AGREEMENT AND PLAN OF MERGER
Exhibit 10.2
This Agreement And Plan Of Merger (“Agreement”) is made as of November 30, 2006, by Xxxxxxxx
Industries, Inc., an Oklahoma corporation (“Xxxxxxxx”), Xxxxxxxx Merger, Inc., an Oklahoma
corporation and a wholly-owned subsidiary of Xxxxxxxx (“Merger Sub”), and Xxxxx Xxxxxxxx
Associates, Inc., a Minnesota corporation (the “Company”), and Xxxxx Xxxxxxxx, an individual
resident in Minnesota (the “Company Shareholder”).
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in accordance with the
Oklahoma General Corporation Act (the “OGCA”), Xxxxxxxx and the Company intend to enter
into a business combination transaction by means of a merger between Merger Sub and the Company in
which the Company will merge with and into Merger Sub, and Merger Sub will be the surviving entity
and a wholly owned subsidiary of Xxxxxxxx, through an exchange of all the issued and outstanding
shares of capital stock of the Company for shares of common stock of Xxxxxxxx and cash.
B. The Boards of Directors of each of the Company, Parent and Merger Sub have determined that
the Merger (as defined in Section 1.1) is fair to, and in the best interests of, their respective
companies and their respective stockholders.
C. The parties intend, by executing this Agreement, to adopt a plan of reorganization within
the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “Code”).
NOW, THEREFORE, in consideration of the covenants, promises and representations set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. Definitions. For purposes of this Agreement, the following terms have the meanings specified or referred
to in this Section 1:
“Adjustments”—as set forth in Section 2.5.
“Applicable Contract”—any Contract (a) under which the Company has or may acquire any
rights, (b) under which the Company has or may become subject to any obligation or liability, or
(c) by which the Company or any of the assets owned or used by it is or may become bound.
“Balance Sheet”—as defined in Section 3.4.
“Best Efforts”—the efforts that a prudent Person desirous of achieving a result would
use in similar circumstances to ensure that such result is achieved as expeditiously as possible.
“Breach”—a “Breach” of a representation, warranty, covenant, obligation, or other
provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed
to have occurred if there is or has been (a) any material inaccuracy in or material breach of, or
any material failure to perform or comply with, such representation, warranty, covenant,
obligation, or other provision, or (b) any claim (by any Person) or other occurrence or
circumstance that is or was materially inconsistent with such representation, warranty, covenant,
obligation, or other provision, and the term “Breach” means any such inaccuracy, breach, failure,
claim, occurrence, or circumstance.
“Xxxxxxxx”—as defined in the first paragraph of this Agreement.
“Xxxxxxxx Shares”—as defined in Section 3.2(d).
“Closing”—as defined in Section 2.3.
“Closing Date”—the date and time as of which the Closing actually takes place.
“Company”—as defined in the first paragraph of this Agreement.
“Company Shareholder”—as defined in the Recitals of this Agreement.
“Consent”—any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).
“Contemplated Transactions”—all of the transactions contemplated by this Agreement,
including the merger of the Company with and into Merger Sub
(a) the execution, delivery, and performance of the Employment Agreement, the Non-competition
Agreement and the Escrow Agreement; and
(b) the performance by Xxxxxxxx and Company of their respective covenants and obligations
under this Agreement.
“Contract”—any agreement, contract, obligation, promise, or undertaking (whether
written or oral and whether express or implied) that is legally binding.
“Damages”—as defined in Section 10.2.
“Employment Agreements”—as defined in Section 2.4(a)(iii).
“Encumbrance”—any charge, claim, community property interest, condition, equitable
interest, lien, option, pledge, security interest, right of first refusal, or restriction of any
kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
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“Environment”—soil, land surface or subsurface strata, surface waters (including
navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters,
drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life,
and any other environmental medium or natural resource.
“Environmental, Health, and Safety Liabilities”—any cost, damages, expense,
liability, obligation, or other responsibility arising from or under Environmental Law or
Occupational Safety and Health Law and consisting of or relating to:
(a) any environmental, health, or safety matters or conditions (including on-site or off-site
contamination, occupational safety and health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or administrative proceedings,
damages, losses, claims, demands and response, investigative, remedial, or inspection costs and
expenses arising under Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational Safety and Health Law for
cleanup costs or corrective action, including any investigation, cleanup, removal, containment, or
other remediation or response actions (“Cleanup”) required by applicable Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by
any Governmental Body or any other Person) and for any natural resource damages; or
(d) any other compliance, corrective, investigative, or remedial measures required under
Environmental Law or Occupational Safety and Health Law.
