1
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
NDE ENVIRONMENTAL CORPORATION
AND
TANKNOLOGY ENVIRONMENTAL, INC.
DATED AS OF
OCTOBER 7, 1996
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EXHIBIT 2.1
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.1 The Sale . . . . . . . . . . . . . . . . . . . . 6
Section 2.2 Purchase Price . . . . . . . . . . . . . . . . . 6
Section 2.3 Post Closing Adjustment . . . . . . . . . . . . 6
Section 2.4 Transactions Prior to Closing . . . . . . . . . 8
ARTICLE III CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . 9
Section 4.1 Organization and Good Standing of the Company. . 9
Section 4.2 Corporate Records. . . . . . . . . . . . . . . . 9
Section 4.3 Authorization. . . . . . . . . . . . . . . . . . 10
Section 4.4 Non-Contravention. . . . . . . . . . . . . . . . 10
Section 4.5 Validity . . . . . . . . . . . . . . . . . . . . 11
Section 4.6 Broker Involvement . . . . . . . . . . . . . . . 11
Section 4.7 Litigation . . . . . . . . . . . . . . . . . . . 11
Section 4.8 Title to Shares. . . . . . . . . . . . . . . . . 11
Section 4.9 Continuity Prior to Closing Date . . . . . . . . 12
Section 4.10 Contracts and Commitments. . . . . . . . . . . . 13
Section 4.11 Taxes. . . . . . . . . . . . . . . . . . . . . . 14
Section 4.12 Title to Properties. . . . . . . . . . . . . . . 16
Section 4.13 Trademarks, Trade Names and Intellectual
Property . . . . . . . . . . . . . . . . . . . . 16
Section 4.14 Financial Records; Budget. . . . . . . . . . . . 17
Section 4.15 Condition of Assets and Inventory. . . . . . . . 17
Section 4.16 Liabilities. . . . . . . . . . . . . . . . . . . 18
Section 4.17 Employees and Related Matters. . . . . . . . . . 18
Section 4.18 No Material Change . . . . . . . . . . . . . . . 19
Section 4.19 Compliance With Law. . . . . . . . . . . . . . . 19
Section 4.20 Tangible Personal Property . . . . . . . . . . . 19
Section 4.21 Insurance. . . . . . . . . . . . . . . . . . . . 19
Section 4.22 Government Licenses, Permits and Related
Approvals . . . . . . . . . . . . . . . . . . . 20
Section 4.23 Distributed Products . . . . . . . . . . . . . . 20
Section 4.24 Safety Reports . . . . . . . . . . . . . . . . . 20
Section 4.25 Transactions with Certain Persons. . . . . . . . 20
Section 4.26 Accounts Receivable. . . . . . . . . . . . . . . 21
Section 4.27 Studies, Etc.. . . . . . . . . . . . . . . . . . 21
Section 4.28 Disclosure . . . . . . . . . . . . . . . . . . . 21
Section 4.29 Employee Benefits. . . . . . . . . . . . . . . . 22
Section 4.30 Environmental Matters. . . . . . . . . . . . . . 25
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . 26
Section 5.1 Corporate Status and Good Standing . . . . . . 26
Section 5.2 Authorization . . . . . . . . . . . . . . . . . 27
Section 5.3 Non-Contravention . . . . . . . . . . . . . . . 27
Section 5.4 Validity . . . . . . . . . . . . . . . . . . . 28
Section 5.5 Broker Involvement . . . . . . . . . . . . . . 28
Section 5.6 Litigation . . . . . . . . . . . . . . . . . . 28
Section 5.7 Investment Intention . . . . . . . . . . . . . 28
Section 5.8 Disclosure of Information . . . . . . . . . . . 28
Section 5.9 Financial Condition. . . . . . . . . . . . . . 29
Section 5.10 Restricted Securities . . . . . . . . . . . . . 29
ARTICLE VI ADDITIONAL AGREEMENTS AND COVENANTS . . . . . . . . . . . . . 30
Section 6.1 Other Offers . . . . . . . . . . . . . . . . . 30
Section 6.2 Conduct of the Business Pending the Closing. . . 30
Section 6.3 Public Announcements . . . . . . . . . . . . . 33
Section 6.4 Further Assurances . . . . . . . . . . . . . . 33
Section 6.5 Covenant Against Competition . . . . . . . . . 33
Section 6.6 Governmental Filings . . . . . . . . . . . . . 34
Section 6.7 Access to Information . . . . . . . . . . . . . 35
Section 6.8 Use of Name . . . . . . . . . . . . . . . . . . 35
Section 6.9 Other Action . . . . . . . . . . . . . . . . . 35
Section 6.10 Employee Benefit Matters . . . . . . . . . . . 36
Section 6.11 Cooperation with Financings and Financial . . .
Reporting . . . . . . . . . . . . . . . . . . . 36
Section 6.12 Consents . . . . . . . . . . . . . . . . . . . 36
Section 6.13 Tax Certificate . . . . . . . . . . . . . . . . 36
Section 6.14 Certain Tax Elections . . . . . . . . . . . . . 37
Section 6.15 Liability for Taxes . . . . . . . . . . . . . . 38
Section 6.16 Cooperation and Exchange of Information . . . . 41
Section 6.17 Conflict . . . . . . . . . . . . . . . . . . . 42
Section 6.18 Insurance . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII EXTENT AND SURVIVAL OF REPRESENTATIONS,WARRANTIES, COVENANTS AND
AGREEMENTS; INDEMNIFICATION . . . . . . . . . . . . . . . . . 43
Section 7.1 Indemnification of Buyer . . . . . . . . . . . 43
Section 7.2 Survival; Threshold and Limits of Liability. . . 44
Section 7.3 Indemnification Procedures . . . . . . . . . . 45
Section 7.4 Arbitration of Disputes . . . . . . . . . . . . 48
Section 7.5 General . . . . . . . . . . . . . . . . . . . . 48
Section 7.6 Security . . . . . . . . . . . . . . . . . . . 49
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ARTICLE VIII CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . 49
Section 8.1 Conditions Precedent to Obligations of Buyer . . 49
Section 8.2 Conditions Precedent to Obligations of the
Seller . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE IX ACTIONS TO BE TAKEN AT CLOSING . . . . . . . . . . . . . . . . 52
Section 9.1 Actions to be Taken by Seller at the Closing . . 52
Section 9.2 Actions to be Taken by Buyer at the Closing. . . 52
ARTICLE X GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 53
Section 10.1 Termination . . . . . . . . . . . . . . . . . . 53
Section 10.2 Confidentiality; Publicity; Books and
Records . . . . . . . . . . . . . . . . . . . . 54
Section 10.3 Expenses . . . . . . . . . . . . . . . . . . . . 56
Section 10.4 Entire Agreement . . . . . . . . . . . . . . . 56
Section 10.5 Waivers and Consents . . . . . . . . . . . . . 56
Section 10.6 Notices . . . . . . . . . . . . . . . . . . . . 57
Section 10.7 Successors and Assigns . . . . . . . . . . . . 57
Section 10.8 Performance . . . . . . . . . . . . . . . . . . 58
Section 10.9 Choice of Law; Section Headings; Table of
Contents . . . . . . . . . . . . . . . . . . . 58
Section 10.10 Counterparts . . . . . . . . . . . . . . . . . 58
Section 10.11 Jurisdiction and Venue . . . . . . . . . . . . 58
Section 10.12 Severability . . . . . . . . . . . . . . . . . 58
Section 10.13 Assignment . . . . . . . . . . . . . . . . . . 58
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SCHEDULES
Schedule 2.4(d)(iv) Assumed Employees
Schedule 4.1 Foreign Qualifications
Schedule 4.4 Seller Non-Contravention
Schedule 4.7 Seller Litigation
Schedule 4.8 Capitalization
Schedule 4.9 Absence of Certain Changes
Schedule 4.10 Contracts and Commitments
Schedule 4.11 Taxes
Schedule 4.12 Title to Properties
Schedule 4.13 Trademarks, Trade Names and Intellectual Property
Schedule 4.14(A) August 31 Financial Statements
Schedule 4.14(B) Intercompany Transactions between August 31, 1996 and Closing
Schedule 4.16 Liabilities
Schedule 4.20 Tangible Personal Property
Schedule 4.21 Insurance Policies
Schedule 4.23 Distributed Products
Schedule 4.25 Transactions with Certain Persons
Schedule 4.29 Employee Benefit Plans
Schedule 4.30 Environmental Matters
Schedule 5.3 Buyer Non-Contravention
Schedule 5.6 Buyer Litigation
Schedule 6.2 Changes to Employee Benefits
Schedule 6.18 Insurance
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
October 7, 1996, between NDE Environmental Corporation, a Delaware corporation
("Buyer"), and Tanknology Environmental, Inc., a Texas corporation ("Seller"),
W I T N E S S E T H:
WHEREAS, Seller owns all of the outstanding capital stock (the
"Shares") of (i) Tanknology Corporation International ("Tanknology") including
its cathodic protection division d/b/a Tanknology Cathodic Protection, a
Delaware corporation with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, (ii) USTMAN Industries, Inc. ("USTMAN"), a Delaware
corporation with its principal place of business at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇.,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and (iii) Tanknology Canada (1988), Inc. ("Tanknology
Canada"), a Canadian corporation with its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (each of Tanknology,
USTMAN and Tanknology Canada a "Subsidiary" and all three collectively the
"Subsidiaries"); and
WHEREAS, Buyer desires to acquire the Shares from Seller, and
Seller desires to sell the Shares to Buyer, upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants, agreements and conditions
contained herein, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
The terms set forth below in this Article I shall have the
meanings ascribed to them below:
Affiliate: with respect to any person, means any person that
directly or indirectly controls, is controlled by or is under common control
with such person.
Applicable Law: means any and all federal, national, state,
regional, local, municipal or foreign laws, statutes, rules, regulations,
guidelines, ordinances, licenses, Permits or judicial or administrative
decisions of any country, or any political subdivision, agency, commission,
official or court thereof having jurisdiction over the Seller or any
Subsidiary.
August 31 Financial Statements shall mean the Tanknology UST
Group Combined Balance Sheet, the Tanknology Corporation International Balance
Sheet, the Tanknology Canada Balance Sheet, the Cathodic Protection Balance
Sheet and the USTMAN Industries Balance Sheet, each dated as of August 31, 1996
and each attached hereto in Schedule 4.14(A).
best efforts: means a party's efforts in accordance with
reasonable commercial practice and without the incurrence of unreasonable
expense.
Business: means all of the business and operations conducted by
a Subsidiary, taken as a whole.
Code: means the United States Internal Revenue Code of 1986, as
amended, or any amending or superseding Tax laws of the United States.
Effective Date: means August 31, 1996.
Environmental Law: means any applicable law (including common
law) regulating or prohibiting Releases into any part of the workplace or the
environment, or pertaining to the
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protection or improvement of natural resources or wildlife, the environment or
public and employee health and safety including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA") (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33
U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. Section 7401 et seq.), the
Atomic Energy Act of 1954 (42 U.S.C. Section 2014 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) ("OSHA") and
the regulations promulgated pursuant thereto, and any such applicable state or
local statutes, and the regulations promulgated pursuant thereto, as such laws
have been and may be amended or supplemented.
Excluded Assets: shall mean (a) all cash of the Subsidiaries
reflected on the August 31 Financial Statements, (b) the real property located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, (c) certain personal property
belonging to the Subsidiaries located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, and (d) amounts owed to Subsidiaries by other Affiliates of the Seller,
including the accounts reflected under the item "Investment in Subsidiaries" on
the August 31 Financial Statements.
Forms 8023-A: means IRS Form 8023-A (including the required
schedules thereto) and any other form required to be filed with any
jurisdiction so that such jurisdiction will recognize the Section 338(h)(10)
Election.
