyer has
no intention as of the date hereof of selling the Shares in a public
distribution in violation of Federal securities laws or any applicable
state securities laws.
4.5. REGULATORY AND OTHER APPROVALS.
All consents, approvals, authorizations and other requirements
prescribed by any law, rule or regulation, including any third party
consents, which must be obtained or satisfied by Buyer and which are
necessary for the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have
been obtained and satisfied.
4.6. NO KNOWN BREACHES.
Buyer has no actual knowledge that Sellers' representations and
warranties in this Agreement are untrue, and Buyer shall not be able
to make any indemnity claims pursuant to Section 6. hereof with
respect to any matters constituting a breach of this Section 4.6.
4.7. OTHER INFORMATION.
The information provided by Buyer to Sellers in this Agreement or
in the Schedules does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated herein or
therein or necessary to make the statements and facts contained herein
or therein, in light of the circumstances in which they are made, not
false or misleading.
4.8. FINANCIAL CAPABILITY.
Buyer is financially capable of closing the business transaction
contemplated by this Agreement on the terms set forth in this
Agreement as well as the ancillary documents relating thereto,
including all Employment Contracts, and has further
EX-211
obtained sufficient means of financing to provide for the working
capital needs of the Company following the Closing, to operate the
Company at a level of business activity of a magnitude equal to or
greater than it has historically been operated.
4.9. BUSINESS KNOWLEDGE.
Buyer is knowledgeable in the business of manufacture and repair
of flow control equipment used in the oil and gas business and is
familiar with the business opportunities and risks associated
therewith.
4.10. NO OTHER REPRESENTATIONS.
Buyer is not making any representation or warranty, express or
implied, of any nature whatsoever, except as specifically set forth in
this Agreement and the other documents executed in connection
herewith.
5. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES.
5.1. COOPERATION IN LITIGATION.
Each party will fully cooperate with the other in the defense or
prosecution of any litigation or proceeding already instituted or
which may be instituted hereafter against or by such party relating to
or arising out of the conduct of the Company prior to or after the
Closing Date (other than litigation arising out of the transactions
contemplated by this Agreement). The party requesting such cooperation
shall pay the out-of-pocket expenses (including legal fees and
disbursements) of the party providing such cooperation and of its
officers, directors, employees and agents reasonably incurred in
connection with providing such cooperation, but shall not be
responsible to reimburse the party providing such cooperation for such
party's time spent in such cooperation or the salaries or costs of
fringe benefits or other similar expenses paid by the party providing
such cooperation to its officers, directors, employees and agents
while assisting in the defense or prosecution of any such litigation
or proceeding. Notwithstanding the foregoing, the parties agree that
the provisions of this Section 5.1. shall apply to the Sellers as
follows: for each Seller that is an employee of the Company after
Closing, the provisions of Section 5.1. shall apply to such Seller
while he is an employee of the Company and for one year following the
termination of such employment; and for each Seller that is not an
employee of the Company after Closing, the provisions of Section 5.1.
shall apply to such Seller for one year after Closing.
5.2. TAX MATTERS.
5.2.1. PRE-CLOSING RETURNS.
Sellers will be responsible for and will cause to be
prepared and duly filed all Returns in which the Company is
includable for all taxable periods ending on or before the
Closing. All such Returns shall be prepared in a manner
consistent with prior periods. All such Returns filed after the
Closing shall be submitted to
EX-212
Buyer no later than thirty (30) days (including any applicable
extensions) for federal and state Taxes and as soon as available
but not less than ten (10) days (including applicable extensions)
for all other Taxes prior to the due date and filing thereof, and
Buyer shall have the right to review and comment thereon (without
reduction of Sellers' obligations to indemnify under this
Agreement). Sellers will pay or cause to be paid, and shall
indemnify and hold Buyer and the Company (subject to the
limitations set forth in Section 6.8.(b) and (c) of this
Agreement) harmless against, all Taxes to which such Returns
relate; provided, however, that to the extent such Taxes are
included on the Closing Financial Statement (as finally
determined) or an attachment or schedule thereto, Company shall
pay such taxes and, to the extent said Taxes were included as a
liability on the Closing Financial Statement, no reimbursement
shall be due from Sellers; provided, however, Sellers agree and
understand that all Taxes due and payable by the Company related
to pre-Closing periods must be paid by Sellers or such Taxes will
be treated as a reduction to the Purchase Price via a reduction
to Net Working Capital.