The terms “removal,” “remedial,” and “response action,” include the types of activities
covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. § 9601 et seq., as amended (“CERCLA”).
“Environmental Law”—any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees, and the public of intended or actual releases
of pollutants or hazardous substances or materials, violations of discharge limits, or other
prohibitions and of the commencements of activities, such as resource extraction or construction,
that could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of pollutants or hazardous
substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and used so that they do not
present unreasonable risks to human health or the Environment when used or disposed of;
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(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil, or other potentially harmful substances;
(g) cleaning up pollutants that have been released, preventing the threat of release, or
paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of them, for damages done to
their health or the Environment, or permitting self-appointed representatives of the public
interest to recover for injuries done to public assets.
“ERISA”—the Employee Retirement Income Security Act of 1974 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
“Escrow Agreement”—as defined in Section 2.4.
“Facilities”—any real property, leaseholds, or other interests currently owned or
operated by the Company and any buildings, plants, structures, or equipment (including motor
vehicles, tank cars, and rolling stock) currently owned or operated by the Company.
“GAAP”—generally accepted United States accounting principles, applied on a basis
consistent with the basis on which the Balance Sheet and the other financial statements referred to
in Section 3.4(b) were prepared.
“Governmental Authorization”—any approval, consent, license, permit, waiver, or other
authorization issued, granted, given, or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
“Governmental Body”—any:
(a) nation, state, county, city, town, village, district, or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature.
“Hazardous Activity”—the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release, storage, transfer, transportation,
treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in,
on, under, about, or from the Facilities or any part thereof into the
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Environment, and any other act, business, operation, or thing that increases the danger, or
risk of danger, or poses an unreasonable risk of harm to persons or property on or off the
Facilities, or that may materially affect the value of the Facilities or the Company.
“Hazardous Materials”—any waste or other substance that is listed, defined,
designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a
pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or
solution thereof, and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.
“Intellectual Property Assets” —as defined in Section 3.22.
“Interim Balance Sheet”—as defined in Section 3.4.
“IRC”—the Internal Revenue Code of 1986 or any successor law, and regulations issued
by the IRS pursuant to the Internal Revenue Code or any successor law.
“IRS”—the United States Internal Revenue Service or any successor agency, and, to the
extent relevant, the United States Department of the Treasury.
“Knowledge”— means actual knowledge or awareness as to a specified fact or event
of a Person that is an individual or of an executive officer or director of a Person that
is a corporation or of a Person in a similar capacity of an entity other than a
corporation, or a prudent Person could be expected to discover or otherwise become aware of
such fact or other matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter.
“Legal Requirement”—any federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute, or treaty.
“Occupational Safety and Health Law”—any Legal Requirement designed to provide safe
and healthful working conditions and to reduce occupational safety and health hazards.
“Order”—any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.
“Ordinary Course of Business”—an action taken by a Person will be deemed to have been
taken in the “Ordinary Course of Business” only if:
(a) such action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person;
(b) such action is not required to be authorized by the board of directors of such Person (or
by any Person or group of Persons exercising similar authority); and
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(c) such action is similar in nature and magnitude to actions customarily taken, without any
authorization by the board of directors (or by any Person or group of Persons exercising similar
authority), in the ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
“Organizational Documents”—(a) the articles or certificate of incorporation and the
bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a
general partnership; (c) the limited partnership agreement and the certificate of limited
partnership of a limited partnership; (d) any charter or similar document adopted or filed in
connection with the creation, formation, or organization of a Person; and (e) any amendment to any
of the foregoing.
“Person”—any individual, corporation (including any non-profit corporation), general
or limited partnership, limited liability company, joint venture, estate, trust, association,
organization, labor union, or other entity or Governmental Body.
“Plan”—as defined in Section 3.13.
“Proceeding”—any action, arbitration, audit, hearing, investigation, litigation, or
suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.
“Related Person”—with respect to a particular individual:
(d) each other member of such individual’s Family;
(e) any Person that is directly or indirectly controlled by such individual or one or more
members of such individual’s Family;
(f) any Person in which such individual or members of such individual’s Family hold
(individually or in the aggregate) a Material Interest; and
(g) any Person with respect to which such individual or one or more members of such
individual’s Family serves as a director, officer, partner, executor, or trustee (or in a similar
capacity).
