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EXHIBIT 2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of October
7, 1996 by, between and among ▇▇▇▇▇▇ Drilling Company, Inc., a Delaware
corporation (hereinafter referred to as "Purchaser"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ (hereinafter referred to as "Sellers") and
Quail Tools, Inc., a Louisiana corporation (the "Company" or the
"Corporation").
W I T N E S S E T H :
WHEREAS, Sellers desire to sell and the Purchaser and the Company
desire to purchase all of the outstanding shares (the "Shares") of common stock
of Quail Tools, Inc. and Sellers desire to sell the Shares for the
consideration and on the terms and conditions set forth herein; and,
WHEREAS, Purchaser and Sellers desire to enter into certain
non-competition agreements (the "Non-Competition Agreements") as provided in
Section 4.01.
NOW, THEREFORE, the parties hereto hereby agree as follows:
I.
PURCHASE AND SALE OF ASSETS
1.01 PURCHASE AND SALE.
(a) At least one day prior to the closing of the
transaction contemplated hereby (the "Closing") provided all conditions to
closing, other than Section 9.02(h), have been satisfied, Sellers shall sell
(in proportion to their ownership of
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all of the Shares as among themselves) and convey unto the Corporation Four
Hundred Sixty-Four (464) shares of common stock of the Corporation, which
constitutes seven (7%) percent of all issued and outstanding shares of common
stock of the Corporation, in exchange for all of the Corporation's rights,
title and interest in and to all cash as reflected on the Corporation's records
(taking into account any amount of outstanding and unpaid checks), demand
deposits, time deposits, certificates of deposit, money market accounts,
marketable securities and other assets, more fully described on Schedule
1.01(a) attached hereto, owned by the Corporation on the Closing. The
Corporation shall execute any and all bills of sale, stock powers, conveyances,
motor vehicle title transfers and the like in order to properly and effectively
convey title to the assets described on Schedule 1.01(a) to Sellers in
accordance herewith. Purchaser hereby obligates itself to cause the
Corporation to so execute any and all of such bills of sale, stock powers,
conveyances, motor vehicle transfers and the like in order to properly
effectuate a transfer of the ownership of these assets to Sellers in the
proportions as determined by Sellers.
(b) Upon the terms and subject to the conditions
contained in this Agreement, Purchaser shall purchase from Sellers and Sellers
shall sell at the Closing the remainder of the Shares consisting of 6,164
shares of common stock, no par value per share, free and clear of any and all
liens, mortgages, encumbrances and security interests.
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1.02 STOCK PURCHASE PRICE.
(a) The initial purchase price for the Shares purchased
by Purchaser ("Initial Purchase Price") shall be Sixty-Four Million, Nine
Hundred Seventy and no/100 ($64,970,000.00) Dollars, which shall be allocated
among the Sellers in proportion to the Shares sold by each of them to the
Purchaser, as among themselves.
(b)(1) The Initial Purchase Price shall be adjusted to the
final purchase price ("Final Purchase Price") by increasing the Initial
Purchase Price by the increase in the Net Assets, as hereinafter defined, or by
decreasing the Initial Purchase Price by the decrease in the Net Assets of the
Corporation between June 30, 1996 and the Closing as reflected on the Closing
Balance Sheet (as hereinafter defined).
(2) The term "Net Assets" is defined for purposes of this
Section 1.02(b) as the excess of (1) the book value of all of the Corporation's
assets(calculated without regard to accumulated depreciation), other than its
cash, money market accounts, demand accounts, mutual fund accounts, stock and
bond brokerage accounts, investments and the other assets described in Schedule
1.01(a), over (2) the book amounts of all the Corporation's current and
long-term fixed liabilities and accrued expenses, without regard to contingent
liabilities and without regard to unpaid ad valorem taxes for the fiscal year
in which Closing occurs, whether or not any of the Corporation's assets are
then subject to a lien therefor. All determinations of book value and book
amounts shall be made in accordance with the accounting principles, methods and
conventions employed in the preparation of the Corporation's June
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30, 1996 balance sheet, a copy of which is attached as part of Schedule
1.02(b)(2) (hereinafter "Interim Financial Statements"). Net assets at June
30, 1996 were $28,003,372.
(3) The term "Closing Balance Sheet" means for purposes
of this Section 1.02(b) the balance sheet of the Corporation as of the close of
business on the date on which the Closing occurs prepared in accordance with
the same accounting principles, methods and conventions employed in the
preparation of the Corporation's June 30, 1996 balance sheet. The Closing
Balance Sheet shall be prepared by a certified public accountant or certified
public accounting firm designated by Sellers and shall be presented to Sellers
and Purchaser within forty-five (45) days following the Closing. In the event
either Sellers or Purchaser disagree with any of the figures shown on the
Closing Balance Sheet, they or it shall notify the other parties hereto within
ten (10) days after their receipt of it along with the reasons why that party
is in disagreement. If the parties have not resolved their disagreements with
respect to the Closing Balance Sheet within twenty (20) days after said notice,
Sellers and Purchaser shall submit the handling of any disputed items to an
independent nationally recognized accounting firm (other than Coopers and
▇▇▇▇▇▇▇ and KPMG Peat, Marwick) selected in writing by Purchaser and Sellers
for resolution. If Purchaser and Sellers are unable to agree upon such a
nationally recognized independent accounting firm within ten (10) days after
expiration of said twenty (20) day period, such an independent nationally
recognized accounting firm shall be selected
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in accordance with the rules of the American Arbitration Association
("Arbitrator"). The Arbitrator shall submit the correct Closing Balance Sheet
to Purchaser and Sellers and shall certify the increase or decrease in Net
Assets from the June 30, 1996 Financial Statements.
1.03 CLOSING. The closing (the "Closing") shall take place at the
offices of Messrs. Jones, Walker, Waechter, Poitevent, Carrere and ▇▇▇▇▇▇▇,
Baton Rouge, Louisiana, on a mutually agreeable date (the "Closing Date"), but
not later than ten (10) days following satisfaction of all conditions to
Closing set forth in Article IX. Assuming the conditions set forth in Article
IX shall have been satisfied, the Closing shall be deemed effective as of the
close of business of the Corporation on the date of the Closing. At the
Closing:
(a) Unless delivered prior to Closing, Sellers shall
deliver to the Corporation certificates representing Four Hundred Sixty-Four
(464) shares of common stock of the Corporation, in the aggregate, with stock
powers attached executed in blank, and the Corporation shall transfer to
Sellers an amount of cash (by certified check or wire transfer) estimated to be
equal to the dollar amount of the Corporation's cash on deposit as reflected on
the Corporation's records (taking into account all outstanding and unpaid
checks) and in demand and time accounts as of the date of the Closing and shall
execute all bills of sale and title transfers of motor vehicles (without any
warranties of condition, but with full warranty of title, free and clear of all
liens and security
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interests), and shall deliver all certificates representing shares of capital
stock (with stock powers endorsed in blank attached) as well as all instruments
of conveyance and endorsements necessary to convey to Sellers title to all of
the other assets the types of which are described on Schedule 1.01(a) free and
clear of all liens, security interests and encumbrances.
(b) Purchaser shall deliver to Sellers by wire transfer
or certified funds cash in an amount equal to Sixty-Four Million, Nine Hundred
Seventy and no/100 ($64,970,000.00) Dollars, allocated among Sellers in
proportion to their ownership of the remaining outstanding shares of capital
stock of the Corporation.
(c) Sellers shall deliver to Purchaser certificates
representing in the aggregate Six Thousand, One Hundred Sixty-Four (6,164)
Shares with stock powers attached executed in blank, free and clear of all
liens, mortgages, security interests and encumbrances.
(d) Purchaser shall deliver in cash (by wire transfer or
bank cashier's check) the sum of Ten Thousand and no/100 ($10,000.00) Dollars
to each Seller in full payment of the noncompete fee provided in Section
4.01(b).
1.04 POST-CLOSING. (a) If the Closing Balance Sheet reflects
that the amount of cash paid by the Corporation to Sellers was less than or
greater than the amounts thereof in all of the Corporation's demand and time
deposits, money market and other accounts (excepting those accounts which were
actually transferred or assigned by the Corporation to Sellers at Closing) the
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Corporation shall pay to or receive from, respectively, Sellers (in proportion
to their present ownership of the Shares) the difference in cash (by wire
transfer or bank cashier's check) within ten (10) days following the date on
which the Closing Balance Sheet has been agreed upon or determined to be
accurate.