5.2.2. OVERLAP PERIOD RETURNS
Other than Returns to be prepared by Sellers pursuant to
Section 5.2.1., Buyer will prepare or cause to be prepared all
Returns of the Company for any and all taxable periods which
include and end after the Closing (the "Overlap Period"), and any
taxable period beginning after the Closing. Sellers will be
responsible for and will indemnify and hold harmless Buyer, and
the Company with respect to all Taxes for the Overlap Period in
an amount equal to the liability for Taxes that would have
resulted had the Overlap Period ended at the Closing (subject to
the limitations set forth in Section 6.8. (b) and (c) of this
Agreement) (utilizing, if applicable, the actual tax rate imposed
on a particular category of income by the applicable taxing
jurisdiction), except to the extent such Taxes are included on
the Closing Financial Statement (as finally determined) or an
attachment or schedule thereto. Any amount so payable by Sellers
will be remitted to Buyer at least ten business days prior to the
due date of the respective Returns pursuant to written notice by
the Buyer of such due date; provided that Sellers approve of the
amount (such approval not to be unreasonably withheld).
5.2.3. AMENDED RETURNS.
From and after the date hereof, Sellers and their affiliates
shall not file or cause to be filed any amended Return with
respect to the Company, and Sellers and their affiliates shall
not file a claim for refund of Taxes paid by or on behalf of the
Company, without the prior written approval of Buyer. Buyer
agrees not to withhold such consent so long as the claim will not
subject Buyer or Company to any tax liability or adversely affect
any future tax liability of Buyer or Company.
5.2.4. MATERIAL ELECTIONS.
EX-213
Neither Sellers nor the Company shall make any material
election with respect to Taxes of the Company or any Tax
Affiliate following the date hereof without the prior written
approval of Buyer (such approval not to be unreasonably
withheld). Furthermore, Buyer shall not make an election which
will cause an increase in Taxes to Sellers (or allocated to
Sellers under this Agreement).
5.2.5. TAX INFORMATION.
After the Closing, Sellers, on the one hand, and Buyer and
the Company, on the other hand, will make available to the other,
as reasonably requested, all information, records or documents
relating to liabilities for Taxes for all periods prior to or
including the Closing and will preserve such information, records
or documents until the expiration of any applicable statute of
limitations or extensions thereof
5.2.6. TAX SHARING AGREEMENTS.
Any and all tax sharing, tax indemnity, or tax allocation
agreements with respect to which the Company was a party at any
time prior to the Closing shall terminate upon the Closing. No
further amounts shall be payable by the Company under such
agreements following the Closing.
5.3. EMPLOYMENT AND CONFIDENTIALITY AGREEMENTS.
5.3.1.
At the Closing, Buyer shall enter into the following
agreements: (i) two-year employment agreement with ▇▇▇▇▇▇
▇▇▇▇▇▇▇; (ii) two-year employment agreement with ▇▇▇▇▇ ▇. ▇▇▇▇▇;
(iii) two-year employment agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; (iv)
one-year employment agreement with ▇▇▇▇▇ Cyrus; and (v) two-year
employment agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Each of the foregoing
employment agreements and consulting agreement shall contain
confidentiality and two-year non-compete provisions upon
termination of employment or consultancy, and such other terms
and provisions as are mutually acceptable to the parties, but
substantially in the forms attached hereto as Exhibit 5.3.1. In
addition, Messrs. Puckett, Urias, ▇▇▇▇▇▇ and Cyrus are eligible
for participation in Buyer's Stock Option Plan and Buyer's Bonus
Compensation Plan, all as approved by Buyer's Board of Directors;
provided, however participation in the Buyer's Stock Option Plan
is subject to individual performance and subject to the
discretion of Buyer's Board of Directors.
5.3.2.
Intentionally Left Blank
5.4. LEASE.
EX-214
At the Closing, the Buyer will cause the Company, as lessee, to
enter into (i) a written lease agreement with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. Cyrus, as
lessors, affecting the immovable property and improvements located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in Lafayette, Louisiana, and (ii) a written
lease agreement with Top Six Enterprises, L.L.C., as lessor, affecting
the immovable property and improvements located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ in Lafayette, Louisiana (collectively, the "Lease"). Each
Lease will be for a term of one year with a one year renewable option,
and contain such other terms and provisions mutually agreed to by the
parties.
5.5. BUYER'S INSURANCE
Buyer agrees to continue all insurance liability coverage at a
level of at least as high as the Company's 2000 insurance coverage
including, but not limited to, basic comprehensive general and
liability ("CGL"), umbrella CGL, products liability, workers'
compensation and, fire and casualty.