Hazardous Material: means any substance, material or waste which
is regulated pursuant to any Environmental Law by any public or governmental
authority in any jurisdiction in which the Seller or any Subsidiary conducts
business, or the United States, including, without
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limitation, any material or substance which is defined as a "hazardous waste,"
"hazardous material," "hazardous substance," "extremely hazardous waste,"
"restricted hazardous waste," "contaminant," "toxic waste," "toxic substance,"
"source material," "special nuclear material," "byproduct material," "high-
level radioactive waste," "low-level radioactive waste" or "spent nuclear
material" under any provision of Environmental Law.
IRS: means the United States Internal Revenue Service.
Lien: means any lien, pledge, claim, charge, security interest,
mortgage or other encumbrance, option or other rights of any third person of
any nature whatsoever.
Permit: means any and all federal, national, state, regional,
local, municipal or foreign licenses, permits, variances, waivers, riders,
registrations or any other governmental authorizations or approvals necessary
or appropriate for any Subsidiary to conduct its Business.
person: means any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, government or agency or subdivision thereof or any other entity.
Paid Reimbursable Taxes: shall have the meaning set forth at
Section 6.15(e).
Post-Closing Period: shall have the meaning set forth at Section
6.15(b).
Pre-Closing Period: shall have the meaning set forth at Section
6.15(b).
Regulation: means a United States Department of Treasury
regulation issued with respect to the Code.
Release: means any release, spill, effluent, emission, leaking,
pumping, pouring, emptying, escaping, dumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any property currently or formerly owned,
operated or leased by the Seller or any Subsidiary.
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Remedial Action: means all actions, including, without
limitation, any capital expenditures, required by a governmental entity or
required under any Environmental Law, or voluntarily undertaken to (a) clean
up, remove, treat, or in any other way ameliorate or address any Hazardous
Materials or other substance in the indoor or outdoor environment; (b) prevent
the Release or threat of Release, or minimize the further Release of any
Hazardous Material so it does not endanger or threaten to endanger the public
or employee health or welfare of the indoor or outdoor environment; (c) perform
pre-remedial studies and investigations or post-remedial monitoring and care
pertaining or relating to a Release; or (d) bring the applicable party into
compliance with any Environmental Law.
Section 338(h)(10) Election: shall have the meaning set forth at
Section 6.14.
Straddle Period: shall have the meaning set forth at Section
6.15(a).
Taxes: means all United States federal, state, county and local,
all foreign and all other taxes, charges, fees, levies or other assessments,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, profit share, license,
lease, service, service use, value added, withholding, payroll, employment,
excise, estimated, severance, stamp, occupation, premium, real and personal
property, windfall profits, gains, capital stock, production, business and
occupation, disability, custom duties or other taxes of any kind whatsoever,
together with any interest, penalties, additions to tax, fines or other
additional amounts imposed thereon or related thereto, and the term "Tax" means
any one of the foregoing Taxes.
Tax Certificate: shall have the meaning set forth at Section
6.13.
Tax Returns: means all United States federal, local and state
and all foreign returns, declarations, reports, estimates, information returns,
statements and other documents of, relating to, or required to be filed in
respect of, any and all Taxes.
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ARTICLE II
PURCHASE AND SALE
Section 2.1 The Sale. Upon the terms and subject to the
conditions of this Agreement, at the Closing, as defined below under Article
III, Seller will sell, assign, transfer and deliver to Buyer, the Shares
(together with a stock power or powers executed in blank), and Buyer will
purchase and acquire the Shares.
Section 2.2 Purchase Price. The purchase price for all the
Shares (the "Purchase Price") shall be $12,000,000. The Purchase Price shall
be subject to adjustment pursuant to Section 2.3 only. The Purchase Price
shall be paid at Closing by wire transfer of $12,000,000 in immediately
available funds to an account or accounts designated in writing by Seller at
least two business days prior to the Closing.
Section 2.3 Post Closing Adjustment.
(a) Within 90 calendar days following the Closing, Buyer shall
prepare and deliver to Seller a combined balance sheet (the "Balance
Sheet") of the Subsidiaries as of the Closing Date, as defined below
under Article III (prior to the effects of the transactions occurring at
the Closing) and a statement (the "Statement"), reflecting the
calculation of the adjustment, if any, to the Purchase Price pursuant to
Section 2.3(b). The Balance Sheet shall be prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
in the United States and the financial reporting policies and procedures
utilized by Seller prior to the Closing. Seller shall have a period of
30 calendar days after delivery of the Balance Sheet and the Statement
to review such documents and make any objections it may have in writing
to Buyer. If written objections are delivered to Buyer by Seller within
such 30-day period, then Buyer and Seller shall attempt to resolve the
matter
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or matters in dispute. If no written objections are made by Seller
within such 30-day period, then the Balance Sheet and the Statement
shall be final and binding on the parties hereto. If disputes with
respect to the Balance Sheet or the Statement cannot be resolved by
Buyer and Seller within 30 calendar days after the delivery of the
objections thereto, then, at the request of Buyer or Seller, the
specific matters in dispute shall be submitted to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co.
(the "Auditors") or such other independent accounting firm as may be
approved by Seller and Buyer, which firm shall render its opinion as to
such matters. Based on such opinion, such independent accounting firm
will then send to Seller and Buyer its determination of the specified
matters in dispute, which determination shall be final and binding on
the parties hereto. The fees and expenses of the Auditors shall be
borne one-half by Seller and one-half by Buyer.
(b) The Purchase Price shall be adjusted (i) upward for the
implied interest on $12,000,000 for the period August 31, 1996 through
the Closing Date at an annual rate of 8%, (ii) downward for any
withdrawals of current assets by the Seller or an Affiliate or the
incurrence of any liabilities on behalf of or to the Seller or an
Affiliate other than the transactions provided for in Section 2.4, and
(iii) downward for (A) a decrease in value of total non-current assets,
adjusted for noncurrent Excluded Assets and normal depreciation and
amortization, unless such decrease in non-current assets is covered by
insurance proceeds of comparable amount and (B) an increase in any
liability or in the total liabilities, all as reflected in the August 31
Financial Statements except any such increase offset by a comparable
increase in assets, except any decrease or increase contemplated in this
Section 2.3(b)(iii) due to operations in the normal course of business.
If the aggregate Adjustment is upward, then within five days following
the final determination thereof, Buyer shall pay
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Seller by wire transfer in immediately available funds to the account or
accounts designated by Seller the amount by which the Purchase Price is
adjusted upward. If the aggregate adjustment is downward, then within
five days following the final determination thereof, Seller shall pay
Buyer by wire transfer in immediately available funds to the account or
accounts designated by Buyer the amount by which the Purchase Price is
adjusted downward.
Section 2.4 Transactions Prior to Closing.
(a) Prior to the Closing, the deeds covering the real property
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and certain
personal property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
shall be assigned by Tanknology to the Seller.
(b) At or prior to Closing, cash of the Subsidiaries in the
amount of $793,000 as reflected on the August 31 Financial Statements
shall be withdrawn by the Seller.
(c) Prior to Closing, the Seller shall eliminate or cause its
Affiliates to eliminate all intercompany account balances, including the
accounts reflected on each of the August 31 Financial Statements under
the item "Investment in Subsidiaries."
(d) At or prior to Closing, Seller shall execute assumption
agreements reasonably acceptable to Buyer assuming from the Subsidiaries
(i) any and all income Taxes for the period through the Closing Date,
(ii) any and all claims, losses or liabilities arising from or relating
to the real property and improvements and certain personal property
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and the adjacent
lot owned by Seller, (iii) any obligation of the Subsidiaries relating
to ▇. ▇. ▇▇▇▇▇ under that certain consulting agreement between ▇. ▇.
▇▇▇▇▇, Seller and Tanknology dated as of December, 1991, and (iv) any
obligation of the Subsidiaries relating to the employees listed on
Schedule 2.4(d)(iv).
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ARTICLE III
CLOSING
The closing of the transactions contemplated hereby (the
"Closing") shall take place at such time and at such date as are mutually
agreed to by Buyer and Seller at the offices of ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., Houston,
Texas, but in no event later than October 15, 1996. The date on which the
Closing is held is referred to in this Agreement as the "Closing Date."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to Buyer the following:
Section 4.1 Organization and Good Standing of the Company.
Each of the Seller and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has full corporate power and authority to own, operate and
lease its assets in the manner currently owned, operated and leased by it and
to carry on its business as now conducted. The Seller and each Subsidiary is
duly qualified to do business as a foreign corporation in all jurisdictions in
which the nature of its business requires such qualification and where the
failure to do so would have a material adverse effect on the Seller or such
Subsidiary. Schedule 4.1 is a complete list of all jurisdictions in which each
Subsidiary is currently licensed or qualified to transact business as a foreign
entity.
Section 4.2 Corporate Records. Copies of the certificate of
incorporation and by-laws of the Seller and each Subsidiary have been delivered
to Buyer and are complete and correct as of the date hereof. The minute book
and stock book of Seller and each Subsidiary have been exhibited to Buyer and
each is a complete and accurate record of the material corporate actions of
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the stockholders and directors (and any committees thereof) of the corporation
through the date hereof and all issuances, cancellations and transfers of the
capital stock thereof.
Section 4.3 Authorization. Each of the Seller and the
Subsidiaries has full corporate power and authority under its certificate or
articles of incorporation and by-laws, and all necessary corporate action has
been taken to authorize it, to execute and deliver this Agreement and the
exhibits and schedules hereto, to consummate the transactions contemplated
herein and to take all actions required to be taken by it pursuant to the
provisions hereof, and each of this Agreement and the exhibits hereto
constitutes the valid and binding obligation of the Seller and each Subsidiary
enforceable against the Seller and each Subsidiary, as the case may be, in
accordance with its terms, except as such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and general principles of
equity.
Section 4.4 Non-Contravention. Except as set forth in Schedule
4.4, neither the execution and delivery of this Agreement or any documents
executed in connection herewith, nor the consummation of the transactions
contemplated herein or therein, does or will violate, conflict with, result in
breach of or require notice or consent under any Applicable Law, the charter or
by-laws of the Seller or any Subsidiary or any provision of any agreement or
instrument to which the Seller or any Subsidiary is a party or result in the
creation of any Lien upon the capital stock, properties or assets of any
Subsidiary. Except as set forth in Schedule 4.4, no consent, approval,
exemption, authorization or other action of, or notice to or filing with, any
third party, court or administrative or other governmental or regulatory body
is required by Seller or any Subsidiary to execute, deliver or perform this
Agreement and to consummate the transactions contemplated herein and to take
all actions required to be taken by it pursuant to the provisions hereof.
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Section 4.5 Validity. There are no pending or threatened
judicial or administration actions, proceedings or investigations which
question the validity of this Agreement or any action taken or contemplated by
the Seller in connection with this Agreement.
Section 4.6 Broker Involvement. Neither the Seller nor any
Subsidiary thereof has hired, retained or dealt with any broker or finder in
connection with the transactions contemplated by this Agreement other than
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates.
Section 4.7 Litigation. Except as set forth in Schedule 4.7,
there is no investigation, claim or proceeding or litigation of any type
pending or threatened involving the Seller or any Subsidiary or that would have
an adverse effect on the Seller or any Subsidiary or Buyer, and Seller is
unaware after reasonable investigation of any judgment, order, writ, injunction
or decree of any court, government or governmental agency, or arbitral tribunal
against or involving Seller or any Subsidiary or that would have an adverse
effect on Seller or any Subsidiary or Buyer.