(b) Within ten (10) days following the date on which the
Closing Balance Sheet has been agreed upon by the parties or otherwise
determined to be accurate, if the Net Assets of the Corporation as reflected on
the Closing Balance Sheet are more than or less than the Net Assets as
reflected on the June 30, 1996 balance sheet of the Corporation, attached as
part of Schedule 1.02(b)(2), Purchaser shall pay to or receive from,
respectively, Sellers (in proportion to their present ownership of the Shares)
cash (by wire transfer or bank cashier's check) equal to the difference.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
For purposes of this Agreement the business (the "Business") of the
Company is the oil field pipe, equipment and rental tool business and consists
of the acquisition (as owner or lessee) and financing and the disposition of
pipe, equipment and rental tools, their rental, lease and sublease to
customers, their delivery to and retrieval from customers, their repair and
maintenance and all services and activities related thereto, and the phrase "in
the ordinary course" means in the course of performing any one or more of the
enumerated activities. Sellers herewith represent and warrant to Purchaser as
of the date hereof and as of the Closing Date (unless another date is expressly
set forth below) that:
2.01 CORPORATE EXISTENCE AND POWER. The Corporation is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Louisiana, and the Corporation has all corporate powers
and all material governmental licenses, permits, authorizations, consents and
approvals required to carry on the Business as now conducted. Subject to the
provisions of the following sentence, the Corporation is duly qualified to
conduct business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities make such qualification necessary. The parties
recognize, however, that the Corporation is not qualified to conduct business
in the States of California, Texas, Mississippi, Alabama and Florida, but
because it merely
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delivers rental pipe, equipment and tools to those states and does not maintain
offices there, the Corporation does not believe it is necessary for it to
qualify in those states, although it makes no representation that qualification
in those states is not required. Sellers have heretofore delivered to
Purchaser true and complete copies of the Corporation's Articles of
Incorporation and By-Laws as currently in effect.
2.02 AUTHORIZATION. (a) The execution, delivery and performance by
Sellers of this Agreement and the consummation by Sellers of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
governmental body, agency, official or authority, except as may be required
under 15 U.S.C. Section 18a.
(b) Sellers have all requisite power and authority to
execute and deliver this Agreement and to perform their obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Sellers and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action, and no other action on the part of the Sellers is necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Sellers and
constitutes the valid and legally binding obligation of the Sellers enforceable
against the Sellers in accordance with its terms.
2.03 NON-CONTRAVENTION. The execution, delivery and performance by
Sellers of this Agreement and the consummation by
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Sellers of the transactions contemplated hereby do not and will not (i)
contravene or conflict with the Articles of Incorporation or bylaws of the
Corporation (other than the right of first refusal in favor of the Corporation
and all shareholders which will be waived at Closing), (ii) contravene or
conflict with or constitute a violation of any provision of law, regulation,
judgment, injunction, order or decree binding upon or applicable to Sellers or
the Corporation, or (iii) except as disclosed in Schedule 2.03, require any
consent, approval or other action by any person or constitute a default under
any obligation of Sellers or the Corporation under any provision of any
contract or other instrument binding upon Sellers or the Corporation other than
contracts and obligations that will be terminated and fully discharged at the
Closing and other than contracts which provide that they may be cancelled
unilaterally upon notice to Sellers or the Corporation, without penalty or
economic consequences adverse to the Corporation.
2.04 SUBSIDIARIES. The Corporation does not own, directly or
indirectly, any capital stock, equity interest or other ownership interest in
any corporation, partnership, association, joint venture, limited liability
company or other entity, other than ownership of less than one (1%) percent of
the outstanding shares of any publicly-traded corporation.
2.05 FINANCIAL STATEMENTS. The balance sheet of the Corporation
for the year ended December 31, 1995 (such date referred to herein as the
"Balance Sheet Date" and such balance
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sheet the "Balance Sheet"), and the related statements of income for the year
ended December 31, 1995 dated September 22, 1996 (collectively, the "Financial
Statements") have been previously delivered to Purchaser. The Financial
Statements were prepared in accordance with Generally Accepted Accounting
Principles ("GAAP") applied on a consistent basis. The Financial Statements
fairly present the financial position of the Corporation
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as of the date thereof and its results of operations for the period then ended.
The unaudited balance sheet and income statement as of and for the six months
ended June 30, 1996 (the "Interim Financial Statements") attached hereto as
Schedule 1.02(b)(2) were prepared in accordance with GAAP applied on a
consistent basis (except as noted therein and except that marketable shares of
capital stock and marketable securities are shown thereon at the Corporation's
cost thereof rather than at current market value) and fairly present in all
material respects the financial position of the Corporation as of the date
thereof and the results of operations for the periods then ended (subject to
the qualifications described therein).
2.06 ABSENCE OF CERTAIN CHANGES. Since the Balance Sheet Date to
the date hereof, the Corporation has conducted the Business in the ordinary
course consistent with past practice and, except as set forth in Schedule 2.06
or disclosed on the Interim Financial Statements, there has not been:
(a) Any event, occurrence, development or state of
circumstances or facts which has had or could reasonably be expected to have a
material adverse effect on the Corporation;
(b) Any incurrence, assumption or guarantee of any
indebtedness for borrowed money or any purchase money obligation or other debt
or liability, except in the ordinary course of the Business consistent with
past practice;
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(c) Any creation or other incurrence of any Lien (as
defined in Section 2.07) on any asset of the Corporation, except for Permitted
Liens;
(d) Any making of any loan, advance or capital
contributions to or investment in any person;
(e) Any material damage, destruction or other casualty
loss affecting any of the assets of the Corporation, except those covered by
insurance;
(f) Any transaction or commitment made, or any contract
or agreement entered into, by the Corporation relating to its assets or the
Business or any relinquishment of any contract or other right, in either case,
material to the Corporation, other than transactions and commitments (including
acquisitions and dispositions of pipe, tools and equipment) in the ordinary
course of the Business consistent with past practice;
(g) Any general or specific increase in the salary or
other compensation (including, without limitation, bonuses, profit sharing,
deferred compensation or other employee benefits) payable or to become payable
to any employees of the Corporation, except in the ordinary course of the
Business consistent with past practice with respect to employees who are not
officers or directors of Seller, except bonuses paid to certain employees
between the date hereof and the Closing for their many years of service to the
Corporation but with respect to which neither the Purchaser nor the Corporation
will have any liability following the Closing other than for personal income
tax withheld therefrom and for employment
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taxes with respect to which the due date for payment thereof occurs after the
Closing and which will be reflected as liabilities on the Closing Balance
Sheet;
(h) Any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or representative
thereof to organize any employees of the Corporation or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to any
employees of the Corporation; (I) Any declaration, setting
aside or payment of dividends or distributions in respect of shares of Common
Stock in the form of assets other than of the types described on Schedule
1.01(a) or any redemption, purchase or other acquisition of any other
securities of the Corporation;
(j) Any amendment to the articles of incorporation,
bylaws or other organizational documents;
(k) Any change in its accounting methods, principles or
practices other than as required by Generally Accepted Accounting Principles;
or
(l) Any agreement or understanding entered into to do any
of the foregoing.
2.07 PROPERTIES.
(a) The Corporation has good and marketable title to, or
in the case of leased property valid leasehold interests in, all property and
assets (whether real or personal, tangible or intangible) reflected on the
Balance Sheet or acquired after the
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Balance Sheet Date, except for properties and assets sold since the Balance
Sheet Date in the ordinary course of business consistent with past practice.
None of such properties or assets is subject to any liens, mortgages, security
interests or other encumbrances (herein "Liens") except:
(i) Liens disclosed on the Balance Sheet;
(ii) Liens for taxes not yet due or being
contested in good faith (and for which
adequate accruals or reserves have been
established on the Balance Sheet);
(iii) Liens disclosed in Schedule 2.07(a) or which
will be discharged at the Closing;
(iv) Liens which do not materially detract from
the value of such property or assets as now
used, or materially interfere with any
present or intended use of such property or
assets; or
(v) Liens in favor of vendors and lessors
incurred in the ordinary course of the
Business.
Clauses (i), (ii), (iii) (iv) and (v) are, collectively, referred to herein as
"Permitted Liens".
(b) To the knowledge of Sellers and except as reflected
on the Interim Financial Statements, there are no developments affecting any of
such properties or assets pending or threatened which could materially detract
from the value of such property or assets, materially interfere with any
present or intended use of any such property or assets or materially adversely
affect the marketability of such properties or assets.
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(c) All such leases of real and personal property with
respect to which the Corporation is a lessee are as of the date hereof and will
be on the Closing Date valid, binding and enforceable in accordance with their
respective terms and there does not exist under any such lease any material
default or any event which with notice or lapse of time or both would
constitute a material default.
2.08 NO UNDISCLOSED MATERIAL LIABILITIES. Except as disclosed on
Schedule 2.08, as of the Closing there will be no liabilities of the
Corporation of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and to the best of Sellers' knowledge,
there is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability, other than:
(i) Liabilities disclosed or provided for in the
Closing Balance Sheet; and,
(ii) Liabilities for which adequate insurance is
available.
2.09 LITIGATION. Except as set forth in Schedule 2.09, as of the
date hereof there is no action, suit, investigation or proceeding (or any basis
therefor) pending against, or to the knowledge of Sellers threatened against or
affecting, Sellers, the Corporation or any of their or its properties before
any court or arbitrator or any governmental body, agency, official or
authority, which, individually or in the aggregate, if determined or resolved
adversely to Sellers or the Corporation in accordance with the
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plaintiff's demands, would reasonably be expected to have a Material Adverse
Effect on Sellers or the Corporation or which in any manner challenges or seeks
to prevent, enjoin, alter or materially delay the transactions contemplated by
this Agreement.