5.6. RELEASE OF SELLERS' GUARANTEES
Schedule 3.22. sets forth the names and addresses of the vendors
and creditors of the Company for which the Sellers (or any of them)
have personally guaranteed indebtedness owed by the Company, and a
brief description of said indebtedness. Sellers and Buyer agree to
jointly notify said vendors and creditors of the withdrawal or
termination of the Sellers' personal guarantees for any purchases made
by the Company after the Closing Date. In addition, Buyer agrees to
request a cancellation of the guarantees listed in Schedule 3.22.
Further, Buyer agrees to indemnify and hold Sellers harmless from all
losses or expenses relating to Sellers' personal guarantees of Company
indebtedness which was disclosed on the Closing Financial Statement,
as well as any post Closing Date future indebtedness of the Company to
any creditor, the payment of which is guaranteed by one or more of the
Sellers, whether or not such creditor's name appears on Schedule 3.22.
6. INDEMNIFICATION.
6.1. INDEMNIFICATION BY SELLERS.
Subject to the provisions and limitations of Section 6., Sellers
shall indemnify and hold harmless Buyer, the Company, and their
respective officers (including without limitation ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇),
employees, agents, attorneys (including without limitation Liskow &
▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ and their partners, associates and
other employees) and shareholders (collectively, the "Buyer Group") in
respect of any and all claims, losses, damages, liabilities and
expenses (including, without limitation, settlement costs and any
reasonable legal, accounting and other expenses for investigating or
defending any
EX-215
actions or threatened actions) incurred (collectively, "Losses") by
the Buyer Group, together with interest on cash disbursements in
connection therewith at the base rate for prime commercial lenders of
Buyer's primary bank as announced from time to time, plus one percent
per annum (the "Reference Rate") from 60 days after the date such
Losses were incurred by the Buyer Group until paid by Sellers, in
connection with each and all of the following:
6.1.1.
any breach of any representation or warranty made by Sellers
in this Agreement;
6.1.2.
the breach of any covenant, agreement or obligation of
Sellers contained in this Agreement or any other instrument
delivered at the Closing;
6.1.3.
any misrepresentation contained in any Schedule, certificate
or other documents furnished by Sellers pursuant to this
Agreement;
6.1.4.
the failure to pay when due any and all liabilities for
Taxes (as defined in Section 3.21.1.) that are allocated to
Sellers pursuant to Section 5.2., including, without limitation,
all interim Taxes (for returns not filed) and under-accruals.
6.1.5
Intentionally left blank;
6.1.6
Intentionally left blank;
6.1.7
THE VIOLATION OF ANY FEDERAL, STATE, LOCAL OR FOREIGN LAWS,
REGULATIONS, ORDERS, REQUIREMENTS OR ORDINANCES APPLICABLE TO THE
COMPANY AND ITS BUSINESS, PRIOR TO THE CLOSING DATE BY SELLERS,
THE COMPANY OR ANY OF THEIR AFFILIATES, AGENTS OR ASSIGNS BUT
ONLY TO THE EXTENT THAT ANY SUCH CLAIM IS NOT SETTLED OR
OTHERWISE SATISFIED IN FULL PRIOR TO THE CLOSING OR ONLY AS IT
RESULTS IN A LOSS NOT REFLECTED ON THE CLOSING FINANCIAL
STATEMENT; AND
6.1.8
(a) the violation of any environmental law, regulation,
order, requirement, or ordinance applicable to the Company and
its business, prior to the Closing
EX-216
Date by Sellers, the Company, or any of their affiliates, agents,
or assigns, (b) conditions existing at, or caused by events prior
to the Closing Date which are violations of any Federal, state or
local environmental statute, regulation, requirement or ordinance
prior to the Closing Date with respect to the Company or any of
its assets, and (c) any other environmental conditions in
existence as of the Closing Date on the real property owned,
leased or used by the Company, whether or not described in
Schedule 3.6.1. ((a), (b), and (c) being collectively referred to
herein as "Environmental Conditions"), which as of the Closing,
or will in the future as a result of the operation of the Company
prior to Closing, require remediation, removal, or other
corrective actions, including without limitation the
Environmental Conditions listed in Schedule 6.1.8.). With respect
to each and every Environmental Condition, Sellers' obligation to
indemnify the Buyer Group from any Losses shall include but not
be limited to: (i) fines, penalties, assessments and judgments
(whether related to current or past activities); (ii) costs
associated with obtaining any necessary permits, certificates or
other governmental approval or complying with environmental
reporting or record keeping requirements, including (A)
remediation costs, (B) removal costs, (C) costs of implementing
monitoring equipment which are necessary to obtain such permits,
certificates or approvals, and (D) late fees and filing fees; and
(iii) any costs which Buyer deems reasonably necessary in
connection with the foregoing, including without limitation costs
of environmental audits, surveys, reports, waste
characterizations, monitoring ▇▇▇▇▇, soil borings, tests and
samples, provided that such costs incurred by Buyer pursuant to
this Section 6.1.8. (iii) must be approved by Sellers in advance,
which consent will be timely given and not unreasonably withheld
(collectively, "Environmental Costs"). Buyer acknowledges receipt
of the that certain Phase I Environmental Site Assessment and
Limited Compliance Review dated September 2000 by Camp Dresser &
▇▇▇▇▇, a copy of which is included in Schedule 6.18.