Section 4.8 Title to Shares. The capitalization of the
Subsidiaries is set forth in Schedule 4.8 hereto. All of the outstanding
Shares were duly authorized for issuance and are validly issued, fully paid and
nonassessable and none of such Shares are held in treasury. Seller owns
beneficially and of record the Shares, free and clear of all Liens, and such
Shares are not subject to any agreements or understandings with respect to the
voting or transfer of any of the Shares. There are no outstanding
subscriptions, options, convertible securities, warrants or calls of any kind
issued or granted by, or binding upon, the Seller to purchase or otherwise
acquire or to sell or otherwise dispose of any security of or equity interest
in any Subsidiary. The Seller has the requisite legal right to sell, assign
and transfer the Shares owned by it to Buyer and will, upon delivery of a
certificate or certificates representing such Shares to Buyer pursuant to the
terms hereof, transfer to Buyer title to such Shares, free and clear of any
Liens.
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Section 4.9 Continuity Prior to Closing Date. Except as set
forth in Schedule 4.9, from August 31, 1996 to and including the Closing Date,
the Subsidiaries have not conducted their respective businesses otherwise than
in the usual and customary manner and in the ordinary course of business,
consistent with their historical practice, and there has not been:
(a) any sale, lease, distribution, transfer, mortgage, pledge
or subjection to Lien of assets of a Subsidiary, except sales or
purchases of inventory and obsolete or surplus equipment in the ordinary
and usual course of business;
(b) any material transaction by any Subsidiary not in the
ordinary and usual course of business;
(c) any material damage, destruction or loss to the assets of
any Subsidiary whether or not covered by insurance;
(d) a termination, or a threatened termination, or material
modification, in each case not in the ordinary course of business, of
any material contract or the relationship of any Subsidiary with any
customer or supplier, who in the aggregate accounted for in excess of
$50,000 of gross sales or purchases during the Subsidiary's last two
full fiscal years unless such contract or relationship is lost to Buyer;
(e) any change in accounting methods or principles or the
application thereof, any change in policies or practices with respect to
items affecting working capital or any material change by the Seller and
any of the Subsidiaries in tax methods or principles or the application
thereof;
(f) any delay or reduction in capital expenditures in
contemplation of this Agreement or otherwise, or any failure to continue
to make capital expenditures in the ordinary course of business
consistent with past practice by Seller or a Subsidiary;
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(g) any acceleration of sales or orders or other similar
action in contemplation of this Agreement or otherwise not in the
ordinary course of business consistent with past practice;
(h) any bonus payments, salary increases, commission increases
or modifications, the execution of any employment agreement, severance
arrangement, consulting arrangement, sales agency agreement,
representation agreement or distribution agreement or similar document
or agreement, or other changes in employee benefits or other
compensation affecting any employee, officer, director, representative
or agent of any Subsidiary;
(i) any waiver of any rights that, singly or in the aggregate,
are material to any Subsidiary or the financial condition or results of
operation of any Subsidiary;
(j) any issuance by any of the Subsidiaries of any shares of
capital stock or any repurchase or redemption by any of the Subsidiaries
of any shares of capital stock;
(k) any transaction between Seller or any Affiliate other than
a Subsidiary on the one hand and any of the Subsidiaries on the other
hand;
(l) any declaration or payment of any dividend on, or any
other distribution with respect to, the equity securities of any of the
Subsidiaries; or
(m) any contract or commitment to do or cause to be done any
of the foregoing.
Section 4.10 Contracts and Commitments Schedule 4.10 lists all
agreements, leases, commitments, contracts, undertakings or understandings,
oral or written, to which any of the Subsidiaries is a party as of the date of
execution of this Agreement, including but not limited to trademark, trade name
or patent license agreements, service agreements, lease, purchase or sale
agreements, supply agreements, distribution or distributor agreements, purchase
orders, customer
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orders and equipment rental agreements, that are either material to any of the
Subsidiaries or involve consideration with a value of $50,000 or more. No
Subsidiary is in breach of or default under any agreement, lease, contract or
commitment listed or of a type required to be listed (without regard to the
date thereof) in Schedule 4.10 (collectively, the "Agreements"). Each
Agreement is a valid, binding and enforceable agreement of a Subsidiary and, to
the knowledge of Seller after reasonable investigation, the other parties
thereto, enforceable except as such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and general principles of equity.
There has not occurred any breach or default under any Agreement on the part of
the other parties thereto, and no event has occurred which with the giving of
notice or the lapse of time, or both, would constitute a default under any
Agreement. There is no dispute between the parties to any Agreement as to the
interpretation thereof or as to whether any party is in breach or default
thereunder, and no party to any Agreement has indicated its intention to, or
suggested it may evaluate whether to, terminate any Agreement. No Subsidiary
is a party to any covenant or obligation of any nature limiting the freedom of
any Subsidiary to compete in any line of business after the Closing. No notice
has been given under any lease to extend the term hereof beyond its current
term.
Section 4.11 Taxes.
(a) Each of the Seller, its Subsidiaries and any affiliated,
combined or unitary group of which any such corporation is or was a
member has (i) timely (taking into account any extensions) filed all Tax
Returns required to be filed or sent by or with respect to it in respect
of any Taxes, (ii) timely paid all Taxes (including estimated Taxes)
that are due and payable for which the Seller or any of its Subsidiaries
may be liable, (iii) established reserves that are adequate for the
payment of all Taxes not yet due and payable with respect to the
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results of operations of the Seller and its Subsidiaries through the
Closing Date and (iv) complied in all respects with all applicable laws,
rules and regulations relating to the payment and withholding of Taxes
and has in all respects timely withheld from employee wages and paid
over to the proper taxing and other governmental authorities all amounts
required to be so withheld and paid over, based on the manner in which
Seller and the Subsidiaries have classified their employees under the
Fair Labor Standards Act and Department of Transportation regulations.
(b) Schedule 4.11 sets forth (i) the last period through which
all Tax Returns of the Seller and any of its Subsidiaries have been
examined by the IRS, Revenue Canada, or any other taxing authority or
otherwise closed and (ii) any affiliated, consolidated, combined,
unitary or similar group Tax Return in which the Seller is or has been a
member or is or has joined in the filing. Except to the extent being
contested in good faith, all deficiencies asserted as a result of such
examinations have been paid, fully settled or adequately provided for in
accordance with generally accepted accounting principles consistently
applied in the United States as reflected in the Seller's most recent
audited financial statements. No Tax audits or other administrative
proceedings or court proceedings are presently pending with regard to
any Taxes for which the Seller or any of its Subsidiaries would be
liable, and no deficiency for any such Taxes has been proposed, asserted
or assessed pursuant to such examination against the Seller or any of
its Subsidiaries by any taxing authority with respect to any period.
(c) Neither the Seller nor any of its Subsidiaries has
executed or entered into with the IRS, Revenue Canada, or any other
taxing authority (i) any agreement or other document extending or having
the effect of extending the period for assessments or collection of any
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Tax for which the Seller or any of its Subsidiaries would be liable or
(ii) a closing agreement pursuant to Section 7121 of the Code that
relates to the assets or operations of the Seller or any of its
Subsidiaries other than the items noted on Schedule 4.11. There are no
Tax liens upon any assets of the Seller or any of its Subsidiaries.
(d) Neither the Seller nor any of its Subsidiaries has made an
election under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by the
Seller or any of its Subsidiaries.
(e) Neither the Seller nor any of its Subsidiaries is a party
to, is bound by or has any obligation under any Tax sharing agreement or
similar agreement or arrangement.
Section 4.12 Title to Properties. Except as set forth in
Schedule 4.12 hereto, each Subsidiary has good and indefeasible title to all of
its assets, free and clear of all Liens.
Section 4.13 Trademarks, Trade Names and Intellectual Property.
Schedule 4.13 contains an accurate and complete list of (a) all patents,
pending patent applications and invention memoranda owned by any Subsidiary or
relating to the Business of any of them, (b) all registered United States and
foreign trademarks, trade names and logos owned or used by any Subsidiary, and
all registrations thereof, and (c) all unregistered United States and foreign
trademarks, trade names and logos used by any Subsidiary. Such Subsidiary has
the right to use all trademarks, trade names, logos, patents, pending patent
applications and invention memoranda referred to herein. Except as expressly
set forth in Schedule 4.7 hereto, there is no pending or threatened action or
claim that would impair any such right. Except as set forth in Schedule 4.13
hereto, any or all Subsidiaries are the sole and exclusive owners of, with all
right, title and interest in and to, each item described in Schedule 4.13 and
have sole and exclusive rights to the use thereof or the material covered
thereby.
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Section 4.14 Financial Records; Budget. The audited
consolidated financial statements of the Seller and its Subsidiaries as of and
for the years ended December 31, 1993, 1994, 1995, the unaudited consolidated
financial statements for the quarters ended March 31, 1996 and June 30, 1996,
and the unaudited consolidating financial statements of the Subsidiaries as of
and for the years ended December 31, 1993, 1994 and 1995 previously delivered
to Buyer (collectively, the "Financial Statements"), are each accurate,
complete, true and correct in all material respects, were prepared in
accordance with GAAP consistently applied in the United States (except as set
forth therein), and fairly present in all material respects the financial
condition and results of operations of the Seller and its Subsidiaries. The
August 31 Financial Statements, previously delivered to Buyer, are each
accurate, complete, true and correct, were prepared in accordance with GAAP
consistently applied in the United States (except as set forth therein), and
fairly present the financial condition and results of operations of the
Subsidiaries. Schedule 4.14(B) reflects all intercompany transactions between
any Subsidiary and the Seller or any Affiliates of Seller for the period from
August 31, 1996 through the Closing Date.
Section 4.15 Condition of Assets and Inventory. All the assets
of each Subsidiary are in good, serviceable condition and fit for the
particular purposes for which they are used in the business of the owner
thereof, subject only to normal maintenance requirements and normal wear and
tear reasonably expected in the ordinary course of business. All items of
inventory of each Subsidiary are merchantable or (in the case of raw materials,
supplies and work in process) suitable and useable for the production or
completion of merchantable products, for sale in the ordinary course of
business as first quality goods at ▇▇▇▇-ups consistent with past practice, none
of such items is below standard quality, obsolete or obsolescent, and each item
is reflected in the Financial Statements and the August 31 Financial Statements
on the basis of a physical count and is valued
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at the lower of cost or market in accordance with GAAP consistently applied in
the United States (including any required reduction for impaired value or slow-
moving inventory). Such inventory includes a sufficient but not an excess
quantity of each type of such inventory to meet the normal requirements of the
Subsidiaries.
Section 4.16 Liabilities. Except as set forth in Schedule 4.16
or in the financial statements and notes thereto referred to in Section 4.14,
there is no existing, contingent or, to Seller's knowledge after reasonable
investigation, threatened liability, obligation, lien or claim of any nature
(absolute, accrued, contingent or otherwise) that relates to or has been or may
be asserted against any Subsidiary.
Section 4.17 Employees and Related Matters.
(a) Seller has heretofore delivered a complete list of all
employees of each Subsidiary, listing the title or position held, base salary,
any commissions or other compensation paid or payable in 1996 as reflected on
such Schedule, all employee benefits received by such employees and any other
terms of any oral or written agreement between any such employee and the
Seller, any Subsidiary or any Affiliate thereof. The Seller has heretofore
delivered to the Buyer true and correct copies of each management or employment
contract or contract for personal services and a complete description of any
other understanding or commitment between any Subsidiary (or the Seller on
behalf of any Subsidiary) and any officer, consultant, director, employee,
independent contractor or other person or entity.
(b) The Seller is not a party to any collective bargaining
agreement or labor contract.
(c) The Seller has taken all necessary actions to comply with
the Worker Adjustment and Retraining Notification Act (the "WARN Act") through
the Closing Date, to the
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extent it is subject to such act, and the Buyer shall not have any disclosure
or announcement obligations under the WARN Act as a result of the transaction
contemplated by this Agreement.