2.10 MATERIAL CONTRACTS.
(a) Except as disclosed in Schedule 2.10(a) and elsewhere
in this Agreement, as of the date hereof the Corporation is not a party to or
subject to:
(i) Any lease of real or immovable property;
(ii) Any lease that is material to the Corporation
of personal or movable property as lessee,
other than equipment leased from third
parties and sublet to customers in the
ordinary course of the Business;
(iii) Any contract for the purchase of materials,
supplies, goods, services, equipment or other
assets, other than in the ordinary course of
the Business and which do not require
payments in excess of Two Million and No/100
($2,000,000.00) Dollars;
(iv) Any sales, distribution or other similar
agreement providing for the sale by the
Corporation of materials, supplies, goods,
services, equipment or other assets, other
than to customers in the ordinary course of
the Business;
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(v) Any lease of any item of tangible personal or
movable property or real or immovable
property as lessor other than to customers in
the ordinary course of the Business;
(vi) Any partnership, joint venture or other
similar contract, arrangement or agreement;
(vii) Any contract relating to indebtedness for
borrowed money (whether incurred, assumed,
guaranteed or secured by any asset);
(viii) Any license, franchise or similar agreement;
(ix) Any agency, dealer, sales representative or
other similar agreement;
(x) Any contract or commitment that substantially
limits the freedom of the Corporation to
compete in any line of business or with any
person or in any area or to own, operate,
sell, transfer, pledge or otherwise dispose
of or encumber any asset or which would so
limit the freedom of the Corporation after
the Closing;
(xi) Any consulting agreement;
(xii) Any contract relating to any guaranty or
indemnity issued by the Corporation;
(xiii) Any agreement relating to the acquisition or
disposition of any part of the Business;
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(xiv) Any other contract or commitment not made in
the ordinary course of the Business
consistent with past practice or which
involves consideration in excess of Two
Million and No/100 ($2,000,000.00) Dollars;
(xv) Any agreement under which the Corporation has
advanced or loaned any amount of money to any
director, officer or employee;
(xvi) Any contract relating to employment,
severance or similar arrangements; or
(xvii) Any material leases or other material
contracts with respect to the furnishing of
rental tools to customers, other than all
leases and contracts for the furnishing of
rental tools to Exxon Corporation, Texaco,
Inc., Vastar Resources, Inc., Unocal, Inc.
and Apache Oil Co., Inc. entered into the
ordinary course of the Business. For
purposes of this clause (xvii) material
leases or contracts are only those involving
more than ten (10%) percent of the value of
all pipe, rental tools and equipment owned by
the Corporation.
(b) Each contract to which the Corporation is a party is
a valid and binding agreement of the Corporation, and, to the knowledge of
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Sellers, as of the date hereof is in full force and effect, and neither the
Corporation nor, to the knowledge of Sellers, any other party thereto is in
default or breach in any material respect under the terms of any such Contract,
nor, to the knowledge of Sellers, has any event or circumstance occurred that,
with notice or lapse of time or both, would constitute any such default or
breach.
2.11 LICENSES AND PERMITS. Schedule 2.11 correctly describes each
material governmental license, permit, authorization, consent or approval
affecting, or relating in any way to, the Corporation and its business,
together with the name of the governmental agency or entity issuing such
license or permit (the "Permits"). Except as set forth on Schedule 2.11, such
Permits are valid and in full force and effect and will not be terminated or
impaired or become terminable as a result of the transactions contemplated
hereby.
2.12 INSURANCE COVERAGE. Sellers have furnished or provided access
to Purchaser of true and complete copies of, all insurance policies currently
in effect covering the assets, the Business and the employees of the
Corporation. Except as disclosed on Schedule 2.12, as of the date hereof there
is no claim by the Corporation pending under any of such policies as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies. All premiums payable under all such policies have been paid and the
Corporation is otherwise in full compliance with the terms and conditions of
all such policies.
2.13 COMPLIANCE WITH LAWS; NO DEFAULTS.
(a) As of the date hereof, the Corporation is not in
violation of, has not since December 31, 1995 violated, and to
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Sellers' knowledge is not under investigation with respect to or has not been
threatened to be charged with or given notice of any violation of, any law,
rules, ordinances or regulations, judgments, injunctions, orders or decrees
binding upon or applicable to the Corporation, except for any violations set
forth in Schedule 2.13(a) which would not, individually or in the aggregate, if
finally determined adversely, result in a material adverse effect on the
business of the Corporation.
(b) As of the date hereof, the Corporation is not in
default under, and no condition exists that with notice or lapse of time or
both would constitute a default under any contract or other instrument binding
upon the Corporation or affecting or relating to its business or any license,
authorization, permit, consent or approval held by the Corporation or affecting
or relating to its business, except as otherwise disclosed in this Agreement or
in Schedules attached hereto.
2.14 RECEIVABLES. All accounts, notes and other receivables (other
than receivables collected since December 31, 1995) reflected on the Balance
Sheet are, and all accounts, notes and other receivables arising out of or
otherwise relating to the Corporation's business as of the Closing will be,
valid, binding and enforceable, subject to applicable laws governing
bankruptcy, moratorium or creditors' rights generally which may prevent their
enforcement and have arisen only from bona fide transactions entered into in
the ordinary course of the Business; provided, however, no representation is
made as to their collectability or
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the financial ability of the obligors thereon to discharge them. All accounts,
notes and other receivables arising out of or otherwise relating to the
Business at the date of the Interim Financial Statements have been included in
the Interim Financial Statements, and all accounts, notes and other receivables
arising out of or otherwise relating to the Business at the Closing Date will
be reflected in the Closing Balance Sheet. Schedule 2.14 contains an accurate
aging of all accounts, notes and other receivables and bad debt write offs by
the Corporation for the period January 1, 1994 through June 30, 1996.
2.15 INTELLECTUAL PROPERTY.
(a) Schedule 2.15(a) sets forth as of December 31, 1995 a
list of all intellectual property rights (herein "Intellectual Property
Rights") used or held for use or otherwise necessary in connection with the
conduct of the Business, specifying as to each, as applicable: (i) the nature
of such Intellectual Property Right; (ii) the owner of such Intellectual
Property Right and if Seller is not the owner, the rights held by the
Corporation; (iii) the jurisdictions by or in which such Intellectual Property
Right is recognized, issued or registered or in which an application for such
issuance or registration has been filed, including the respective registration
or application numbers; and (iv) material licenses, sublicenses and other
agreements as to which the Corporation is a party and pursuant to which any
person is authorized to use such Intellectual Property Right, including the
identity of all parties thereto, a description of the nature and
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subject matter thereof, the applicable royalty and the term thereof.
(b) (i) Except as set forth in Schedule 2.15(b), the
Corporation has not since January 1, 1996 been sued or charged in writing with
or been a defendant in any claim, suit, action or proceeding relating to its
business that has not been finally terminated prior to the date hereof and that
involves a claim of infringement by the Corporation of any intellectual
property rights of any other person, and (ii) the Corporation has no knowledge
of any basis for any such claim of infringement, and no knowledge of any
continuing infringement by any other person of any intellectual property rights
used or held for use or otherwise necessary in connection with the conduct of
the Business. No such intellectual property right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof by the Corporation or restricting the licensing thereof by the
Corporation to any Person. The Corporation has not entered into any agreement
to indemnify any other person against any charge of infringement of any
intellectual property rights.
(c) As used herein, the term "Intellectual Property
Right" means any trade name, trademark, service name, service ▇▇▇▇, copyright,
invention, patent, trade secret, know-how (including any registrations or
applications for registration of any of the foregoing) or any other similar
type of proprietary intellectual property right.
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2.16 EMPLOYEES. Schedule 2.16 identifies all of the Corporation's
officers and key employees as of December 31, 1995. None of such key employees
has indicated to the Corporation that he or she intends to resign or retire as
a result of the transactions contemplated by this Agreement.
2.17 FEES. There is no investment banker, broker, financial
advisor, finder or other intermediary which has been retained by or is
authorized to act on behalf of Sellers who might be entitled to any fee or
commission from Purchaser upon consummation of the transactions contemplated by
this Agreement. The parties recognize that KPMG Peat, Marwick has acted as
financial advisor for Sellers, but Purchaser shall not be required to pay any
portion of its fees.
2.18 LABOR MATTERS. As of the date hereof, the Corporation is in
compliance with all currently applicable laws respecting employment and
employment practices (including terms and conditions of employment, wages and
hours) and is not engaged in any unfair labor practice, the failure to comply
with which or engagement in which, as the case may be, would reasonably be
expected to have a material adverse effect on the Business. As of the date
hereof there is no unfair labor practice complaint pending or, to the knowledge
of Sellers, threatened against the Corporation before the National Labor
Relations Board or before any other state or local board, agency or tribunal.
2.19 CAPITALIZATION. (A) The entire authorized capital stock of
the Corporation consists of 100,000 shares of common stock, no par value
("Common Stock"), of which 6,628 shares are issued and
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outstanding. All of the issued and outstanding shares of Common Stock have
been duly authorized and are validly issued, fully paid and nonassessable.