6.2. INDEMNIFICATION BY BUYER.
Subject to the provisions and limitations of Section 6., Buyer
shall indemnify and hold harmless Sellers and their respective
officers, employees, agents, and shareholders, if any (collectively,
the "Seller Group"), in respect of any and all Losses (as defined
above) reasonably incurred by Sellers, together with interest on cash
disbursements in connection therewith at the Reference Rate from 60
days after the date that such Losses were incurred by the Seller Group
until paid by Buyer, in connection with each and all of the following:
6.2.1.
any breach of any representation or warranty made by Buyer
in this Agreement.
6.2.2.
the breach of any covenant, agreement or obligation of Buyer
contained in this Agreement or any other instrument delivered at
the Closing;
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6.2.3.
any misrepresentation contained in any Schedule, certificate
or any other document furnished by Buyer pursuant to this
Agreement;
6.2.4
the operation of the Company after the Closing Date;
6.2.5.
any claim, demand or cause of action (including warranty
claims and claims relating to physical injury, death or property
damage) relating to or proximately caused by either (i) products
manufactured by the Company after the Closing Date or (ii) any
products sold or leased by the Company after the Closing Date;
6.2.6.
the violation of any Federal, state, local or foreign laws,
regulations, orders, requirements or ordinances on or after the
Closing Date by Buyer and its affiliates, agents or assigns in
relation to the Company, except with regard to existing practices
of the Company; and
6.2.7.
(a) the post-Closing Date violation of any environmental
law, regulation, order, requirement, or ordinance applicable to
the Company and its business, after the Closing Date by the
Company, or any of its affiliates, agents, or assigns, (b)
conditions caused by events after the Closing Date which are
violations of any Federal, state or local environmental statutes,
regulation, requirement or ordinance after the Closing Date with
respect to the Company or any of its assets (exclusive of
conditions existing as of the Closing Date that are covered by
Section 6.1.8. above), and (c) any other environmental conditions
in existence after the Closing Date on the real property owned,
leased or used by the Company (exclusive of conditions existing
as of the Closing Date that are covered by Section 6.1.8. above),
((a), (b), and (c) being collectively referred to herein as
"Environmental Conditions"), which will in the future as a result
of the operation of the Company after the Closing, require
remediation, removal, or other corrective actions. With respect
to each and every Environmental Condition, Buyer's obligation to
indemnify the Seller Group from any Losses shall include but not
be limited to: (i) fines, penalties, assessments and judgments
(whether related to current or past activities); and (ii) costs
associated with obtaining any necessary permits, certificates or
other governmental approval or complying with environmental
reporting or record keeping requirements, including (A)
remediation costs, (B) removal costs, (C) costs of implementing
monitoring equipment which are necessary to obtain such permits,
certificates or approvals, and (D) late fees and filing fees, and
(iii) any costs which Sellers deem reasonably necessary in
connection with the foregoing including, without limitation,
costs of environmental audits, survey, reports, waste
characterizations, monitoring ▇▇▇▇▇, soil borings, tests, and
samples, provided that such costs incurred by Sellers pursuant to
this Section 6.2.7. (iii) must be approved by Buyer in advance,
which
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consent will be timely given and not unreasonably withheld
(collectively, "Environmental Costs").
6.3. CLAIMS FOR INDEMNIFICATION.
Whenever any claim shall arise for indemnification hereunder, the
party entitled to indemnification (the "indemnified party") shall
promptly notify the other party (the "indemnifying party") of the
claim and, when known, the facts constituting the basis for such
claim. In the event of any claim for indemnification hereunder
resulting from or in connection with any claim or legal proceedings by
a third party, the notice to the indemnifying party shall specify, if
known, the amount or an estimate of the amount of the liability
potentially arising therefrom. The indemnified party shall not settle
or compromise any claim by a third party for which it is entitled to
indemnification hereunder, without the prior written consent of the
indemnifying party; provided, however, that if such consent is not
granted the amount of indemnity provided by the Indemnitor shall not
be limited by Section 6.6. (a) and, at the election of Buyer, only the
portion of any loss equal to the refused settlement shall be deducted
or payable from the Escrow Account, all other amounts shall be paid
directly to Buyer by wire transfer by Sellers or the distributees of
the assets of the Sellers.