Section 4.18 No Material Change. There has been no material
adverse change in the business, results of operations, assets or financial
position of any Subsidiary from August 31, 1996 to and including the Closing
Date, and no event has occurred which could be expected to lead to or cause
such a material adverse change.
Section 4.19 Compliance With Law. No Subsidiary is in violation
of any provision of Applicable Law, including any Environmental Law, and no
Subsidiary has received any notice of any alleged violation of such Applicable
Law.
Section 4.20 Tangible Personal Property. Except for the
Excluded Assets, all of the fixtures, machinery and equipment reflected in the
August 31 Financial Statements and/or used in connection with the Business of a
Subsidiary are in the possession and under the operating control of such
Subsidiary ("Tangible Personal Property"). Except as set forth in Schedule
4.20 hereto, no item of Tangible Personal Property requires repairs in excess
of $2,500 to be in good, serviceable condition and fit for the particular
purpose for which it is currently used, subject only to normal maintenance
requirements and normal wear and tear reasonably expected in the ordinary
course of business.
Section 4.21 Insurance. Schedule 4.21 contains a list of all
insurance policies of the Seller or any Subsidiary or relating to the conduct
of the Business and the status of prepayments. The Seller has heretofore
delivered to Buyer a copy of all such policies. Such policies are in full
force and effect, and the Seller and the Subsidiaries are not in default under
any of them.
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Section 4.22 Government Licenses, Permits and Related Approvals.
Seller has heretofore provided to Buyer a list of all Permits required for the
conduct of Business by the Subsidiaries, all of which are in full force and
effect and are not being violated.
Section 4.23 Distributed Products. Schedule 4.23 sets forth a
complete listing of all products (a) distributed by any Subsidiary (and the
manufacturer thereof and the person, if different, for whom such Subsidiary
distributes such product) or (b) manufactured or sold by any Subsidiary and
distributed by others (and the name of such distributor). Such Schedule also
sets forth the terms of each such distribution arrangement. Each Subsidiary
has full right to distribute all products referred to in clause (a) of this
Section.
Section 4.24 Safety Reports. Seller has heretofore provided to
Buyer a complete listing of all insurance loss runs, worker's compensation
reports and claims, safety citations and reports, OSHA reports and all
documents relating to any of the foregoing since July 1, 1993.
Section 4.25 Transactions with Certain Persons. Except as set
forth in Schedule 4.25, during the past three years no Subsidiary has, directly
or indirectly, purchased, leased or otherwise acquired any property or obtained
any services from, or sold, leased or otherwise disposed of any property or
furnished any services to, or otherwise dealt with (except with respect to
remuneration for services rendered as a director, officer or employee of any
Subsidiary), in the ordinary course of business or otherwise, with a value of
or in a transaction or series of transactions with a value of $60,000 or more,
(a) any officer, director or shareholder of the Seller or any Affiliate thereof
other than a Subsidiary or (b) any person, firm or corporation which, directly
or indirectly, alone or together with others, controls, is controlled by or is
under common control with the Seller or any shareholder thereof. No Subsidiary
owes any amount to, or has any contract with or commitment to, any of its
shareholders, directors, officers, employees or consultants (other than
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compensation for current services not yet due and payable and reimbursement of
expenses arising in the ordinary course of business not in excess of $1,000 in
the aggregate), and none of such persons owes any amount to any Subsidiary.
Section 4.26 Accounts Receivable. All the accounts receivable
of the Subsidiaries are valid, genuine and subsisting, arise out of bona fide
sales and deliveries of goods, performance of services or other business
transactions in the ordinary course of business, are owned free and clear and
not subject to any Lien, and are current and collectible net of any reserves
shown on the August 31 Financial Statements (which reserves are adequate and
were calculated consistent with past practice).
Section 4.27 Studies, Etc. Seller has heretofore provided to
Buyer a complete list of all studies, reports, plans, analyses or similar
documents of a material nature (whether prepared by employees of the Seller or
any Subsidiary or others) in the possession or control of the Seller or any
Subsidiary thereof relating to safety, the environment, Hazardous Material,
intellectual property, markets, competitors, strategic planning, product
liability, warranties or otherwise relating in any way to a Subsidiary,
excluding any reports prepared by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates.
Section 4.28 Disclosure. All schedules to this Agreement are
complete and accurate or will be on the Closing Date. No representation or
warranty by Seller in this Agreement or in any schedule or exhibit to this
Agreement, or in any statement or certificate or other document furnished to
Buyer by Seller or any representative of Seller, contains or will contain any
untrue statement of a material fact or omits or will omit a material fact
necessary to make the statements therein not misleading. The information
concerning the Seller in Seller's filings, reports and submissions under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), does not
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements therein not
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misleading. Seller's disclosure on any schedule to this Agreement shall not
affect Buyer's right to indemnification under Article VII hereunder in any way.
Section 4.29 Employee Benefits.
(a) For purposes of Section 4.29, all references to the
Seller shall be deemed to refer to the Seller, any Subsidiary and any
trade or business, whether or not incorporated, that together with the
Seller or any Subsidiary would be deemed or treated as a "single
employer" within the meaning of Section 4001 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Code Section 414.
The term "Seller Plan" shall mean any stock purchase, stock
option, pension, profit-sharing, retirement, bonus, deferred
compensation, incentive compensation, commission, severance or
termination pay, hospitalization, medical, dental, disability, life or
other insurance, or supplemental unemployment benefits plan or agreement
or policy or contract or other arrangement that is or ever has been
maintained or contributed to by the Seller for the purpose of providing
employment-related compensation or benefits to any current or former
officer, consultant, director, annuitant, employee, retiree or
independent contractor of the Seller or members of their respective
families (other than directors' and officers' liability policies),
whether or not insured, including without limitation "employee benefit
plans" as defined in ERISA and the rules and regulations thereunder.
The term "Subsidiary Plan" shall mean any Seller Plan that
formerly provided, provides or is intended to provide compensation or
benefits to any person or member of a person's family as a consequence
of that person's current or former relationship to a Subsidiary.
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(b) As of the Closing Date, no Seller Plan is or has been (i)
covered by Title IV of ERISA, (ii) subject to the minimum funding
requirements of Section 412 of the Code, (iii) a "multi-employer plan"
as defined in Section 3(37) of ERISA, (iv) subject to Section 4063 or
4064 of ERISA, or (v) a voluntary employees' beneficiary association
within the meaning of Code Section 501(c)(9).
(c) A list of each Subsidiary Plan is listed on Schedule 4.29.
The Seller has no commitment or obligation to establish or adopt any new
or additional plans or other arrangements that would constitute
Subsidiary Plans if adopted, or to increase materially the benefits
under any existing Subsidiary Plan. The Seller has heretofore delivered
to the Buyer true and correct copies of the following:
(i) each written Subsidiary Plan and all amendments
thereto as of the date hereof;
(ii) a complete written description of each other
Subsidiary Plan;
(iii) all current summary plan descriptions provided to
employees regarding the Subsidiary Plans;
(iv) each trust agreement and annuity contract (or any
other funding instruments), and each insurance contract,
pertaining to any of the Subsidiary Plans, including all
amendments to such documents to the date hereof;
(v) the most recent IRS Form 5500 for each Subsidiary
Plan and schedules thereto; and
(vi) the most recent determination letter issued by the
IRS with respect to any Subsidiary Plan qualified under Section
401(a) of the Code.
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(d) Each Subsidiary Plan is in compliance with the
provisions of all applicable laws, rules and regulations, including,
without limitation, ERISA and the Code. No person has engaged in any
prohibited transaction (within the meaning of Section 4975 of the Code
or Section 406 of ERISA) that could subject any Subsidiary to a
liability.
(e) All contributions and premiums required of any Subsidiary
(or of the Seller on behalf of any Subsidiary) by any legal requirement
or by the terms of any Seller Plan or any contract relating thereto have
been timely made (without regard to any waivers granted with respect
thereto) or accrued. All obligations of all Subsidiaries (and of the
Seller on behalf of any Subsidiary) with respect to each Seller Plan
have been paid or performed.
(f) Except as provided in Schedule 4.29, neither the Seller
nor any Subsidiary Plan provides for medical, life insurance or health
benefits or death benefits after an employee's termination of employment
(including retirement) except for continuation coverage required
pursuant to Section 4980B of the Code and Part 6 of Title I of ERISA and
the regulations thereunder.
(g) The Subsidiaries have no obligation to make any payments
that would be "excess parachute payments" under Section 280G of the
Code. The consummation of the transactions contemplated by this
Agreement will not (A) entitle any current or former employee of any
Subsidiary to severance pay, employment compensation or any other
payment, benefit or award (whether under a Subsidiary Plan or otherwise)
or (B) accelerate the time of payment or vesting, or increase the amount
of any benefit, award (including stock options, restricted stock and
similar awards) or compensation due any such employee or former
employee.
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(h) There are no pending, threatened or anticipated claims or
proceedings against any Subsidiary Plan, the assets of any Subsidiary
Plan or any Subsidiary, or the plan administrator or fiduciary of any
Subsidiary Plan with respect to the operation of any such plan (other
than routine, uncontested benefit claims), and there are no facts or
circumstances that could form the basis for any such claim or
proceeding.
Section 4.30 Environmental Matters.
(a) The operations of the Seller and its Subsidiaries have
been and, as of the Closing Date, will be, in compliance with all
Environmental Laws;
(b) The Seller and its Subsidiaries have obtained and will, as
of the Closing Date, maintain all Permits and have made and will, as of
the Closing Date, make all filings, reports and notices required under
applicable Environmental Law in connection with the operations of their
respective businesses;
(c) As of the date hereof, the Seller and its Subsidiaries are
not subject to any outstanding written orders, contracts or agreements
with any governmental entity or other person respecting (i)
Environmental Laws, (ii) Remedial Action, (iii) any Release or
threatened Release of a Hazardous Material, or (iv) an assumption of
responsibility for environmental claims of another entity;
(d) The Seller and its Subsidiaries have not received any
written communication alleging, with respect to any such party, the
violation of or liability under any Environmental Law or requesting,
with respect to any such party, information with respect to an
investigation pursuant to CERCLA or any other Environmental Law;
(e) Neither the Seller nor any of its Subsidiaries has any
contingent liability in connection with the Release of any Hazardous
Material into the indoor or outdoor
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environment (whether on-site or off-site) or employee or third-party
exposure to Hazardous Materials;
(f) The operations of the Seller or its Subsidiaries involving
the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined and regulated under 40 C.F.R. parts 260-270
or any state equivalent, are in compliance with applicable Environmental
Laws;
(g) Except as described on Schedule 4.30, there is not now,
nor, to the best knowledge of the Seller as of the date hereof, or has
there ever been, on or in any property owned, operated, leased or under
option by, the Seller or any Subsidiary or for which the Seller or any
Subsidiary has assumed responsibility for environmental claims, any of
the following: (i) any underground storage tanks or surface
impoundments, (ii) any on-site disposal of solid waste or Hazardous
Materials, (iii) any asbestos-containing materials, or (iv) any
polychlorinated biphenyls; and
(h) Buyer shall have the right to conduct such inspections and
investigations of the properties of any Subsidiary as Buyer deems
necessary or desirable, including, without limitation, the right to
conduct sampling of surface water, groundwater, soil, indoor and outdoor
air quality, and building materials.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller the following:
Section 5.1 Corporate Status and Good Standing. Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware, with full corporate
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power and authority under its certificate of incorporation and by-laws to
conduct its business as the same exists on the date hereof and on the Closing
Date.
Section 5.2 Authorization. Buyer has full corporate power and
authority under its certificate of incorporation and by-laws, and all necessary
corporate action has been taken to authorize it, to execute and deliver this
Agreement and the exhibits and schedules hereto, to consummate the transactions
contemplated herein and to take all actions required to be taken by it pursuant
to the provisions hereof or thereof, and each of this Agreement and the
exhibits hereto constitutes the valid and binding obligation of the Buyer
enforceable against Buyer in accordance with its terms, except as such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and general principles of equity.