Except for the right of first refusal in favor of the Corporation and the
shareholders contained in Article VII of the Articles of Incorporation of the
Corporation (as amended):
(1) All outstanding shares of Common Stock are
owned by the Sellers, and are free and clear of any security interests,
options, warrants, calls, purchase rights, conversion rights, exchange rights,
trusts, voting trusts or other contracts or commitments relating to any capital
stock or other security of the Corporation (other than this Agreement);
(2) There are no outstanding or authorized options,
warrants, purchase rights, conversion rights, exchange rights, trusts, voting
trusts or other contracts or commitments that could require the Corporation to
issue, sell or otherwise cause to become outstanding any shares of its capital
stock;
(3) There are no outstanding or authorized stock
appreciation, phantom stock, profit participation or similar rights with
respect to the Corporation's capital stock; and
(4) There are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the Corporation's
capital stock.
(b) The holders of the Shares are the following persons
in the following amounts:
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SHAREHOLDER SHARES OWNED
----------- ------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 3,246
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,691
▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,691
All of the Shares registered in the names of the above persons may be conveyed
by them without the consent of an person, other than Consents of the
Corporation and the other Sellers which are waivable by them at or prior to the
Closing Date.
2.20 OTHER INFORMATION. None of the documents or information
delivered to Purchaser in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading.
2.21 ENVIRONMENTAL MATTERS. Except for matters disclosed in
Schedule 2.21 and except for matters that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect on the
Company, neither Sellers nor the Company have received any written or oral
notice and nothing has come to their attention (but without having conducted
any environmental tests or surveys or undertaken any other environmental
investigations) to the effect that: (a) the properties, operations and
activities of the Company are not in compliance with all applicable
Environmental Laws (as defined in Section 12.10 hereof); (b) the Company and
the properties and operations of the Company are subject to any existing,
pending or threatened action, suit, investigation, inquiry or proceeding by or
before any court or governmental authority under any Environmental Law; (c) all
Permits, if any, required to be obtained or filed by the Company under any
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Environmental Law in connection with the business of the Company have not been
obtained or filed and any required Permits are not valid and currently in full
force and effect; (d) there has been any release of any hazardous substance,
pollutant or contaminant into the environment by the Company in connection with
its properties or operations; and (e) there has been any exposure of any person
or property to any hazardous substance, pollutant or contaminant in connection
with the properties, operations and activities of the Company. The Company has
made available to the Purchaser all internal and external environmental audits
and studies and all correspondence on substantial environmental matters (in
each case relevant to the Company) in the possession of the Company or the
Sellers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers that:
3.01 ORGANIZATION AND EXISTENCE. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business in Louisiana.
3.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Purchaser of this Agreement and the consummation by Purchaser of
the transactions contemplated hereby or thereby have been duly authorized by
all necessary corporate action on the part of Purchaser. This Agreement
constitutes a valid and binding agreement of Purchaser.
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3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Purchaser of this Agreement requires no action by or in respect
of, or filing with, any governmental body, agency, official or authority,
except as may be required by 15 U.S.C. Section 18a.
3.04 NON-CONTRAVENTION. The execution, delivery and performance by
Purchaser of this Agreement does not and will not (i) contravene or conflict
with the Articles of Incorporation or By-Laws of Purchaser or (ii) assuming
compliance with the matters referred to in Section 3.03, contravene or conflict
with any provision of any law, regulation, judgment, injunction, order or
decree binding upon Purchaser.
3.05 FEES. There is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Purchaser who might be entitled to any fee or commission from Sellers upon
consummation of the transactions contemplated by this Agreement.
3.06 FINANCING. Purchaser will have on the Closing Date sufficient
funds available to purchase the Shares, provided all conditions set forth in
Article IX are satisfied.
3.07 LITIGATION. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of Purchaser threatened against
or affecting, Purchaser before any court or arbitrator or any governmental
body, agency or official which in any matter challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated hereby.
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ARTICLE IV
COVENANTS OF SELLERS
4.01 NON-COMPETITION; NON-SOLICITATION; BUSINESS OPPORTUN-ITIES.
(a) In recognition of, among other things, the nature and scope of the
business and goodwill of the Corporation all of the Shares of capital stock of
which is being acquired by Purchaser, the substantial impairment of value to
Purchaser if Sellers were to compete with Purchaser, the consideration being
paid for this covenant and the reasonable restrictions and limitations imposed
hereby, Sellers agree that from the Closing Date until the second anniversary
of the Closing Date Sellers shall not:
(1) Enter into any competitive endeavors, nor
undertake any commercial activity, which
competes with those businesses which were
conducted by the Corporation immediately
prior to the Closing Date and which the
Corporation continues to conduct within the
following Parishes in the State of Louisiana:
Acadia; ▇▇▇▇▇; Ascension; Assumption;
Avoyelles; East Baton Rouge; ▇▇▇▇▇▇▇▇▇▇;
Bossier; Caddo; Calcasieu; ▇▇▇▇▇▇▇▇▇▇;
Iberia; Iberville; Jefferson; ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇; Lafayette; Lafourche; Orleans;
Plaquemines; Pointe Coupee; Rapides; St.
▇▇▇▇▇▇▇; St. ▇▇▇▇▇▇▇; St. ▇▇▇▇▇▇; St. ▇▇▇▇▇▇;
St. ▇▇▇▇; St. Tammany; Tangipahoa;
Terrebonne; Vermilion; which are all of the
parishes in Louisiana in which the
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Corporation is currently doing business, and,
to the extent enforceable under the laws of
the following states (the laws of which are
herewith adopted as governing for this
purpose), the States of Texas, Mississippi,
Alabama, California and Florida (the
"Geographic Area"), including, without
limitation, (i) leasing, renting, providing
or seeking to lease, or rent equipment of
types provided by the Corporation immediately
prior to the Closing Date which compete with
any goods or services leased, rented or
provided by the Corporation and (ii) being an
owner (except for passive investments of not
more than one (1%) percent of the outstanding
shares of, or any other equity interest in,
any company or entity listed or traded on a
national securities exchange or in an
over-the-counter securities market), agent or
representative of any person in the
Geographic Area which directly competes with
any line or lines of business of the
Corporation which were conducted by the
Corporation immediately prior to the Closing
Date; or
(2) Employ or solicit, or receive or accept the
performance of services by any employee of
the
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Corporation or encourage or induce any such
person to terminate his or her employment
with the Corporation for the purpose of
employing him in the Geographic Area.
(b) The consideration for this Agreement by Sellers is
the payment by Purchaser of the sum of Ten Thousand and no/100 ($10,000.00)
Dollars cash to each Seller on the Closing Date.
(c) The Sellers acknowledge that the covenants contained in
this Agreement are made ancillary to the sale of the Stock by the Sellers, are
reasonably necessary to protect the Business, and the trade secrets and
goodwill thereof, being acquired by Purchaser, and do not impose an undue or
unreasonable hardship upon the Sellers. The Sellers acknowledge further that
Purchaser considers the covenants contained herein to be fundamental conditions
for the consummation of the transactions contemplated by this Agreement, and
that Purchaser would not consummate such transactions in the absence of such
covenants.
(d) Purchaser and the Sellers each agree that it is their
intention that if any portion of this Agreement is found by a court of
competent jurisdiction to be unenforceable, including, without limitation, as
to the duration, geographic area or scope of activities covered by the
covenants contained herein, this Agreement shall be reformed by the court
whereby it is reasonable and, as reformed, shall be agreed to by the parties
and enforced by the court prospectively. If any provision of this Agreement
shall be held by any court of competent jurisdiction to be illegal, void
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or unenforceable, and shall not be reformed as set forth in the immediately
preceding sentence, such provision shall be of no force or effect, but the
illegality and unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
4.02 CONDUCT OF THE BUSINESS. From the date hereof until the
Closing Date, Sellers shall cause the Corporation to conduct the Business in
the ordinary course consistent with past practice and use the Corporation's
best efforts to preserve intact its business organization and relationships
with third parties and to keep available the services of its present officers
and employees. Without limiting the generality of the foregoing, from the date
hereof until the Closing Date, Sellers shall not cause the Corporation to:
(i) Merge or consolidate with any other person or
acquire a material amount of assets of any
other person, other than pipe, tools and
equipment purchased in the ordinary course of
the Business;
(ii) Sell, lease, license or otherwise dispose of
any assets except (a) pursuant to existing
contracts or commitments and (b) in the
ordinary course of the Business consistent
with past practices; or
(iii) Make any declaration, setting aside or
payment of dividends or distributions in
respect
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of shares of Common Stock, other than in the
form of assets of the types described on
Schedule 1.01(a);
(iv) Amend its articles of incorporation, bylaws
or other organizational documents;
(v) Issue, deliver, sell, pledge or otherwise
encumber any shares of capital stock or any
securities convertible into, or exchangeable
or exercisable for, shares of capital stock;
(vi) Except for borrowings under existing credit
facilities in the ordinary course of
business, (1) incur any obligation for
borrowed money or purchase money
indebtedness, or (2) make any loan, advance,
guarantee, capital contribution or investment
in any person;
(vii) Make any change in its accounting methods,
principles or practices other than as
required by Generally Accepted Accounting
Principles;
(viii) Waive the benefits of, or agree to modify,
any material confidentiality, standstill or
similar agreement;
(ix) Except for changes made in the ordinary
course of business not involving officers or
key employees of the Corporation, increase or
otherwise modify (except as contemplated by
this Agreement) the compensation of their
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employees, including salaries, bonus or other
employee benefits, or severance payments or
obligations, or enter into or modify the
terms of any employment, severance or
collective bargaining agreement, except for
bonuses paid to certain employees between the
date hereof and the Closing for their many
years of service to the Corporation, but with
respect to which neither Purchaser nor the
Corporation will have any liability following
the Closing other than for personal income
tax withheld therefrom and for employment
taxes with respect to which the due date for
the payment thereof occurs after the Closing
and which will be reflected as liabilities on
the Closing Balance Sheet;
(x) Except for existing commitments and capital
expenditures as may be necessary to perform
obligations under existing contracts or
maintain the assets in the event of damage
thereto, make any capital expenditure other
than in the ordinary course of the Business
or in an amount in excess of $100,000;
(xi) Adopt or amend any employee benefit plan or
other compensation arrangement, including,
without limitation, any Employee Plan and
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Benefit Arrangement, except for payment for
bonuses referred to in Section 4.02(ix); or
(xii) Agree or commit to do any of the foregoing.