6.4. DEFENSE BY INDEMNIFYING PARTY.
In connection with any claim giving rise to indemnity hereunder
resulting from or arising out of any claim or legal proceeding by a
person who is not a party to this Agreement, the indemnifying party at
its sole cost and expense may, upon written notice to the indemnified
party given within 30 days after delivery of the written notice
referred to in Section 6.3. hereof, cure or mitigate any Losses and/or
assume the defense of any such claim or legal proceeding if it
acknowledges to the indemnified party in writing its obligations to
indemnify the indemnified party with respect to all elements of such
claim. The indemnified party shall be entitled to participate in (but
not control) the defense of any such action, with its own counsel and
at its own expense. If the indemnifying party does not assume the
defense of any such claim or litigation resulting therefrom, (a) the
indemnified party may defend against such claim or litigation, in such
manner as it may deem appropriate, including, but not limited to,
settling such claim or litigation, after giving notice of the same to
the indemnifying party, on such terms as the indemnified party may
deem appropriate, and (b) the indemnifying party shall be entitled to
participate in (but not control) the defense of such action, with its
counsel and at its own expense. If the indemnifying party thereafter
seeks to question the manner in which the indemnified party defended
such third party claim or the amount or nature of any such settlement,
the indemnifying party shall have the burden to prove by a
preponderance of the evidence that the indemnified party did not
defend or settle such third party claim in a reasonably prudent manner
as a prudent businessman would if his own funds were subject to such
suit.
6.5. MANNER OF INDEMNIFICATION.
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All indemnification by either party hereunder shall be effected
by payment of cash or delivery of a certified or official bank amount
of the indemnification liability, or in the case of Losses by Buyer,
from the Escrow Amount (if there are sufficient funds therein).
6.6. LIMITATIONS ON INDEMNIFICATION.
Subject to any limitations contained therein, all representations
and warranties made by the parties herein or in any instrument or
document furnished in connection herewith shall survive the Closing
and any investigation at any time made by or on behalf of the parties
hereto and shall expire twenty-four months after the Closing Date,
except (i) as to any matter as to which a claim is submitted in
writing to the indemnifying party prior to the applicable expiration
date and identified as a claim for indemnification pursuant to this
Agreement; (ii) as to any representation or warranty relating to
ownership or title to the Shares or the Company's assets, including
real property, which shall not expire; (iii) as to any matter which is
based upon willful fraud by the indemnifying party under a final
nonappealable judgment with respect to which the representations and
warranties set forth in this Agreement shall expire only upon
expiration of the applicable statute of limitations plus one year,
however, in no event longer than a total of ten (10) years from the
Closing Date; (iv) as to any representation or warranty concerning tax
or environmental matters, which shall expire only upon the expiration
of the applicable statute of limitations plus one year; and (v) as to
any representation or warranty concerning the authority to execute
this Agreement or any of the other documents contemplated hereby,
which shall not expire. No claim or action for indemnity pursuant to
Sections 6.1. or 6.2. hereof for breach of any representation or
warranty shall be asserted or maintained by any party hereto after the
expiration of such representation or warranty pursuant to the
preceding sentence except for claims made in writing prior to such
expiration and actions (whether instituted before or after such
expiration) based on any claim made in writing prior to such
expiration. Notwithstanding any other provisions contained in this
Agreement, (a) neither Buyer nor Sellers shall be entitled to receive
any amount under this Section 6. which exceeds the Purchase Price, and
the parties understand that Buyer's payment of the Purchase Price does
not reduce Buyer's liability for payments under this Section 6.; (b)
Buyer shall not be entitled to payment under this Section 6. except
for the amount by which the aggregate of all claims hereunder which
have not theretofore been reimbursed to Buyer exceeds the sum of
$63,000.00; and (c) Sellers shall not be entitled to payment under
this Section 6. except for the amount by which the aggregate of all
claims hereunder which have not theretofore been reimbursed to
Sellers, exceeds $63,000.00. In the event the $63,000.00 threshold
mentioned in clause (a) or (b) of the preceding sentence is exceeded,
Buyer or Sellers, as the case may be, shall have the right to seek
reimbursement of said threshold amount from Sellers or Buyer, as the
case may be, under this Section 6. In addition, the foregoing
threshold amount shall not apply to the Adjustment Amount.