Section 5.3 Non-Contravention. Neither the execution and
delivery of this Agreement and the schedules and exhibits hereto, nor the
consummation of the transactions contemplated herein or therein, does or will
violate, conflict with or result in breach of or require notice or consent
under any Applicable Law, the charter or by-laws of Buyer or any provision of
any agreement or instrument to which the Buyer is a party or result in the
creation of any Lien upon the capital stock, property or assets of Buyer, such
that there would be a material adverse effect on any benefit to Seller
hereunder. Except as set forth in Schedule 5.3, no consent, approval,
exemption, authorization or other action of, or notice to or filing with, any
third party, court or administrative or other governmental or regulatory body
is required by Buyer to execute, deliver or perform this Agreement and to
consummate the transactions contemplated herein and to take all actions
required to be taken by it pursuant to the provisions hereof.
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Section 5.4 Validity. There are no pending or threatened
judicial or administrative actions, proceedings or investigations which
question the validity of this Agreement or any action taken or contemplated by
Buyer in connection with this Agreement.
Section 5.5 Broker Involvement. Buyer has not hired, retained
or dealt with any broker or finder in connection with the transactions
contemplated by this Agreement.
Section 5.6 Litigation. Except as set forth in Schedule 5.6,
there is no investigation, claim or proceeding or litigation of any type
pending or threatened involving Buyer and Buyer is unaware of any judgment,
order, writ, injunction or decree of any court, government or governmental
agency or arbitral tribunal against or involving Buyer, that would have a
material adverse effect on any benefit to Seller hereunder.
Section 5.7 Investment Intention. The Shares are being
purchased by Buyer for investment purposes, and not with a view to, or for
resale in connection with, the distribution or other disposition thereof.
Section 5.8 Disclosure of Information. Buyer agrees and
acknowledges that it and its employees, officers and agents have been permitted
full and complete access to the books and records, plants, facilities,
equipment, tax returns, contracts, inventories, and other assets and
information of the Subsidiaries which it and its employees, officers and agents
have desired to review. Buyer further acknowledges that it has conducted such
investigation of the Subsidiaries, their assets, liabilities, operations and
financial conditions, it has deemed necessary and advisable for purposes of
determining to enter into this Agreement. Except to the extent of the express
representations, warranties and agreements contained in this Agreement, Buyer
is purchasing the Subsidiaries in reliance upon its own investigation of the
Subsidiaries. Buyer agrees and acknowledges that it is experienced in the tank
testing services business and has the knowledge and
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ability to conduct a full investigation of the Subsidiaries and to evaluate the
Subsidiaries' business, operations, financial conditions, assets and
liabilities. Buyer expressly represents and warrants that it has not relied on
any projections or representations (oral or written) except as set out herein,
which Buyer has obtained from Seller or the Subsidiaries and/or any of their
respect directors, officers, employees or agents. Notwithstanding the
foregoing, Seller's representations and warranties in this Agreement or Buyer's
right to rely thereon are not limited in any way as a result of Buyer's
investigation as described above.
Section 5.9 Financial Condition. At Closing, Buyer's financial
condition will be adequate to bear the economic risks of this acquisition. At
Closing, the Buyer will be in compliance with all financial and other covenants
related to all of its outstanding credit agreements including the facilities
being utilized to consummate this transaction, and will not be in default on
any credit agreement or facility.
Section 5.10 Restricted Securities. Buyer understands that the
Shares are characterized as "restricted securities" under the United States
federal securities laws and that under such laws and applicable rules and
regulations promulgated thereunder the Shares may be resold without
registration under the Securities Act of 1933, as amended (the "Act") only in
certain circumstances. Buyer understands that the certificates evidencing the
Shares may contain a legend restricting transfer as provided under the Act and
applicable rules and regulations promulgated thereunder.
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ARTICLE VI
ADDITIONAL AGREEMENTS AND COVENANTS
Section 6.1 Other Offers. From and after the date hereof until
Closing, Seller, or each of its officers, directors, stockholders, employees,
affiliates, representatives or agents shall not, directly or indirectly, (a)
solicit, enter into or conduct discussions relating to, initiate or knowingly
encourage any offer or proposal for, or any indication of interest in, directly
or indirectly, a merger or business combination involving a Subsidiary or the
acquisition of an equity interest in, or a substantial portion of the assets
of, a Subsidiary or (b) unless required by law, regulation or judicial
compulsion, disclose any nonpublic information relating to a Subsidiary or the
Business of a Subsidiary, or afford access to the properties, books or records
of a Subsidiary, to any person or entity.
Section 6.2 Conduct of the Business Pending the Closing.
Seller covenants that until the Closing, each of the Subsidiaries shall comply,
and Seller shall cause the Subsidiaries to comply, with the provisions set
forth below:
(a) Each Subsidiary shall operate its respective Business in
the ordinary course;
(b) Seller shall promptly notify Buyer of, and furnish to
Buyer any information that Buyer may reasonably request with respect to,
the occurrence of any event or the existence of any fact that may result
in the representations and warranties of Seller not being true if they
were made at any time prior to or as of the date of the Closing;
(c) Except as set forth in Schedule 6.2, neither the Seller
nor any of its Subsidiaries shall (i) grant or agree to grant any
bonuses to any employee, officer, director, representative or agent of
any Subsidiary, (ii) grant any general increase in the rates of salaries
or compensation of employees, officers, directors, representatives or
agents of any
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of the Subsidiaries or any specific increase to any employee, officer,
director, representative or agent of any of the Subsidiaries, (iii)
provide for any new pension, retirement or other employment benefits to
any employee, officer, director, representative or agent of any of the
Subsidiaries or any increase in any existing benefits, (iv) terminate or
amend in any respect or provide for any material increase in benefits
under any Seller Plan or (v) execute any employment agreement, severance
arrangement, consulting arrangement, sales agency agreement,
representation agreement or distribution agreement with any employee,
officer, director, representative or agent of any Subsidiary;
(d) No Subsidiary shall amend its certificate of incorporation
or by-laws and neither the Seller nor any of the Subsidiaries shall
enter into any merger or consolidation agreement involving any
Subsidiary or its assets;
(e) Neither the Seller nor any of its Subsidiaries shall
authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any capital stock of any class or any other securities or
equity equivalents of any Subsidiary or amend any of the terms of any
such securities or agreements;
(f) Seller shall use best efforts to maintain and preserve the
Business of each Subsidiary intact, to retain each Subsidiary's present
employees so that they will be available after the Closing and to
maintain each Subsidiary's existing relationships with customers,
suppliers and others so that those relationships will be preserved after
the Closing;
(g) None of the Subsidiaries shall sell, assign or dispose of
any of its material assets or properties, tangible or intangible, or
incur or assume any liabilities or enter into any
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sale/leaseback or similar transaction, except for sales and dispositions
made, or liabilities incurred, in the ordinary course of business
consistent with past practices;
(h) None of the Subsidiaries shall assume, guarantee, endorse
or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person or
entity or make any loans, advances or capital contributions to or
investments in any other person or entity;
(i) Seller and its Subsidiaries shall maintain in full force
and effect all insurance currently maintained as set forth in Schedule
4.21;
(j) Neither the Seller nor any of its Subsidiaries shall take,
or agree in writing or otherwise to take, any of the actions described
in this Section 6.2 or any action that would make any representation or
warranty inaccurate or untrue or that would result in any of the
conditions set forth in Article VIII hereof not being satisfied;
(k) Seller and its Subsidiaries shall comply in all material
respects with all Applicable Laws including, without limitation,
Environmental Laws;
(l) Each Subsidiary shall maintain the books of account and
records in the usual, regular and customary manner consistent with
practices employed prior to the date hereof;
(m) Seller and each Subsidiary shall not implement or adopt
(i) any change in its accounting methods or principles or the
application thereof (including depreciation lives) or (ii) any material
change in its tax methods or principles or the application thereof
(including depreciation lives); and
(n) No Subsidiary shall split, combine or reclassify any
shares of its capital stock, declare, set aside or pay any dividends or
other distributions in respect of its capital stock or redeem, purchase
or otherwise acquire any of its capital stock.
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Section 6.3 Public Announcements. Subject to applicable
securities law, stock exchange requirements or judicial compulsion, neither
Seller or a Subsidiary or another Affiliate of Seller nor Buyer or another
Affiliate of Buyer shall, without the prior approval of Seller or Buyer, as the
case may be, issue, or permit any of their respective directors, officers,
employees, agents to issue, any press release or other public announcement with
respect to this Agreement or the transactions contemplated hereby.
Section 6.4 Further Assurances. The Seller and Buyer each
shall execute, acknowledge and deliver or cause to be executed, acknowledged
and delivered to Buyer or Seller, as the case may be, such assignments or other
instruments of transfer, assignment and conveyance, in form and substance
reasonably satisfactory to counsel of Buyer or counsel of Seller, as the case
may be, as shall be necessary to vest in Buyer all of the right, title and
interest in and to the Shares free and clear of all liens, charges,
encumbrances, rights of others, mortgages, pledges or security interests, and
any other document reasonably requested by Buyer in connection with this
Agreement. Seller and Buyer each agree that, from time to time, whether
before, at or after the Closing Date, it will execute and deliver such further
instruments and take such other action as may be reasonably necessary to carry
out the purposes and intent of this Agreement.
Section 6.5 Covenant Against Competition.
(a) As an essential consideration for the obligations of Buyer
under this Agreement, Seller hereby agrees and covenants that, for a
period of five years following the Closing Date, without Buyer's written
consent,
(i) neither Seller nor any of its Affiliates other than
a current member of the Board of Directors of the Seller shall
engage in any manner in any business in competition with the
Business of any Subsidiary or provide products or services of
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the same general type as those provided by a Subsidiary, in the
geographic areas in which the Subsidiaries have provided products
or services within one year before Closing; and
(ii) neither Seller nor any of its Affiliates other than
a current member of the Board of Directors of the Seller shall
hire, attempt to hire or assist any other person in hiring or
attempting to hire, or discouraging any person from accepting
employment with a Subsidiary, or inducing to leave the employ of
a Subsidiary, any employee or officer of a Subsidiary, or any
person who was an employee or officer of a Subsidiary within one
year prior to the Closing Date.
(b) If Buyer believes Seller or any Affiliate has violated the
provisions of this Section 6.5, Buyer shall have the right to seek
relief from any court of competent jurisdiction. Seller acknowledges
that money damages alone will not adequately compensate Buyer in the
event of a breach of the covenants of this Section. Therefore, Seller
agrees that in addition to all remedies available at law, in equity or
under this Agreement, Buyer shall be entitled to injunctive relief for
the enforcement of this covenant. Seller agrees that the covenants in
this Section are reasonable with respect to their duration, scope and
geographical area. If, at the time of enforcement of this Section, a
court should hold that the restrictions herein are unreasonable under
the circumstances then existing or otherwise, the parties agree that the
maximum duration, scope or geographical area legally permissible under
such circumstances will be substituted for the duration, scope or area
stated herein.
Section 6.6 Governmental Filings. As promptly as practicable
after the execution of this Agreement, each party shall, in cooperation with
the other, file any reports or notifications that may be required to be filed
by it under applicable law and shall furnish to the other all such
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information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other.