Sellers shall not permit the Corporation to (a) take or agree or commit to take
any action that would make any representation and warranty of Sellers hereunder
inaccurate in any respect at, or as of any time prior to, the Closing Date or
(b) omit or agree to commit or omit to take any action necessary to prevent any
such representation or warranty from being inaccurate in any respect at any
such time.
4.03 ACCESS TO INFORMATION. Sellers (i) will give Purchaser, its
counsel, financial advisors, auditors and other authorized representatives
reasonable access to the offices, properties, books and records of the
Corporation, (ii) will furnish to Purchaser, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating data
and other information relating to the Corporation as such persons may
reasonably request and (iii) will instruct its employees, counsel and financial
advisors to cooperate with Purchaser in its investigation of the Corporation;
provided, however, Purchaser shall utilize the minimum number of personnel as
will not interfere with the conduct of the Corporation's business and shall
utilize them only at the times the Corporation is open for business. No
investigation by Purchaser or other information received by Purchaser shall
operate as a waiver or otherwise affect any
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representation, warranty or agreement given or made by Sellers hereunder.
4.04 NOTICES OF CERTAIN EVENTS. Sellers shall promptly notify
Purchaser of:
(i) Any notice or other communication from any
person alleging that the consent of such
person is or may be required in connection
with the transactions contemplated by this
Agreement;
(ii) Any notice or other communication from any
governmental or regulatory agency or
authority in connection with the transactions
contemplated by this Agreement;
(iii) Any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge,
threatened against, relating to or involving
or otherwise affecting the Corporation or the
Business that, if pending on the date of this
Agreement, would have been required to have
been disclosed pursuant to Section 2.09 or
that relate to the consummation of the
transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF PURCHASER
Purchaser agrees that:
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5.01 CONFIDENTIALITY. Prior to the Closing Date and for a period
of three (3) years after any termination of this Agreement, Purchaser will
hold, and will use its best efforts to cause its respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information (including, without limitation, confidential commercial information
and information with respect to customers and proprietary systems, technologies
or processes) concerning the Business or which the Corporation or Sellers
furnished to Purchaser in connection with the transactions contemplated by this
Agreement, except to the extent that such information can be shown to have been
(i) previously known on a non-confidential basis by Purchaser, (ii) in the
public domain through no fault of Purchaser or (iii) later lawfully acquired by
Purchaser from sources other than the Corporation or Sellers; provided, that
Purchaser may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement so long as such persons are
informed by Purchaser of the confidential nature of such information and are
directed by Purchaser to treat such information confidentially. This
obligation shall be satisfied if Purchaser exercises the same reasonable and
customary care, in light of the industry and its past practices, with respect
to such information as it would take to preserve the confidentiality of its own
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confidential information. If this Agreement is terminated, Purchaser will, and
will use its best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or deliver
to Sellers, upon request, all documents and other materials, and all copies
thereof, obtained by Purchaser or on their behalf from Sellers or the
Corporation in connection with this Agreement that are subject to such
confidence. If this Agreement is not terminated and Closing occurs, Purchaser
agrees that it will retain all documents and other materials obtained by
Purchaser from Sellers or the Corporation in connection with this Agreement and
the transactions contemplated hereby for a reasonable and customary period of
time and will not destroy any material documents during such period without
first providing Seller with the opportunity of making copies thereof.
5.02 ACCESS. On and after the Closing Date, Purchaser will afford
promptly to Sellers and their agents reasonable access to the Corporation's
properties, books, records, employees and auditors to the extent necessary to
permit Sellers to determine any matter relating to their rights and obligations
hereunder and Sellers' federal and state income and other tax liabilities with
respect to any period ending on or before the Closing Date and shall maintain
them for a period of five (5) years following the Closing or for such longer
period as any audit (private, tax or other governmental) of those documents is
continuing; provided that any such access by Sellers shall not unreasonably
interfere with
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the conduct of the Business of the Corporation or Purchaser. Sellers will
hold, and will use their best efforts to cause their officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential documents and information
concerning Purchaser or the Business provided to them pursuant to this Section
5.02.
5.03 NO ELECTION UNDER SECTION 338. (a) Purchaser shall not cause
nor shall the Corporation make or file any election under any provision of
Section 338, including Section 338(h)(10), of the United States Internal
Revenue Code (the "Code") with respect to the transactions contemplated by this
Agreement.
(b) Purchaser shall acquire no asset of the Corporation
and shall take no other action nor permit any action or course of conduct to be
taken by it or by the Corporation, or permit the filing of any Section 338
election with respect to any other stock acquisition by Purchaser of any other
corporation, which would have the same effect as if a formal election under any
provision of Section 338, including Section 338(h)(10), of the Code had been
filed with respect to the transaction contemplated hereby.
(c) In the event the United States (or any of its
agencies or departments, including the Internal Revenue Service) should contend
that an election under Section 338 was made or deemed made by Purchaser or the
Corporation (whether or not attributable to Purchaser's or the Corporation's
actions or
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inactions) resulting in an additional income tax liability for Sellers,
Purchaser shall defend such claim against Sellers at its own cost and expense
upon ten (10) days notice by Sellers to Purchaser. In the event such an
additional income tax liability of Sellers is finally determined, Purchaser
shall pay the full amount thereof (inclusive of any liability of the
Corporation under section 1374 of the Code and any net income tax liability of
Sellers caused by application of section 1374 of the Code) together with
interest and all penalties thereon directly to the United States and, if
applicable, the State of Louisiana as additional consideration for Sellers'
sale of the Shares sold to Purchaser pursuant to this Agreement, within ten
(10) days after notice thereof by Sellers to Purchaser or by the United States
(or any of its representatives) or by the State of Louisiana. In addition,
Purchaser shall within ten (10) days after notice from Sellers pay to Sellers
as additional consideration for their sale of the Shares sold to Purchaser
pursuant to this Agreement, cash in an amount which, after reduction by the
maximum marginal United States and Louisiana individual income tax thereon, is
sufficient for Sellers to discharge their United States and Louisiana income
tax liabilities, interest and penalties (including all interest caused by
application of Section 453A of the Code) on the additional consideration
received in the form of the payment by Purchaser of Sellers' additional United
States and Louisiana individual income tax liabilities, penalties and interest
thereon resulting from application of sections 338, 338(h)(10) and/or 1374.
The amounts
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necessary to discharge Sellers' individual income tax liabilities shall take
into account the fact that a portion of such additional consideration for the
Shares acquired by Purchaser will be deemed interest income (and thus ordinary
income) to Sellers because it will be paid in a taxable year following the
Closing and Sellers will not be allowed any individual income tax deductions
for interest and penalties paid to the United States and/or State of Louisiana
on their income tax deficiencies or for interest imposed pursuant to section
453A of the Code. The parties recognize that the maximum marginal combined
United States and Louisiana individual ordinary income tax rate for calendar
year 1996 is 43.224% calculated as follows: 39.6% (federal) + 6% (100% -
39.6%) (Louisiana), and the maximum marginal combined United States and
Louisiana ordinary income tax rate in future years shall be similarly
calculated, but with adjustments for future law charges. The parties recognize
that the maximum marginal combined United States and Louisiana long-term
capital gains rate for calendar year 1996 is 32.32%, calculated as follows:
28% (federal) + 6% (100% - 28%), and the maximum marginal combined United
States and Louisiana individual long-term capital gain rates in future years
shall be similarly calculated, but by taking into account future law changes.
ARTICLE VI
COVENANTS OF SELLERS AND PURCHASER
Sellers and Purchaser hereto agree that:
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6.01 BEST EFFORTS; FURTHER ASSURANCES. Subject to the terms and
conditions of this Agreement, each of Sellers and Purchaser will use their and
its best efforts to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary or desirable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement.
Sellers and Purchaser each agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable in order to consummate or implement expeditiously
the transactions contemplated by this Agreement, but without expanding the
obligations and responsibilities of any party hereunder.