Notwithstanding anything contained in this Section 6.6., the limits on
indemnification contained in the preceding sentence shall exclude any
obligations specifically assumed by any party in this Agreement,
including without limitation, the obligations relating to taxes,
brokers as described in Sections 3.21., 5.2. and 9.5., respectively.
After the Closing, Buyer shall cause the Company to maintain
commercially reasonable third party insurance consistent with the
insurance maintained
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by the Company prior to the Closing. The amount any indemnifying party
is or may be required to pay to any indemnified party pursuant to this
Section 6. shall be reduced by any insurance proceeds or other amounts
actually recovered by or on behalf of the indemnified party, and no
insurance company or any other third party shall be a beneficiary of
Sellers' or Buyer's indemnity obligations under this Agreement and in
no way shall any obligations of any insurance company or other third
party be reduced or mitigated as a result of this Agreement.
6.7. SOLE BASIS FOR RECOVERY.
Unless specifically provided for elsewhere in this Agreement, the
parties intend Section 6. to be the exclusive method for compensating
each other for, or indemnifying each other against, claims relating to
the Company and the transactions contemplated by this Agreement.
6.8. JOINT AND SEVERAL LIABILITY.
Notwithstanding any provision in this Agreement to the contrary,
it is understood and agreed that Buyer shall not have any obligation
to ▇▇▇▇▇▇▇▇ its claims hereunder to minimize the obligations of any of
the Sellers, and the liability of Sellers under this Section 6. shall
be as follows:
(a) Except as otherwise provided in Section 6.6. above, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Cyrus, ▇▇▇▇▇ ▇. ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
shall be liable jointly, severally, and in solido for all Losses
up to the amount of $4,725,000.00; and
(b) the warranties of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Custodian for ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (collectively "Minority Shareholders" or
individually "Minority Shareholder") are limited to the
following: (i) each Minority Shareholder warrants that with
respect to that particular Minority Shareholder's Shares that
Minority Shareholder has the requisite power and authority to
enter into this Agreement and consummate the transactions
contemplated hereby; (ii) each of said Minority Shareholders
warrants that with respect to that particular Minority
Shareholder's Shares that said Shares are owned beneficially and
of record by said Minority Shareholder, and are being transferred
to Buyer free and clear of all liens, mortgages, pledges,
security interests, restrictions, prior assignments, encumbrances
and claims of any kind or nature whatsoever, other than those set
forth on Schedule 3.3 ("Minority Shareholder Warranties"). The
warranties set forth in this Section 6.8.(b) shall be the only
warranties applicable under which any indemnity can be recovered
from a Minority Shareholder; and
(c) the liability of each Minority Shareholder shall be limited
to their respective percentage allocation of the Purchase Price
as set forth in Section 2.2.1. above with respect to any claim
under the Minority Shareholder Warranties under
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Section 6.8.(b) and said Minority Shareholders shall incur no
other liability whatsoever.
7. DOCUMENTS TO BE DELIVERED AT CLOSING.
7.1. CLOSING DOCUMENTS DELIVERED BY SELLERS.
Buyer shall have received at the Closing the following documents,
dated as of the Closing date:
7.1.1. THE EXECUTED EMPLOYMENT AGREEMENTS AND CONSULTING
AGREEMENT REFERRED TO IN SECTION 5.3.1. ABOVE.
7.1.2. INTENTIONALLY LEFT BLANK
7.1.3. The executed Lease.
7.1.4. Stock certificates representing the Shares, duly
endorsed for transfer.
7.1.5. AN OPINION OF COUNSEL TO SELLERS IN A FORM ACCEPTABLE
TO COUNSEL TO BUYER REGARDING THE OWNERSHIP OF THE SHARES AND THE
AUTHORITY OF EACH OF THE SELLERS TO ENTER INTO THIS AGREEMENT AND
TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.
7.1.6. ANY OTHER DOCUMENTS, CERTIFICATES, OR INSTRUMENTS
CONTEMPLATED BY THIS AGREEMENT TO BE DELIVERED BY SELLERS TO
BUYER, INCLUDING BUT NOT LIMITED TO THE CONSENTS LISTED IN
SCHEDULE 3.7.
7.1.7. A FULLY EXECUTED CERTIFICATION OF NON-FOREIGN STATUS
DESCRIBED IN TREASURY REGULATION SECTION 1.1445-2(A)(2) (AND
APPLICABLE PROVISIONS OF STATE LAW), IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO COUNSEL TO BUYER, FROM EACH SELLER.
7.1.8. Executed letters of resignation by each officer and
director of the Company.
7.1.9. Non-Disturbance and Attornment Agreement executed by
the lessors (as described in Section 5.4. above) and each lender
that holds a mortgage affecting the immovable property affected
by each Lease.