Section 6.7 Access to Information. Prior to Closing, Buyer may
make such investigation of the business and properties of Seller and the
Subsidiaries as Buyer may desire and, upon reasonable notice, Seller and the
Subsidiaries shall give to Buyer and its counsel, accountants and other
representatives reasonable access, during normal business hours throughout the
period prior to the Closing, to the property, books, commitments, agreements,
records, files and personnel of Seller and the Subsidiaries, and Seller shall
furnish to Buyer during that period all copies of documents and information
concerning the Business of Seller and the Subsidiaries as Buyer may reasonably
request, subject to applicable law. Buyer shall hold, and shall cause its
counsel, accountants and other agents and representatives to hold, all such
information and documents in confidence. Seller will cooperate with Buyer's
transition planning for the acquisition by providing access to key executives
of Seller and the Subsidiaries.
Section 6.8 Use of Name. Prior to or at Closing, Seller shall
eliminate, and cease and desist from, any use of the designation "Tanknology,"
"Vacutect," "Vacutest" or any similar name or designation or any designation
indicating an affiliation with a Subsidiary (the "Tanknology Designation") and
shall commence doing business under an assumed name. At the next meeting of
shareholders but in any event no later than June 30, 1997, Seller shall
officially change its name to a name that does not include a Tanknology
Designation.
Section 6.9 Other Action. Each of the parties shall use its
best efforts to cause the fulfillment at the earliest practicable date but, in
any event, prior to the Closing Date of all conditions to their respective
obligations to consummate the transactions under this Agreement.
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Section 6.10 Employee Benefit Matters. Effective as of the
Closing Date, the Seller shall amend all Subsidiary Plans except stock options
plans of the Seller to terminate the participation of the Subsidiaries therein,
and shall further amend the Seller's defined contribution Subsidiary Plans
except stock option plans of the Seller to provide for full vesting of the
accounts of all current and former employees of the Subsidiaries participating
therein.
Section 6.11 Cooperation with Financings and Financial
Reporting. Seller acknowledges and understands that in the event Buyer
conducts certain offerings of its securities or is subject to reporting
requirements under the Exchange Act, Buyer will be required to obtain certain
information relating to the Seller, the Subsidiaries or the Business,
including, but not limited to, audited or unaudited financial statements of
Seller and the Subsidiaries, and disclose such information in registration
statements and other documents filed with the Securities and Exchange
Commission under the federal securities laws or in disclosure documents given
investors in certain securities offerings. Seller agrees to use its best
efforts to cooperate fully and promptly, and shall cause their affiliates,
accountants, counsel and other agents and representatives to cooperate fully
and promptly, with Buyer in connection therewith.
Section 6.12 Consents. Each party will cooperate with the other
and proceed, as promptly as is practicable, to seek to obtain all necessary
consents and approvals set forth in Schedule 4.4 or Schedule 5.3, and to
endeavor to comply with all other legal or contractual requirements for or
preconditions to the execution and consummation of this Agreement.
Section 6.13 Tax Certificate. On or before the Closing Date,
Seller will provide to Buyer a certificate ("Tax Certificate") that sets forth
the following information as of the date for each particular item of
information which is as close to the Closing Date as is reasonably practicable:
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(a) The following information shall be provided in accordance
with the reporting of such information on the most recently filed Tax
Return for each such Tax:
(i) The adjusted basis for Tax purposes of the assets
of each of the Seller and the Subsidiaries, and
(ii) The amounts of the net operating loss, net capital
loss, foreign Tax credit and Tax credit carry forwards, the
overall foreign losses and the foreign Taxes paid or accrued in
excess of the applicable foreign Tax credit limitations of or
allocable to each of the Subsidiaries;
(b) All current consents and elections with respect to Taxes
of or with respect to each of the Subsidiaries that have been filed with
any taxing authority;
(c) All taxable periods for which the income and franchise Tax
Returns of or with respect to each of the Subsidiaries are open; and
(d) All Tax partnerships in which either of the Subsidiaries
is a member.
Section 6.14 Certain Tax Elections. Buyer and Seller shall make
a timely and effective joint election (the "Section 338(h)(10) Election") under
Section 338(h)(10) of the Code for each of Tanknology and USTMAN with respect
to the purchase of the Tanknology Shares and the USTMAN Shares. Moreover,
Buyer shall prepare completed Forms 8023-A for each of Tanknology and USTMAN
providing for the Section 338(h)(10) Elections. If Buyer and Seller disagree
as to any information (including but not limited to the valuation of any asset)
required to be provided on any Form 8023-A (including any schedule attached
thereto), the specific matters in dispute shall be submitted to the Auditors,
or such independent accounting firm as may be approved by Seller and Buyer,
which firm shall render its opinion as to such matters. Based on such opinion,
such independent accounting firm will then send to Seller and Buyer its
determination of the specified
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matters in dispute, which determination shall be final and binding on the
parties hereto. The parties agree to represent such information on Form 8023-A
consistent with such Auditors' opinion. The fees and expenses of the Auditors
shall be borne one-half by Seller and one-half by Buyer. At the Closing Date
or as soon as practicable thereafter, Seller and Buyer will jointly execute
such Forms 8023-A, and thereafter Buyer, on behalf of Buyer and Seller, will
timely file such Forms 8023-A with the relevant taxing authority and will
provide proof of such filing to Seller. Buyer shall have the right, but not
the obligation, to make an election under Section 338(g) of the Code for
Tanknology Canada with respect to the purchase of Tanknology Shares.
Section 6.15 Liability for Taxes.
(a) Seller shall be liable for, and shall defend, indemnify
and hold Buyer harmless against, (i) any Taxes incurred by any of the
Subsidiaries for any taxable period ending on or before the Closing
Date, (ii) a portion, determined in the manner set forth in this Section
6.15, of any Taxes incurred by any of the Subsidiaries for any taxable
period that includes the Closing Date but ends after the Closing Date
("Straddle Period"), (iii) any income Taxes caused by, or arising from,
the Section 338(h)(10) Election, (iv) any transfer or sales Taxes
arising from the transactions contemplated in this Agreement, other than
transfer or sales Taxes that are imposed because of the Section
338(h)(10) Election if such Taxes are in excess of the transfer or sales
Taxes that would have been imposed if the Section 338(h)(10) Election
had not been made, and (v) any Taxes imposed with respect to any payment
from Seller under this sentence. Any Tax refunds received by the Buyer
relating to the Tax liability of a Subsidiary for a period ending on or
before the Closing Date shall be the property of the Seller other than
Tax refunds generated because of a Buyer tax attribute. Seller will
ensure that with respect to any Tax partnership listed on the Tax
Certificate, the
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appropriate party has made or will make a valid election under Section
754 of the Code with respect to each such Tax partnership in the time
and in the manner provided in Regulation Section 1.754-1(b) such that
each such election is in effect for the taxable year of each such Tax
partnership that includes the Closing Date.
(b) If a Straddle Period exists for any of the Subsidiaries
for any Tax purpose, the Buyer, Seller, and such Subsidiary, to the
extent permitted by law, shall elect to treat such period for purposes
of this Agreement as consisting of two periods: (i) a period beginning
with the first day of the Straddle Period and ending on the Closing Date
("Pre-Closing Period") and (ii) a period beginning immediately after the
Closing Date and ending with the last day of the Straddle Period ("Post-
Closing Period"). If applicable law does not permit such an election to
be made, Taxes for the entire Straddle Period shall be apportioned
between the Pre-Closing Period and the Post-Closing Period under the
interim-closing-of-the-books method applied on the Closing Date, except
that exemptions, allowances, deductions, and credits calculated under
Applicable Law on an annual basis shall be apportioned on a per diem
basis between these two periods. Seller shall be liable for the Taxes
apportioned to the Pre-Closing Period.
(c) Seller shall prepare, or cause the Subsidiaries to
prepare, and submit to Buyer all Tax Returns of the Subsidiaries (and
any Tax partnerships in which (i) a Subsidiary owns an interest and (ii)
Seller or a Subsidiary has responsibility for preparing and filing
partnership Tax Returns) for Taxes for any taxable period ending on or
before the Closing Date and for which the due date of any such Tax
Return is subsequent to the Closing Date. Any such Tax Return shall be
prepared on a basis consistent with Tax Returns prepared with respect to
the Subsidiaries for prior taxable periods, unless otherwise required by
law, and
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shall be submitted to Buyer not later than (i) in the case of any United
States federal income or Canadian income Tax Return, 60 days before the
due date of such Tax Return, and (ii) in the case of any other Tax
Return, 30 days before the due date of such Tax Return. Seller is
responsible for filing any such Tax Return and for preparing and filing
any other Tax Return of the Subsidiaries for Taxes for any taxable
period ending on or before the Closing Date.
(d) Buyer and its Affiliates, including the Subsidiaries, are
responsible for preparing and filing with the appropriate taxing
authorities all Tax Returns which relate to the Taxes of the
Subsidiaries other than those described in Section 6.15(c), except that
Tax Returns which relate to a Post-Closing Period shall be completed by
the Buyer. Seller shall cooperate with the Buyer and shall make
available all necessary records and timely take all action necessary to
allow Buyer to file, or prepare and file, as the case may be, the Tax
Returns described in this paragraph (including, without limitation,
providing or causing to be provided to Buyer any powers of attorney
which Buyer shall request for purposes of filing any such Tax Returns).
Such Tax Returns shall be prepared on a basis consistent with those
prepared with respect to the Subsidiaries for taxable periods ending on
or before the Closing Date, unless otherwise required by law.
(e) Notwithstanding any provision in this Section 6.15 to the
contrary, the Buyer shall reimburse the Seller for certain Taxes, if
any, incurred by the Seller in connection with the liability of an
affiliated, combined, or unitary group of corporations with respect to
the income, if any, of the Subsidiaries from the period from August 31,
1996, through the Closing Date in an amount equal to 37% of the net
taxable income, reduced by all appropriate expenses, deductions and
credits, of the Subsidiaries for such period determined in accordance
with United States federal income tax principles ("Reimbursable Taxes").
The
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Buyer has an obligation to reimburse the Seller for such Reimbursable
Taxes only if (i) the Seller submits, on or after the date the Seller
filed all Tax returns relating to the period from August 31, 1996
through the Closing Date, to the Buyer a certificate (and such
supporting documentation as the Buyer may reasonably request) prepared
by the Seller setting forth the amount of such Reimbursable Taxes. If
the Buyer disputes the amount of such Reimbursable Taxes set forth on
such certificate, the parties shall submit the specific matters in
dispute to the Auditors, or such independent accounting firm as may be
approved by Seller and Buyer, which firm shall render its opinion as to
such matters. Based on such opinion, such independent accounting firm
will then send to Seller and Buyer its determination of the specified
matters in dispute, which determination shall be final and binding on
the parties hereto. The fees and expenses of the Auditors shall be
borne one-half by Seller and one-half by Buyer. The Buyer shall make
such reimbursement payment within 60 days of receiving the certificate
and supporting documentation referred to in this Section 6.15(e), unless
a dispute is submitted to the Auditors. If a dispute regarding the
Reimbursable Taxes is submitted to the Auditors, the payment, if any,
shall be made within 15 days of the Auditors' decision.
(f) Any payment made with respect to Taxes pursuant to this
Section 6.15 shall be treated by Seller and Buyer as a nontaxable
adjustment to the Purchase Price for the Shares.
Section 6.16 Cooperation and Exchange of Information. The
parties will provide each other with such cooperation and information as they
may reasonably request of each other in preparing or filing any Tax Return,
amended Tax Return or claim for refund, in determining a liability or a right
to refund or in conducting any audit or other proceeding, in respect of Taxes
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imposed on the parties or their respective Affiliates. The Subsidiaries and
each party will preserve and retain all Tax Returns, schedules, work papers and
other documents relating to any such Tax Returns, claims, audits or other
proceedings until the expiration of the statutory period of limitations
(including extensions) of the taxable periods to which such documents relate
and until the final determination of any payments which may be required with
respect to such periods under this Agreement and shall make such documents
available to representatives of Seller upon reasonable notice and at reasonable
times, it being understood that such representatives shall be entitled to make
copies of any such books and records as they shall deem necessary. Any
information obtained pursuant to this Section 6.16 shall be kept confidential,
except as may be otherwise necessary in connection with the filing of Tax
Returns or claims for refund or in conducting any audit or other proceeding.