6.02 CERTAIN FILINGS. Sellers and Purchaser shall cooperate with
one another (a) in determining whether any action by or in respect of, or
filing with, any governmental body, agency, official or authority is required,
or any actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement, including the filing of all
notices under 15 U.S.C. Section 18a, and (b) in taking such actions or making
any such filings, furnishing information required in connection therewith and
seeking timely to obtain any such actions, consents, approvals or waivers.
6.03 PUBLIC ANNOUNCEMENTS. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions
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contemplated hereby and, except as may be required by applicable law, will not
issue any such press release or make any such public statement prior to such
consultation.
6.04 NOTICE OF DEVELOPMENTS. Each party to this Agreement will give
prompt written notice to the other of any material adverse development causing
a breach of any of its representations and warranties under this Agreement,
except for accidents or occurrences which may give rise to liabilities of the
Corporation but with respect to which Sellers reasonably believe will be
covered by insurance.
6.05 NO SOLICITATION. From and after the date of this Agreement until
the termination of this Agreement in accordance with its terms, neither the
Corporation, the Sellers nor any officer, director, employee, agent or
representative of the Corporation shall, directly or indirectly, solicit or
encourage, including by way of furnishing information, the initiation of any
inquiries or proposals regarding, or engage in or continue any discussions or
enter into any agreements regarding, any merger, tender offer, sale of shares
of capital stock or similar business combination transactions involving any or
all of the Business, or any sale of all or substantially all the assets of the
Business, other than in connection with the transaction with Purchaser
contemplated herein.
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ARTICLE VII
TAX MATTERS
7.01 TAX DEFINITIONS. The following terms, as used herein, have
the following meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
"Pre-Closing Taxable Period" means all or a portion of (i) any
taxable period up to and including the Closing Date or (ii) any taxable period
with respect to which the Tax is computed by reference to Tax Items, assets,
capital or operations of the Corporation arising on or before, or existing as
of, the Closing Date.
"Post-Closing Taxable Period" means all or a portion of (i)
any taxable period after the Closing Date or (ii) any taxable period with
respect to which the Tax is computed by reference to Tax Items, assets, capital
or operations of the Corporation arising after, or existing subsequent to, the
Closing Date.
"Tax" means (i) any net income, alternative or add-on minimum,
gross income, gross receipts, sales, use, ad valorem, franchise, capital,
paid-up capital, profits, greenmail, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or any penalty, addition to
tax or additional amount imposed by any governmental authority (domestic or
foreign) responsible for the imposition of any such tax (a "Taxing Authority")
and (ii) any liability to any person (including any applicable Taxing
Authority) in respect of
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any tax included in Clause (i) above by reason of any indemnity, transferee
liability, contractual or legal obligation.
7.02 TAX MATTERS. Sellers hereby represent and warrant to
Purchaser as of the date hereof and as of the Closing Date that, except as
provided in Schedule 7.02:
(a) Sellers have paid or will timely pay all taxes payable by
them individually as primary obligors (and not as transferees of corporate
assets or as corporate officers) attributable to the Corporation and any Pre-
Closing Tax Period which are required to be paid on or prior to the Closing
Date, except for taxes caused by an actual or deemed election under Section 338
of the Code, which is Purchaser's responsibility pursuant to Section 5.03.
(b) (i) All returns and reports ("Tax Returns") of or with
respect to any Tax which is required to be filed on or before the Closing Date
by or with respect to the Corporation have been or will be duly and timely
filed, (ii) all items of income, gain,
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loss, deduction and credit or other items required to be included in each such
Tax Return have been or will be so included and all information provided in
each such Tax Return is true, correct and complete in all material respects,
(iii) all Taxes which have become or will become due with respect to the period
covered by each such Tax Return have been or will be timely paid in full, (iv)
all withholding Tax requirements imposed on or with respect to the Corporation
have been or will be satisfied in full, and (v) no penalty, interest or other
charge is or will become due with respect to the late filing of any such Tax
Return or late payment of any such Tax.
(b) From January 1, 1993 through the Closing Date, (i) the
Corporation continuously has been and will be an S Corporation within the
meaning of section 1361 of the Code, and (ii) each holder of the Corporation
stock has been an individual resident of the United States or an estate or
trust described in section 1361(c)(2) that is permitted to hold the stock of an
S Corporation.
(c) There is no claim against the Corporation for any Taxes,
and no assessment, deficiency or adjustment has been asserted or proposed with
respect to any Tax Return of or with respect to the Corporation.
(d) There is not in force any extension of time with respect
to the due date for the filing of any Tax Return of or with respect to the
Corporation, or any waiver or agreement for any extension of time for the
assessment or payment of any Tax of or with respect to the Corporation.
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(e) The total amounts set up as liabilities for current and
deferred Taxes in the Balance Sheet are sufficient to cover the payment of all
Taxes, whether or not assessed or disputed, which are, or are hereafter found
to be, or to have been, due by or with respect to the Corporation up to and
through the periods covered thereby.
(f) There are no Tax allocation or sharing agreements
affecting the Corporation.
(g) The Corporation will not be required to include any
amount in income for any taxable period beginning on the Closing Date as a
result of a change in accounting method for any taxable period ending on or
before the Closing Date or pursuant to any agreement with any Tax authority
with respect to any such taxable period.
7.03 TAX COOPERATION: ALLOCATION OF TAXES.
(a) Purchaser and Sellers agree to furnish or cause to be
furnished to each other, upon request, as promptly as practicable, such
information and assistance relating to the Corporation, the non-compete
covenant described in Section 4.01 and the Business as is reasonably necessary
for the filing of all tax returns, and making of any election related to taxes,
the preparation for any audit by any taxing authority, and the prosecution or
defense of any claim, suit or proceeding relating to any tax return. Sellers
and Purchaser shall cooperate with each other in the conduct of any audit or
other proceeding related to taxes involving the Business and each shall execute
and deliver
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such powers of attorney and other documents as are reasonably necessary to
carry out the intent of this Paragraph (a) of Section 7.03.
(b) Any transfer, documentary, sales, use or other taxes
arising in connection with the transactions contemplated by this Agreement and
any recording or filing fees with respect thereto (each, a "Transfer Tax")
shall be the responsibility of Purchaser.
ARTICLE VIII
EMPLOYEE BENEFITS
8.01 EMPLOYEE BENEFITS DEFINITIONS. The following terms, as used
herein, shall have the following meanings:
"Benefit Arrangement" means any employment, consulting,
severance or similar contract, or any other contract, plan, policy or
arrangement (whether or not written) providing for compensation, bonus,
supplemental income, profit-sharing, stock option or other stock related rights
or other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance benefits)
that (i) is not an Employee Plan, (ii) is sponsored, maintained, administered
or contributed to, or has been so sponsored, maintained, administered or
contributed to within six years prior to the Closing Date, as the case may be,
by the Corporation or any ERISA Affiliate and (iii) covers any employee,
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director, consultant or former employee, director or consultant of the
Corporation or any ERISA Affiliate.
"Employee Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA, that (i) is maintained, administered, sponsored or
contributed to, or has been so maintained, administered, sponsored or
contributed to within six years prior to the Closing Date, by the Corporation
or any ERISA Affiliate and (ii) covers an employee or former employee of the
Corporation or any ERISA Affiliate.
"ERISA" means the Employee Retirement Income Security Act or
1974, as amended.
"ERISA Affiliate" means any other entity, trade or business
which, together with the Corporation, would be treated as a single employer
under Section 414 of the Code or Section 4001 of ERISA.
"Multi-Employer Plan" means each Employee Plan that is a
multi-employer plan, as defined in Section 3(37) of ERISA.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Profit Sharing Plan" means the Corporation's Profit-Sharing
Plan and Trust.
"Title IV Plan" means an Employee Plan, other than any
Multi-Employer Plan, subject to Title IV of ERISA.
8.02 EMPLOYEE MATTERS. The Sellers hereby represent and warrant to
Purchaser as of the date hereof and the Closing Date:
(a) Schedule 8.02(a) provides a description of each
Employee Plan and each Benefit Arrangement. True, correct and
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complete copies of each of the Employee Plans and Benefit Arrangements, related
trusts, and all amendments thereto have been furnished to Purchaser. There has
also been furnished to Purchaser, with respect to each Employee Plan required
to file such report and description, the most recent report on Form 5500 and
the summary plan description. No Employee Plan is a Title IV Plan or a
Multi-Employer Plan. No Employee Plan is funded by a trust that is intended to
be exempt from federal income taxation pursuant to Section 501(c)(9) of the
Code. The Profit Sharing Plan is the only Employee Plan that is intended to
be qualified under Section 401(a) of the Code.