7.2. Closing Documents Delivered by Buyer.
Sellers shall have received at the Closing the following
documents, dated as of the Closing date:
7.2.1. ANY DOCUMENTS, CERTIFICATES, OR INSTRUMENTS
CONTEMPLATED BY
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THIS AGREEMENT TO BE DELIVERED BY BUYER TO SELLERS.
8. RELEASE.
(a) As of the Closing Date and, except as may be set forth in Section
6.2. of this Agreement, each of the Sellers does hereby for himself and his
successors and assigns remise, release, acquit and forever discharge the Buyer,
the Company, and their respective affiliates, and their successors and assigns,
of and from any and all claims, demands, liabilities, responsibilities,
disputes, causes of action and obligations of every nature whatsoever,
liquidated or unliquidated, known or unknown, matured or unmatured, fixed or
contingent, that such Seller or its affiliates now has, owns or holds or has at
any time previously had, owned or held against such parties, including without
limitation all liabilities created as a result of the negligence, gross
negligence and willful acts of the Company and its employees and agents, or
under a theory of strict liability, existing as of the Closing Date or relating
to any action, omission or event occurring on or prior to the Closing Date;
provided, however, that any claims, liabilities, debts or causes of action that
may arise in connection with the failure of any of the parties hereto to perform
any of their obligations hereunder or under any other agreement relating to the
transactions contemplated hereby or from any breaches by any of them of any
representations or warranties herein or in connection with any of such other
agreements shall not be released or discharged pursuant to this Agreement.
(b) Each of the Sellers represents and warrants that, he has not
previously assigned or transferred, or purported to assign or transfer, to any
person or entity whatsoever all or any part of the claims, demands, liabilities,
responsibilities, disputes, causes of action or obligations released herein.
Each of the Sellers covenants and agrees that such Seller will not assign or
transfer to any person or entity whatsoever all or any part of the claims,
demands, liabilities, responsibilities, disputes, causes of action or
obligations to be released herein. Each of the Sellers represents and warrants
that such Seller has read and understands all of the provisions of this Section
8. and that he has been represented by legal counsel of his own choosing in
connection with the negotiation, execution and delivery of this Agreement.
(c) The release provided by the Sellers pursuant to this Section 8.
shall apply notwithstanding that the matter for which release is provided may
relate to the ordinary, sole or contributory negligence, gross negligence,
willful misconduct or violation of law by a released party, including the Buyer
and the Company and their respective officers, directors, employees and agents,
and for liabilities based on theories of strict liability, and shall be
applicable whether or not negligence of the released party is alleged or proven,
it being the intention of the parties to release the released party from and
against its ordinary, sole and contributory negligence and gross negligence as
well as liabilities based on the willful actions or omissions of the released
party and liabilities based on theories of strict liability.
(d) Notwithstanding any provision in parts (a), (b), and (c) of this
Section 8 to the contrary, the Sellers and Buyer agree that said parts (a), (b),
and (c) only apply to claims and matters arising prior to the execution of this
Agreement by all parties.
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9. MISCELLANEOUS.
9.1. NOTICES.
All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally or sent by fax during normal business hours of the
recipient, the next business day if sent by a national overnight
delivery service, charges prepaid, or three (3) days after mailed by
certified or registered mail, postage prepaid, return receipt
requested, to the parties, their successors in interest or their
assignees at the following addresses, or at such other addresses as
the parties may designate by written notice in the manner aforesaid:
If to Buyer:
T-3 Energy Services, Inc.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
with a required copy to:
Liskow & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to Sellers:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9.2. ASSIGNABILITY AND PARTIES IN INTEREST.
Buyer may freely assign the rights and obligations under this
Agreement. Sellers may, with the written consent of Buyer (which will
not be unreasonably withheld if such assignee has the financial
capacity to assume and honor the indemnity obligations hereunder),
assign the rights and obligations under this Agreement among their
affiliates or in connection with a sale of their business. In either
case, any such assignee must expressly assume all indemnity
obligations hereunder. This Agreement shall inure
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to the benefit of and be binding upon Buyer and Sellers and their
respective pennitted successors and assigns.
9.3. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF LOUISIANA APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THAT STATE.
9.4. COUNTERPARTS.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of
which shall constitute but one and the same instrument.
9.5. INDEMNIFICATION FOR BROKERAGE.
Buyer and Sellers each represent and warrant that, except as set
forth in Schedule 9.5., no broker or finder has acted on its behalf in
connection with this Agreement or the transactions contemplated
hereby. In addition to the indemnification obligations contained in
Section 6., each party hereto agrees to indemnify and hold harmless
the others from any claim or demand for commissions or other
compensation by any broker, finder or similar agent who is or claims
to have been employed by or on behalf of such party.