Section 6.17 Conflict. In the event of a conflict between the
provisions of Sections 6.13, 6.14, 6.15, or 6.16 and any other provision of
this Agreement, the provisions of this Article VI shall control.
Section 6.18 Insurance. Buyer agrees to procure and maintain
for three years after the Closing Date commercial general liability insurance
and environmental liability insurance covering contractors' legal liability and
professional/errors & omissions liability with no pollution exclusion with
policy terms, conditions, exclusions, limits and deductibles not materially
less favorable than such insurance maintained by Seller, as described in
Schedule 6.18.
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ARTICLE VII
EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION
Section 7.1 Indemnification of Buyer. Seller agrees to defend,
indemnify and hold harmless Buyer (including its officers, directors, employees
and agents and Affiliates) from and against, any and all claims, actions,
causes of action, arbitrations, proceedings, losses, damages, liabilities,
judgments and expenses (including, without limitation, reasonable attorneys'
fees) ("Claim") incurred by Buyer, any Affiliate of Buyer, Seller or any
Subsidiary as a result of (a) any error, inaccuracy, breach or
misrepresentation in any of the representations and warranties made by or on
behalf of Seller in this Agreement or in any certificate or other instrument
delivered by or on behalf of Seller in connection with this Agreement
(including the Schedules hereto), (b) any violation or breach by Seller of or
default by Seller under the terms of this Agreement, (c) any act or omission
occurring, or condition or circumstances existing, prior to the Closing, or any
condition or circumstances caused by any act or omission occurring prior to the
Closing, by Seller or any Subsidiary or otherwise with respect to Seller or any
Subsidiary, (d) the past or present presence, release, remediation or clean-up
of, or exposure to, Hazardous Material relating to or located on, within or
under any assets owned, leased or used by Seller or any Subsidiary, or (e) any
product liability, strict liability or other claims concerning (i) products
sold or services provided by Seller or any Subsidiary prior to the Closing or
(ii) inventory owned by Seller or any Subsidiary at the Closing. Buyer shall
be entitled to recover its reasonable and necessary attorneys' fees and
litigation expenses incurred in connection with successful enforcement of its
rights under this Section.
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Section 7.2 Survival; Threshold and Limits of Liability.
(a) The representations, warranties and covenants in this
Agreement and in any certificate or instrument delivered in connection
herewith shall be continuing and shall survive the Closing until two
years after the Closing Date (the period during which the
representations and warranties shall survive being referred to herein
with respect to such representations and warranties as the "Survival
Period"), but shall thereafter terminate and be of no further force and
effect unless a written notice asserting a claim shall have been made
pursuant to this Article VII within the Survival Period with respect to
such matter. Any claim for indemnification of a Claim of the type set
forth in Section 7.1(a)-(d) of this Agreement (a "Section 7.1 Claim")
made during the Survival Period shall remain in effect for purposes of
such indemnification notwithstanding such claim may not be resolved
within the Survival Period. Seller shall indemnify Buyer for any
Section 7.1 Claim in an aggregate amount up to $1,000,000 in excess of
any estimated liabilities accrued therefore by the Subsidiaries and
transferred to Buyer and any insurance proceeds realized by Buyer in
respect of such Claims net of any insurance premiums that become due as
a result of such Claims.
(b) Any claim for indemnification of Buyer for a Claim of the
type set forth in Section 7.1(e) (a "Section 7.1(e) Claim") must be made
no later than three years after the Closing Date. Any such Claim shall
remain in effect for purposes of such indemnification even if the Claim
is not resolved within three years after the Closing Date. Seller shall
indemnify Buyer for any Section 7.1(e) Claim up to an aggregate amount
of $1,250,000 in excess of $659,650, representing the estimated
liabilities accrued therefore by the Subsidiaries to be transferred to
Buyer, and in excess of any insurance proceeds realized by
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Buyer in respect of Section 7.1(e) Claims net of any insurance premiums
that become due as a result of such Claim.
Section 7.3 Indemnification Procedures. All claims for
indemnification under this Agreement shall be asserted and resolved as follows:
(a) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall with reasonable promptness (i) notify the party from
whom indemnification is sought (the "Indemnifying Party") of any third-party
claim or claims asserted against the Indemnified Party ("Third Party Claim")
for which indemnification is sought and (ii) transmit to the Indemnifying Party
a copy of all papers served with respect to such claim (if any) and a written
notice ("Claim Notice") containing a description in reasonable detail of the
nature of the Third Party Claim, an estimate of the amount of damages
attributable to the Third Party Claim to the extent feasible (which estimate
shall not be conclusive of the final amount of such claim) and the basis of the
Indemnified Party's request for indemnification under this Agreement.
Within 15 days after receipt of any Claim Notice (the "Election
Period"), the Indemnifying Party shall notify the Indemnified Party whether the
Indemnifying Party disputes its potential liability to the Indemnified Party
with respect to such Third Party Claim and, if the Indemnifying Party does not
dispute its potential liability to the Indemnified Party with respect to such
Third Party Claim, whether the Indemnifying Party elects to defend the
Indemnified Party with respect to such Third Party Claim.
If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party within the Election Period and notifies the
Indemnified Party that it elects to defend such Third Party Claim, the
Indemnified Party shall control negotiations toward resolution of such claim
without the necessity of litigation, and if litigation ensues, to defend the
same with counsel
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reasonably acceptable to both parties, at the Indemnifying Party's expense, and
the Indemnified Party shall extend reasonable cooperation in connection with
such defense. The Indemnified Party shall be entitled to elect to participate
in, but not to control, the defense of any Third Party Claim resulting in
litigation, at its own cost and expense; provided, however, that if the parties
to any suit or proceeding shall include the Indemnifying Party as well as the
Indemnified Party and the Indemnified Party shall have been advised by counsel
that one or more legal defenses may be available to it that may not be
available to the Indemnifying Party, then the Indemnified Party shall be
entitled to elect to control such suit or proceeding, but the Indemnifying
Party shall be obligated to bear the fees and expenses of counsel of the
Indemnified Party, which shall be selected by the Indemnified Party in its
complete and sole discretion. If the Indemnifying Party does not dispute its
potential liability to the Indemnified Party within the Election Period and the
Indemnified Party fails to assume control of the negotiations prior to
litigation or to defend such action within a reasonable time, the Indemnifying
Party shall be entitled, but not obligated, to assume control of such
negotiations or defense of such action, and the Indemnifying Party shall be
liable to the Indemnified Party for its expenses reasonably incurred or amounts
paid in connection therewith. If the Indemnifying Party disputes its potential
liability to the Indemnified Party within the Election Period or does not elect
to defend such Third Party Claim, then the Indemnified Party shall be entitled
to assume control of such negotiations or defense of action and the liability
for the expense thereof, as well as any liability with respect to such Third
Party Claim, shall be determined as provided in Section 7.4 below.
If the Indemnifying Party fails to notify the Indemnified Party
within the Election Period that the Indemnifying Party elects to defend the
Indemnified Party pursuant to the preceding paragraph, or if the Indemnifying
Party elects to defend the Indemnified Party but fails to prosecute
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or settle the Third Party Claim as herein provided, then the Indemnified Party
shall have the right to defend, at the sole cost and expense of the
Indemnifying Party (if the Indemnified Party is entitled to indemnification
hereunder), the Third Party Claim by all appropriate proceedings, which
proceedings shall be promptly and vigorously prosecuted by the Indemnified
Party to a final conclusion or settled. The Indemnified Party shall have full
control of such defense and proceedings. Notwithstanding the foregoing, if the
Indemnifying Party has delivered a written notice to the Indemnified Party to
the effect that the Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article VII and if such dispute is resolved in
favor of the Indemnifying Party, the Indemnifying Party shall not be required
to bear the costs and expenses of the Indemnified Party's defense pursuant to
this Section or of the Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified Party shall reimburse the
Indemnifying Party in full for all costs and expenses of such litigation. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this Section, and
the Indemnifying Party shall bear its own costs and expenses with respect to
such participation.
Neither the Indemnifying Party nor the Indemnified Party shall
settle, compromise, or make any other disposition of any Third Party Claim
which would or might result in any liability to the Indemnified Party or the
Indemnifying Party under this Article VII without the written consent of such
other party.
(b) In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder that does not involve a Third Party
Claim, the Indemnified Party shall transmit to the Indemnifying Party a written
notice (the "Indemnity Notice") describing in reasonable detail the nature of
the claim, an estimate of the amount of damages attributable to such claim to
the extent feasible (which estimate shall not be conclusive of the final amount
of such claim) and the
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basis of the Indemnified Party's request for indemnification under this
Agreement. If the Indemnifying Party does not notify the Indemnified Party
within 15 days from its receipt of the Indemnity Notice that the Indemnifying
Party disputes such claim, the claim specified by the Indemnified Party in the
Indemnity Notice shall be deemed a liability of the Indemnifying Party
hereunder.
Section 7.4 Arbitration of Disputes. If the Indemnifying Party
disputes, either as to the amount or liability, that any claim described in a
Claim Notice or an Indemnity Notice, as the case may be, is covered by such
Indemnifying Party's covenant to indemnify contained in this Article VII, then
the Indemnifying Party and the Indemnified Party agree to promptly negotiate in
good faith to resolve their differences and to mutually agree upon an amount,
if any, owed to Indemnified Party by the Indemnifying Party hereunder. If
Indemnifying Party and Indemnified Party fail to agree within 30 days
thereafter, the dispute shall be resolved by binding and final arbitration of a
single arbitrator mutually agreed to by Buyer and Seller conducted in Houston,
Texas in accordance with the rules of commercial arbitration of the American
Arbitration Association. The prevailing party in any such arbitration
proceeding shall be entitled to attorneys' fees and other out-of-pocket
expenses reasonably and necessarily incurred in connection with such
proceeding, the amounts of which shall be contained in the award of the
arbitrator.