(b) Except as otherwise set forth on Schedule 8.02(b):
(i) The Corporation and the ERISA Affiliates have
substantially performed all obligations,
whether arising by operation of law or by
contract, required to be performed by them in
connection with the Employee Plans and the
Benefit Arrangements, and there have been no
defaults or violations by any other party to
the Employee Plans or Benefit Arrangements;
(ii) Each Employee Plan and each Benefit
Arrangement has been administered and
operated in substantial compliance with its
governing documents and applicable law
(including, where applicable, ERISA and the
Code);
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(iii) The Profit Sharing Plan satisfies the
requirements of Section 401 of the Code and
has received a favorable determination letter
from the Internal Revenue Service regarding
such qualified status and has not, since
receipt of the most recent favorable
determination letter, been amended or
operated in a way which would adversely
affect such qualified status;
(iv) There are no actions, suits or claims pending
(other than routine claims for benefits) or
threatened against, or with respect to, any
of the Employee Plans or Benefit Arrangements
or their assets, and there is no matter
pending (other than routine qualification
determinations filings) with respect to any
of the Employee Plans or Benefit Arrangements
before any governmental agency or authority;
(v) All contributions required to be made to the
Employee Plans and Benefit Arrangements
pursuant to their terms and provisions have
been made timely;
(vi) There has been no termination or partial
termination of the Profit Sharing Plan within
the meaning of Section 411(d)(3) of the Code;
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(vii) No act, omission or transaction has occurred
which would result in imposition on the
Corporation or any ERISA Affiliate of (A)
breach of fiduciary duty liability damages
under Section 409 of ERISA, (B) a civil
penalty assessed pursuant to subsections (c),
(i) or (1) of Section 502 of ERISA or (C) a
tax imposed pursuant to Chapter 43 of
Subtitle D of the Code;
(viii) The execution and delivery of this Agreement
and the consummation of the transactions
contemplated hereby will not (A) require the
Corporation or any ERISA Affiliate to make a
larger contribution to, or pay greater
benefits under, any Employee Plan or Benefit
Arrangement than it otherwise would or (B)
create or give rise to any additional vested
rights or service credits under any Employee
Plan or Benefit Arrangement.
(c) Except as otherwise set forth in Schedule 8.02(c),
neither the Corporation nor any ERISA Affiliate is a party to any agreement,
nor has the Corporation or any ERISA Affiliate established any policy or
practice, requiring it to make a payment or provide any other form of
compensation or benefit to any person performing services for such entity upon
termination of such services which would not be payable or provided in the
absence of
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the consummation of the transactions contemplated by this Agreement.
(d) In connection with the consummation of the
transactions contemplated by this Agreement, no payments have or will be made
hereunder or under the Employee Plans or Benefit Arrangements which, in the
aggregate, would result in imposition of the sanctions imposed under Sections
280G and 4999 of the Code.
(e) Each Employee Plan and Benefit Arrangement may be
unilaterally amended or terminated in its entirety without liability except as
to benefits accrued thereunder prior to such amendment or termination.
(f) Schedule 8.02(f) sets forth the name and annual
compensation of each employee employed by the Corporation or an ERISA Affiliate
as of the date of this Agreement, and none of said employees are subject to
union or collective bargaining agreements with the Corporation or an ERISA
Affiliate. Except as otherwise set forth in Schedule 8.02(f), neither the
Corporation nor any ERISA Affiliate has at any time within five years preceding
the date of this Agreement had or been threatened with any work stoppages or
other labor disputes or controversies with respect to its employees.
(g) Except for the individuals identified on Schedule
8.02(g), no individual is receiving continuation coverage under any Employee
Plan or Benefit Arrangement pursuant to the continuation of coverage provisions
contained in Section 4980B of the Code, Sections 601 through 608 of ERISA, or
applicable state laws.
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8.03 EMPLOYEE BENEFIT PLANS AND BENEFIT ARRANGEMENTS.
(a) Prior to the Closing, Sellers shall, at their sole
expense and with no adverse tax or other consequences to the Corporation or
Purchaser, cause all Employee Plans (other than the Profit Sharing Plan) and
Benefit Arrangements to be terminated effective as of the day prior to the
Closing Date. Each Employee Plan that is an employee welfare benefit plan
(within the meaning of Section 3(1) of ERISA) shall be liable for any and all
claims for benefits by any individual for covered expenses incurred, or
attributable to events that occurred, prior to the Closing Date. At or prior
to the Closing, but effective as of the Closing Date, Sellers shall, at their
sole expense and with no adverse tax or other consequences to the Corporation
or Purchaser, (i) cause the Corporation to cease to be the sponsor and an
adopting employer under the Profit Sharing Plan and (ii) cause one or more
designees of Sellers (other than the Corporation) to assume sponsorship of the
Profit Sharing Plan. Effective as of the Closing Date, Purchaser shall cause
each employee of the Corporation on such date to be provided with benefits on a
basis substantially similar to Purchaser's normal practice, but only to the
extent that each such employee is eligible for coverage and benefits under the
terms of Purchaser's benefit plans. Notwithstanding the preceding provisions
of this Section 8.03(a), but subject to the provisions of Section 8.03(b) with
respect to claims and liabilities relating to covered expenses incurred, or
attributable to events that occurred, prior to the Closing Date, Purchaser may
elect, by notice
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to Sellers prior to the Closing Date, to have the Corporation continue its
group health plan after the Closing Date (for such period as Purchaser shall
determine in its sole discretion), and, if Purchaser makes such election, then
such plan shall not be terminated on or prior to the Closing Date.
(b) Sellers shall assume and be liable for all past,
present and future obligations and liabilities of the Corporation and any ERISA
Affiliate arising out of any law or contract (i) with respect to each Employee
Plan and Benefit Arrangement and (ii) with respect to all employees and former
employees of the Corporation or any ERISA Affiliate in connection with any
event commencing, occurring or failing to occur on or prior to the Closing
Date. Sellers agree to indemnify Purchaser and its affiliates, directors,
officers and employees with respect to any loss, liability, assessment,
withdrawal liability assessment, funding deficiency assessment, taxes,
interest, penalties, judgments, employee benefit claims and PBGC liability
assessments (including any and all costs and fees related to proceedings
establishing such loss, liability, assessment, withdrawal liability assessment,
funding deficiency assessment, taxes, interest, penalties, judgments, employee
benefit claims or PBGC liability assessment) arising out of any law or
contract, with respect to (i) each Employee Plan and Benefit Arrangement and
(ii) each employee or former employee of the Corporation or any ERISA
Affiliate. The indemnity provided in this Section 8.03(b) shall survive this
Agreement and shall be in addition to any other indemnities provided in this
Agreement, and
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shall not be subject to any restrictions imposed in this Agreement upon any
such other indemnities.
8.04 NO THIRD PARTY BENEFICIARIES. No provision of this Article
shall create any third party beneficiary or other rights in any employee or
former employee (including any beneficiary or dependent thereof) of the
Corporation in respect of continued employment (or resumed employment) with
either the Corporation or Purchaser and no provision of this Article shall
create any such rights in any such persons in respect of any benefits that may
be provided, directly or indirectly, under any Employee Plan or Benefit
Arrangement or any plan or arrangement which may be maintained or established
by the Corporation or Purchaser on or after the Closing Date. No provision of
this Agreement shall constitute a limitation on rights to amend, modify or
terminate after the Closing Date any such plans or arrangements of the
Corporation or Purchaser.
ARTICLE IX
CONDITIONS TO CLOSING
9.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations
of Purchaser and Sellers to consummate the Closing are subject to the
satisfaction, or waiver by both parties, of the following conditions:
(a) No provision of any applicable law or regulation and
no judgment, injunction, order or decree shall (i) prohibit the consummation of
the Closing or (ii) restrain, prohibit or otherwise
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interfere with the effective operation or enjoyment by Purchaser of the Shares.
(b) All actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit the
consummation of the Closing, and all material third party consents necessary in
connection with the consummation of the Closing, shall have been obtained and
the applicable waiting period after the filing pursuant to 15 U.S.C. Section
18a has expired without intervention by the United States to prevent
consummation of these transactions.
(c) All waivers of applicable rights of first refusal by
the Corporation and the Sellers have been obtained to permit consummation of
the transactions contemplated herein.
9.02 CONDITIONS AND OBLIGATIONS OF PURCHASER. The obligation of
Purchaser to consummate the Closing is subject to the satisfaction of the
following further conditions:
(a) (i) Sellers shall have performed in all material
respects all of its obligations hereunder required to be performed by them at
or prior to the Closing Date, (ii) the representations and warranties of
Sellers contained in this Agreement and in any certificate or other writing
delivered by Sellers pursuant thereto, disregarding all qualifications and
exceptions contained therein relating to materiality, shall be true at and as
of the Closing Date as if made as of that date, and (iii) Purchaser shall have
received a certificate signed by the President of the Corporation to the
foregoing effect.
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(b) No proceeding challenging this Agreement or the
transactions contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any person before
any court, arbitrator or governmental body, agency or official nor shall they
be pending.
(c) Purchaser shall have received all documents it may
reasonably request relating to the existence of and good standing of the
Corporation.
(d) There shall have not occurred any events or
developments, individually or in the aggregate, resulting in a Material Adverse
Effect with respect to the Corporation.
(e) The Sellers shall have delivered to Purchaser a
certificate to the effect that each of the conditions specified above in
Section 9.02 is satisfied in all respects.
(f) All applicable waiting periods (and any extensions
thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or otherwise been
terminated.
(g) Purchaser shall have received the opinion of Messrs.
Jones, Walker, Waechter, Poitevent, Carrere & ▇▇▇▇▇▇▇, L.L.P., dated as of the
Closing Date, in substantially the form attached hereto as Schedule 9.02(g).
(h) Sellers shall have sold the 464 shares of common
stock to the Corporation as set forth in Section 1.01(a).