9.6. PUBLICITY.
Sellers and Buyer agree that press releases and other
announcements to be made by any of them with respect to the
transactions contemplated hereby shall be subject to mutual agreement.
Notwithstanding the foregoing, Sellers and Buyer may respond to
inquiries relating to this Agreement and the transactions contemplated
hereby by the press, securities analysts, employees, or customers
without any notice or further consent of the other parties hereto.
9.7. COMPLETE AGREEMENT.
This Agreement, the Exhibits hereto, the Schedules and the
documents delivered pursuant to this Agreement contain or will contain
the entire agreement between the parties hereto with respect to the
transactions contemplated herein and shall supersede all previous oral
and written and all contemporaneous oral negotiations, commitments,
and understandings.
9.8. INTERPRETATION.
The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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9.9. SEVERABILITY.
Any provision of this Agreement which is invalid, illegal, or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality, or
unenforceability, without affecting in any way the remaining
provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal, or unenforceable in any
other jurisdiction.
9.10. KNOWLEDGE: DUE DILIGENCE INVESTIGATION.
All representations and warranties contained herein which are
made to the knowledge of Sellers shall mean to the knowledge of
SELLERS based on, and assuming they had conducted, a reasonable
investigation of such matters.
9.11. EXPENSES OF TRANSACTIONS.
All fees, costs and expenses incurred by Buyer or Sellers in
connection with the transactions contemplated by this Agreement shall
be borne by the party incurring the same.
9.12. LIMIT ON INTEREST.
Notwithstanding anything in this Agreement to the contrary,
neither party hereto shall be obligated to pay interest at a rate
higher than the maximum rate permitted by applicable law.
9.13. SUBMISSION TO JURISDICTION.
Each of the parties hereto irrevocably consents that any legal
action or proceeding against it or any of its property with respect to
this Agreement or any other agreement executed in connection herewith
may be brought in any court of the State of Louisiana (located in
Lafayette), any Federal court of the United States of America located
in Lafayette, Louisiana, or both, and by the execution and delivery of
this Agreement each party hereto hereby accepts with regard to any
such action or proceeding for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts.
9.14. ARBITRATION.
Any controversy, dispute, or claim arising out of, in connection
with, or in relation to, the interpretation, performance or breach of
this Agreement, including, without limitation, the validity, scope,
and enforceability of this Section 9.14., may at the election of Buyer
or Sellers be solely and finally settled by arbitration conducted in
Houston, Texas or New Orleans, Louisiana, by and in accordance with
the then existing rules for commercial arbitration of the American
Arbitration Association, or any successor organization; provided
however, that this Section 9.14. shall not apply nor be interpreted
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to affect the resolution of a Dispute Notice through the arbitration
procedures set forth in Section 2.3.3. of this Agreement. Judgment
upon any award rendered by the arbitrator(s) may be entered by the
state or Federal Court having jurisdiction thereof Any of the parties
may demand arbitration by written notice to the other and to the
American Arbitration Association ("Demand for Arbitration"). Any
Demand for Arbitration pursuant to this Section 9.14. shall be made
within 180 days from the date that the dispute upon which the demand
is based arose or the other parties shall have the option to have such
dispute adjudicated in a court of competent jurisdiction in the State
of Delaware. The Arbitrators shall conduct the arbitration in a manner
in accordance with the laws of the State of Louisiana and the rules of
the American Arbitration Association. The arbitrators may only award
compensatory damages and are specifically not empowered to award
punitive damages. The parties hereby expressly waive any right any of
them may have to punitive damages. The parties intend that this
agreement to arbitrate be valid, enforceable and irrevocable.
9.15. WAIVER OF PUNITIVE DAMAGES.
The parties hereby waive any right any of them may have to
punitive damages.
9.16. CROSS REFERENCE.
Any statement made in or attachment to a Schedule or Exhibit to
this Agreement shall be deemed included in or attached to each and
every other Schedule or Exhibit attached to this Agreement for
purposes of the representations and warranties made by Sellers.
9.17. COUNTERPARTS.
This Agreement and the attached Spousal Acknowledgment may be
executed in counterparts, and all such counterparts shall constitute
one and the same instrument.
(Remainder of page intentionally blank)
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IN WITNESS WHEREOF, the undersigned duly execute this Agreement as of
the date first written above.
SELLERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. CYRUS
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▇▇▇▇▇▇ ▇. Cyrus
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as Custodian for ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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BUYER:
T-3 ENERGY SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
Title: President
EX-228