Section 7.5 General. THE COVENANTS AND AGREEMENTS ENTERED INTO
PURSUANT TO THIS AGREEMENT TO BE PERFORMED AFTER THE CLOSING SHALL SURVIVE THE
CLOSING WITHOUT LIMITATION. THE INDEMNIFICATION OBLIGATIONS UNDER THIS ARTICLE
VII SHALL APPLY REGARDLESS OF WHETHER ANY CLAIM RESULTS SOLELY OR IN PART FROM
THE ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE OF THE INDEMNIFIED PARTY OR A
SUBSIDIARY PRIOR TO THE CLOSING DATE. THE PARTIES AGREE THAT THIS ARTICLE VII
DOES NOT ENTITLE
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THE BUYER TO INDEMNIFICATION FOR THE BUYER'S OR A SUBSIDIARY'S ACT OR OMISSION
AFTER THE CLOSING DATE. THE RIGHTS OF THE PARTIES TO INDEMNIFICATION UNDER
THIS ARTICLE VII SHALL NOT BE LIMITED DUE TO ANY INVESTIGATIONS HERETOFORE OR
HEREAFTER MADE BY SUCH PARTIES OR THEIR REPRESENTATIVES, REGARDLESS OF
NEGLIGENCE IN THE CONDUCT OF ANY SUCH INVESTIGATIONS. ALL REPRESENTATIONS,
WARRANTIES AND COVENANTS AND AGREEMENTS MADE BY THE PARTIES SHALL NOT BE DEEMED
MERGED INTO ANY INSTRUMENTS OR AGREEMENTS DELIVERED IN CONNECTION WITH THE
CLOSING OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 7.6 Security. Seller agrees that it shall not effect
its liquidation, dissolution, change of control, merger or sale of all or a
substantial portion of its assets, or any event causing it to cease to exist,
without assigning its obligations under this Section VII to a third party
acceptable to Buyer and/or posting security for such indemnification
obligations, in each case, to Buyer's reasonable satisfaction sufficient to
cover Seller's obligations hereunder throughout the period of time such
obligations exist.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions Precedent to Obligations of Buyer. The
obligation of the Buyer to consummate the purchase under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the
following conditions (any or all of which may be waived by the Buyer):
(a) all representations and warranties of the Seller contained
in this Agreement including all Schedules to this Agreement shall be
true and correct in all respects at and as of the time of the Closing
with the same effect as though made again at, and as of, that time,
except such as will not have a material adverse effect and except such
as would not
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reasonably be expected to have a material adverse effect on the Seller's
ability to perform its obligations under this Agreement;
(b) Seller shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement
to be performed or complied with by the Seller prior to or at the
Closing;
(c) Buyer shall have been furnished with a certificate, dated
the Closing Date, executed by an officer of the Seller (other than the
Chief Financial Officer) certifying to the fulfillment of the conditions
specified in Sections 8.1(a) and 8.1(b) hereof;
(d) no provision of any Applicable Law shall prohibit, and
there shall not be in effect any injunction, restraining order or decree
issued by a court of competent jurisdiction or any governmental body
that shall prohibit, the consummation of this Agreement and there shall
be no action or proceeding pending or threatened seeking any such
injunction, order or decree;
(e) Buyer shall have received proceeds from loans from one or
more commercial banks and/or commercial lenders totaling at least
$12,000,000 on terms and conditions satisfactory to Buyer in order to
finance the transactions contemplated hereby, related transaction costs
and working capital;
(f) Seller shall have received all consents, approvals and
Permits to execute this Agreement and to consummate the transactions
contemplated hereby; and
(g) Buyer shall be furnished with an opinion of counsel to
Seller and each of the Subsidiaries, as to the due execution and
delivery of this Agreement and the documents delivered by Seller at
Closing and substantially as to the matters set forth in Sections 4.1,
4.3, 4.4, 4.7 and 4.8 hereof and such other matters as Buyer may
reasonably request.
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Section 8.2 Conditions Precedent to Obligations of the Seller.
The obligation of the Seller to consummate the sale under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the
following conditions (any or all of which may be waived by the Seller):
(a) all representations and warranties of the Buyer contained
in this Agreement, including all Schedules to this Agreement, shall be
true and correct in all respects at and as of the time of the Closing
with the same effect as though made again at, and as of, that time,
except such as would not reasonably be expected to have a material
adverse effect on the Buyer's ability to perform its obligations under
this Agreement;
(b) Buyer shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement
to be performed or complied with by the Buyer prior to or at the
Closing;
(c) Seller shall have been furnished with a certificate, dated
the Closing Date, executed by an officer of the Buyer certifying to the
fulfillment of the conditions specified in Sections 8.2(a) and 8.2(b)
hereof; and
(d) no provision of any Applicable Law shall prohibit, and
there shall not be in effect any injunction or restraining order issued
by a court of competent jurisdiction in any action or proceeding
against, the consummation of this Agreement.
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ARTICLE IX
ACTIONS TO BE TAKEN AT CLOSING
Section 9.1 Actions to be Taken by Seller at the Closing.
Seller shall take the following actions at the Closing:
(a) Seller shall deliver to Buyer copies certified by its
Secretary of resolutions duly adopted by the boards of directors of
Seller and each Subsidiary authorizing and approving the execution and
delivery of this Agreement, including the exhibits and schedules hereto,
and the consummation of the transactions contemplated herein;
(b) Seller shall execute and deliver to Buyer a ▇▇▇▇ of sale
and deeds, assignments and any other necessary instruments, satisfactory
in form and content and approved prior to Closing by Buyer, conveying
the Shares and assets of each Subsidiary (other than Excluded Assets) to
Buyer;
(c) Seller shall deliver the officer's certificate referred to
in Section 8.1(c);
(d) Buyer shall have been furnished with a legal opinion as
provided in Section 8.1(g) hereof; and
(e) Seller shall have delivered to Buyer a letter of
resignation from each noncontinuing officer and director of each
Subsidiary.
Section 9.2 Actions to be Taken by Buyer at the Closing. Buyer
shall take the following actions at the Closing:
(a) Buyer shall deliver to Seller a copy certified by its
Secretary of resolutions duly adopted by the board of directors of Buyer
authorizing and approving the execution and
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delivery of this Agreement, including the exhibits and schedules hereto,
and the consummation of the transactions contemplated herein;
(b) Buyer shall make the payment of funds specified for
payment at Closing under Sections 2.2 and 2.3 above; and
(c) Buyer shall deliver the officer's certificate referred to
in Section 8.2(c).
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Closing:
(i) by mutual written agreement executed by the Seller
and the Buyer; or
(ii) if the Board of Directors of the Seller in the
exercise of its fiduciary duties under applicable laws as advised
in writing by counsel withdraws or modifies its approval or
recommendation of the proposed acquisition of Shares by the Buyer
on the terms and conditions set forth herein in any manner
adverse to Buyer and recommends or approves a Competing
Transaction, or resolves to do the foregoing. For purposes of
this Agreement, "Competing Transaction" shall mean any merger,
consolidation, share exchange, business combination or similar
transaction involving any of the Subsidiaries, or the acquisition
in any manner, directly or indirectly, of a material interest in
any voting securities of, or a material interest in a substantial
portion of the assets of, any of the Subsidiaries, other than the
transactions contemplated by this Agreement.
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(b) Upon termination of this Agreement, neither of the parties
nor any other person shall have any liability or further obligation
arising out of this Agreement except for any liability resulting from
its breach of this Agreement prior to termination and as stated in
Section 10.1(c) hereof, except that the provisions of Sections 10.2,
10.3, 10.9 and 10.11 shall continue to apply.
(c) In the event Seller terminates this Agreement pursuant to
Section 10.1(a)(ii) hereof and enters into a Competing Transaction on or
before March 31, 1997, Seller shall reimburse Buyer for its reasonable
costs related to Buyer's proposed acquisition of the Shares, not to
exceed $250,000.
Section 10.2 Confidentiality; Publicity; Books and Records.
(a) For three years, neither party nor any Affiliate thereof
will, directly or indirectly, disclose or provide to any other person
any non-public information of a confidential nature concerning the other
party or their business or operations, and neither Seller nor any
Affiliate thereof will directly or indirectly, disclose or provide to
any other person any non-public information of a confidential nature
concerning any Subsidiary or their business or operations, except as is
required in governmental filings or judicial, administrative or
arbitration proceedings. In the event that a party or its Affiliate
becomes legally required to disclose any such information in any
governmental filings or judicial, administrative or arbitration
proceedings, that party shall, and shall cause such Affiliate to,
provide the other party with prompt notice of such requirement so that
the other party may seek a protective order or other appropriate remedy.
In the event that such protective order or other remedy is not obtained,
the disclosing party shall, and shall cause such Affiliate to, furnish
only that portion of the information that the disclosing party or
such Affiliate, as the
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case may be, is advised by its counsel is legally required and such
disclosure shall not result in any liability hereunder unless such
disclosure was caused by or resulted from a previous disclosure by the
other party which was not permitted by this Agreement, by that certain
Confidentiality Agreement between the parties dated as of April 18, 1995
or that certain Confidentiality Agreement between the parties dated as
of January 24, 1996. Subject to applicable securities law or stock
exchange requirements, the parties hereto will promptly advise, and
obtain the approval of, the other parties before issuing any press
release with respect to this Agreement or the transactions contemplated
hereby.
(b) If the parties fail to close the acquisition of
Shares contemplated in this Agreement, each party shall, and shall cause
its officers, directors, employees, representatives and agents (the
"Representatives") to return all copies of the other party's
confidential non-public information in its possession or in the
possession of its Representatives, and destroy all copies of any
analyses, compilations, studies or other documents prepared by that
party or its Representatives or for its use containing or reflecting any
such information.
For purposes of this Agreement, non-public information of a
confidential nature shall not include any information which (i) at the
time of disclosure or thereafter is generally available to and known by
the public (other than as a result of a disclosure directly or
indirectly by a party, its Affiliate or its Representatives), (ii) was
available to a party on a nonconfidential basis from a source other than
the other party, its Affiliate or Representatives, provided that such
source is not and was not directly or indirectly bound by a
confidentiality agreement with the nondisclosing party, its Affiliate or
Representatives with respect to that information, or (iii) has been
independently acquired or developed by the other
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party, its Affiliate or Representatives, without violating any
obligations under this agreement, that certain Confidentiality Agreement
between the parties dated as of April 18, 1995 or that certain
Confidentiality Agreement between the parties dated as of January 24,
1996.
(c) For a period of five years after the Closing Date, Buyer
will preserve and retain the books and records of each Subsidiary and
make such books and records available at the then current administrative
headquarters of Buyer to Seller and its officers, employees and agents,
upon reasonable notice and at reasonable times, at Seller's cost and
expense, it being understood that Seller shall be entitled to make
copies of any such books and records as shall be reasonably necessary.
Section 10.3 Expenses. Buyer and Seller shall pay their own
respective expenses, including the fees and disbursements of their respective
counsel in connection with the negotiation, preparation and execution of this
Agreement and the consummation of the transactions contemplated herein. Seller
shall be solely responsible for paying all fees and expenses of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates.
Section 10.4 Entire Agreement. This Agreement, including all
schedules and exhibits hereto, constitutes the entire agreement of the parties
and supersedes any prior oral or written agreements with respect to the subject
matter hereof, and may not be modified, amended or terminated except by a
written instrument specifically referring to this Agreement signed by all the
parties hereto.
Section 10.5 Waivers and Consents. All waivers and consents
given hereunder shall be in writing. No waiver by any party hereto of any
breach or anticipated breach of any
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provision hereof by any other party shall be deemed a waiver of any other
contemporaneous, preceding or succeeding breach or anticipated breach, whether
or not similar.
Section 10.6 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been received only if
and when (a) personally delivered (b) if mailed, on the third day after
mailing, by United States mail, first class, postage prepaid, by certified
mail, return receipt requested, addressed in each case as follows (or to such
other address as may be specified by like notice) or (c) delivered by overnight
courier or facsimile:
(i) if to Buyer, to:
NDE Environmental Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇. ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
(ii) if to Seller, to:
Tanknology Environmental, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
Section 10.7 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, legal representatives and assigns. No third party shall
have any rights hereunder. No assignment shall release the assigning party.
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Section 10.8 Performance. Seller agrees to cause each
Subsidiary to perform all its obligations and agreements under this Agreement
and hereby guarantees performance by each Subsidiary of all such obligations
and agreements.
Section 10.9 Choice of Law; Section Headings; Table of Contents.
This Agreement shall be governed by the internal laws of the State of Texas
(without regard to the choice of law provisions thereof). The section headings
and any table of contents contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
Section 10.10 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
Section 10.11 Jurisdiction and Venue. Seller and Buyer hereby
consent to personal jurisdiction in any action brought with respect to this
Agreement and the transactions contemplated hereunder in any federal or state
court in ▇▇▇▇▇▇ County, Texas and agree that service of process may be
accomplished pursuant to Section 10.6 above.
Section 10.12 Severability. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which shall remain in
full force and effect.
Section 10.13 Assignment. This Agreement and each party's rights
hereunder may not be assigned without the prior written consent of the other
parties; provided that no such consent shall be required by Buyer or Seller to
assign all or part of its rights to a subsidiary or Affiliate but no such
assignment shall relieve the assigning party of any of its obligations under
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
NDE ENVIRONMENTAL CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Title: Chairman of the Board
---------------------------
TANKNOLOGY ENVIRONMENTAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Title: President
---------------------------
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