9.03 CONDITIONS TO OBLIGATIONS OF SELLERS. The obligation of
Sellers to consummate the Closing is subject to the satisfaction of the
following further conditions:
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(a) (i) Purchaser shall have performed in all
material respects all of its obligations hereunder required to be performed by
it at or prior to the Closing Date and (ii) the representations and warranties
of Purchaser contained in this Agreement and in any certificate or other
writing delivered by Purchaser pursuant hereto shall be true in all material
respects at and as of the Closing Date, as if made at and as of such date.
(b) Sellers shall have received all documents they may
reasonably request relating to the existence of Purchaser and the authority of
Purchaser to execute and consummate this Agreement, all in form and substance
reasonably satisfactory to Seller.
(c) The transaction contemplated herein and its
consummation has been approved by all necessary corporate action on behalf of
Purchaser.
(d) Purchaser shall have delivered a certificate to the
effect that each of the conditions specified in this Section 9.03 is satisfied
in all respects.
(e) Sellers shall have received the opinion of Messrs.
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P. dated as of the Closing Date in substantially the form
attached hereto as Schedule 9.02(e).
ARTICLE X
SURVIVAL; INDEMNIFICATION
10.01 SURVIVAL. The representations and warranties of the parties
hereto contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the Closing
and shall expire on the first anniversary
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of the Closing, except that those contained in Articles VII and VIII shall
expire on the fourth anniversary of the Closing.
10.02 INDEMNIFICATION.
(a) Sellers hereby indemnify Purchaser and all of
Purchaser's officers, directors, employees and shareholders (hereinafter
"Indemnified Parties") against and agree to defend and hold them harmless from
and against any and all damage, loss, liability and expense, including, without
limitation, penalties, interest, reasonable expenses of investigation and
reasonable attorneys' fees and expenses in connection with any action, suit or
proceeding (collectively, "Loss") incurred or suffered by any of the
Indemnified Parties arising out of any breach of any representation or
warranty, covenant or agreement made or to be performed by Sellers pursuant to
this Agreement; provided, however, Sellers' total aggregate liability under
this indemnity shall be limited to Ten Million and no/100 ($10,000,000.00)
Dollars, except that the aggregate liability for the breach of all
representations, warranties, covenants and agreements other than those
contained in Articles VII and VIII shall be Four Million and No/100
($4,000,000.00) Dollars, in each case inclusive of all legal fees and costs of
defense incurred by Sellers in performing their obligations hereunder and
Sellers shall have no obligation to indemnify any Indemnified Party with
respect to any Loss, claim, demand, suit or action allegedly arising out of any
misrepresentation or breach of warranty, covenant or agreement notice of which
is given to Sellers after the first anniversary of
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the Closing, as to all representations, warranties and covenants other than
those contained in Articles VII and VIII, and after the fourth anniversary of
the Closing, as to all representations, warranties and covenants contained in
Articles VII and VIII. The defense of all such claims and actions shall be
undertaken by Sellers using counsel selected by them and reasonably acceptable
to Purchaser. Settlements of each such claim shall require the approval of
both Sellers and Purchaser, which approval shall not be unreasonably withheld.
The remedies set forth in this Section 10.02(a) shall be the exclusive remedies
of the Indemnified Parties.
(b) Purchaser hereby agrees to defend and indemnify
Sellers against and to hold Sellers harmless from any and all Loss incurred or
suffered by Sellers arising out of any failure to perform, misrepresentation or
breach of any warranty, covenant or agreement made or to be performed by
Purchaser pursuant to this Agreement. Purchaser shall have no obligation with
respect to any loss, claim, demand, suit or action against Sellers notice of
which is given to Purchaser (by Sellers or any other person or governmental
agency) after the first anniversary of the Closing as to all losses, etc. other
than those which arise from matters described in Section 5.03 and after
December 31, 2005 as to all losses, etc. which arise from matters described in
Section 5.03.
ARTICLE XI
TERMINATION
11.01 GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing:
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(i) by mutual written agreement of Sellers and
Purchaser;
(ii) By Sellers or Purchaser if the Closing shall
not have been consummated on or before
November 30, 1996 unless extended by mutual
agreement of Sellers and Purchaser;
(iii) By either Sellers or Purchaser if there shall
be any law or regulation that makes the
consummation of the transactions contemplated
hereby illegal or otherwise prohibited or if
consummation of the transactions contemplated
hereby would violate any nonappealable final
order, decree or judgment of any court or
governmental body having competent
jurisdiction.
The party desiring to terminate this Agreement pursuant to Clauses
(ii) or (iii) shall give notice of such termination to the other party.
11.02 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 11.01, such termination shall be without liability of any
party (or of any shareholder, director, officer, employee, agent, consultant or
representative of any party) to another party to this Agreement; provided that
if such termination shall result from the willful failure of any party to
fulfill a condition to the performance of the obligations of another party or
to perform a covenant of this Agreement or from a willful breach by
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any party to this Agreement, such party shall be fully liable for any and all
Losses incurred or suffered by the parties as a result of such failure or
breach. The provisions of Sections 5.01 and 12.03 shall survive any
termination hereof pursuant to Section 11.01.
ARTICLE XII
MISCELLANEOUS
12.01 NOTICES. All notices, requests and other communications to
either party hereunder shall be in writing (including facsimile, telecopy or
similar writing) and shall be deemed given when delivered:
IF TO PURCHASER, TO: ▇▇▇▇▇▇ Drilling Company
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
▇▇▇▇▇▇ Building
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO: T. ▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
2300 First City Tower
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
IF TO SELLERS, TO: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o ▇▇▇▇▇▇ N, White
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Four United Plaza, 5th Floor
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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Each of the above persons may change their address or facsimile number by
notice to the other persons in the manner set forth above.
12.02 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Purchaser and Seller, or in the case of a waiver,
by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the existence of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
12.03 EXPENSES. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
12.04 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided that neither party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of the other party hereto. Neither this
Agreement nor any provision
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hereof is intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
12.05 GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of Louisiana without
regard to the conflicts of law rules of such state, except that the provisions
of Section 4.01 shall be governed by the laws of the States of Texas,
Mississippi, Alabama, California and Florida as they pertain to competition by
the Sellers with the Corporation in those states.
12.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received as a counterpart hereof signed by the other party hereto.
12.07 ENTIRE AGREEMENT. This Agreement and any other agreements
referred to herein constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings and negotiations, both written and oral, between the parties
with respect thereto. No representation, inducement, promise, understanding,
condition or warranty not set forth herein has been made or relied upon by
either party hereto.
12.08 CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
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12.09 SEVERABILITY. In the event any one or more of the provisions
of this Agreement shall be or become illegal or unenforceable in any respect,
the validity, legality, operation and enforceability of the remaining
provisions of this Agreement shall not be affected thereby.
12.10 CERTAIN DEFINITIONS. "Environmental Law or Laws" shall mean
any and all laws, statutes, ordinances, rules, regulations, or orders of any
governmental authority pertaining to health or the environment currently in
effect and applicable to a specified person and its subsidiaries, including the
Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Hazardous & Solid Waste Amendments Act
of 1984, as amended, the Superfund Amendments and Reauthorization Act of 1986,
as amended, the Hazardous Materials Transportation Act, as amended, the Oil
Pollution Act of 1990, as amended, any state or local Laws implementing the
foregoing federal laws, and any state laws pertaining to the handling of oil
and gas exploration and production wastes or the use, maintenance, and closure
of pits and impoundments, and all other environmental conservation or
protection laws. For purposes of the Agreement, the terms "hazardous
substance" and "release" have the meanings specified in
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CERCLA; provided, however, that to the extent the laws of the state or locality
in which the property is located establish a meaning for "hazardous substance"
or "release" that is broader than that specified in either CERCLA, such broader
meaning shall apply, and the term "hazardous substance" shall include all
dehydration and treating wastes, waste (or spilled) oil, and waste (or spilled)
petroleum products, and (to the extent in excess of background levels)
radioactive material, even if such are specifically exempt from classification
as hazardous substances pursuant to CERCLA or RCRA or the analogous statutes of
any jurisdiction applicable to the specified person or its subsidiaries or any
of their respective properties or assets.
"Material Adverse Effect" with respect to any person shall mean any
change or effect (or any development that, insofar as can reasonably be
foreseen, is likely to result in any change or effect) that is materially
adverse to the business, properties, assets, condition (financial or otherwise)
or results of operations of that person and its subsidiaries, taken as a whole
and without limiting the foregoing, such term shall in any case mean an effect
or change that adversely affects or impairs the value, ownership or operation
of any asset by, or creates a liability for, an amount greater than $500,000 in
excess of the Company's insurance coverage (if any) therefor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers effective as of the
day and year first above written but executed on the dates set forth below.
WITNESSES: ▇▇▇▇▇▇ DRILLING COMPANY, PURCHASER
BY:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, CHAIRMAN
DATE EXECUTED: , 1996
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SELLERS:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DATE EXECUTED: , 1996
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DATE EXECUTED: , 1996
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▇▇▇▇▇ ▇. ▇▇▇▇▇
DATE EXECUTED: , 1996
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QUAIL TOOLS, INC.
BY:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
DATE EXECUTED: , 1996
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