With respect to a specified Person other than an individual:
(h) any Person that directly or indirectly controls, is directly or indirectly controlled by,
or is directly or indirectly under common control with such specified Person;
(i) any Person that holds a Material Interest in such specified Person;
(j) each Person that serves as a director, officer, partner, executor, or trustee of such
specified Person (or in a similar capacity);
(k) any Person in which such specified Person holds a Material Interest;
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(l) any Person with respect to which such specified Person serves as a general partner or a
trustee (or in a similar capacity); and
(m) any Related Person of any individual described in clause (b) or (c).
For purposes of this definition, (a) the “Family” of an individual includes (i) the
individual, (ii) the individual’s spouse, (iii) any other natural person who is related to the
individual or the individual’s spouse within the second degree, and (iv) any other natural person
who resides with such individual, and (b) “Material Interest” means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of voting securities
or other voting interests representing at least 5% of the outstanding voting power of a Person or
equity securities or other equity interests representing at least 10% of the outstanding equity
securities or equity interests in a Person.
“Release”—any spilling, leaking, emitting, discharging, depositing, escaping,
leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.
“Representative”—with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, or other representative of such Person, including legal
counsel, accountants, and financial advisors.
“Securities Act”—the Securities Act of 1933 or any successor law, and regulations and
rules issued pursuant to that Act or any successor law.
“Shares”—as defined in the Recitals of this Agreement.
“Subsidiary”—with respect to any Person (the “Owner”), any corporation or other
Person of which securities or other interests having the power to elect a majority of that
corporation’s or other Person’s board of directors or similar governing body, or otherwise having
the power to direct the business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference
to a particular Person, “Subsidiary” means a Subsidiary of the Company.
“Tax Return”—any return (including any information return), report, statement,
schedule, notice, form, or other document or information filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.
“Threat of Release”—a substantial likelihood of a Release that may require action in
order to prevent or mitigate damage to the Environment that may result from such Release.
“Threatened”—a claim, Proceeding, dispute, action, or other matter will be deemed to
have been “Threatened” if any demand or statement has been made (orally or in writing) or any
notice has been given (orally or in writing), or if any other event has occurred or any other
circumstances exist, that would lead a prudent Person to conclude that such a claim,
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Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.
2. The Merger; Closing.
2.1
The Merger. At the Effective Time (as defined in Section 2.2) and subject to and upon the terms and
conditions of this Agreement and the applicable provisions of the OGCA, the Company shall be merged
with and into Merger Sub (the “Merger”), the separate corporate existence of the Company
shall cease and Merger Sub shall continue as the surviving corporation. Merger Sub as the
surviving corporation after the Merger is hereinafter sometimes referred to as the “Surviving
Corporation.”
2.2 Effective Time; Closing. Subject to the conditions of this Agreement, the parties hereto shall cause the Merger to be
consummated by filing with the Secretaries of State of the States of Oklahoma an Minnesota in
accordance with the relevant provisions of the OGCA and the Minnesota Business Corporation Act a
Certificate of Merger (the “Certificate of Merger”) (the time of such filing with the
Secretary of State of the State of Oklahoma, or such later time as may be agreed in writing by
Company and Parent and specified in the Certificate of Merger, being the “Effective Time”)
as soon as practicable on or after the Closing Date (as herein defined). The term
“Agreement” as used herein refers to this Agreement and Plan of Merger, as the same may be
amended from time to time. Unless this Agreement shall have been terminated pursuant to Sections
9, the closing of the Merger (the “Closing”) shall take place at the offices of McAfee &
Xxxx A Professional Corporation, at a time and date to be specified by the parties, which shall be
no later than the second business day after the satisfaction or waiver of the conditions set forth
in Sections 7 and 8, or at such other time, date and location as the parties hereto agree in
writing (the “Closing Date”). Closing signatures may be transmitted by facsimile.
2.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the
applicable provisions of the OGCA. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the
Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
2.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of the Merger
Sub, a copy of which is attached hereto as Exhibit A, shall be the Certificate of
Incorporation of the Surviving Corporation.
(b) Also at the Effective Time, the Bylaws of the Merger Sub, a copy of which is attached
hereto as Exhibit B, shall be the Bylaws of the Surviving Corporation.
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2.5 Effect on Capital Stock. Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the
Merger and this Agreement and without any action on the part of Xxxxxxxx, Merger Sub, the Company
or the the Company Shareholder, the following shall occur:
(a) Conversion of Company Common Stock. Other than any shares to be canceled
pursuant to Section 2.5(c), each share of capital stock of the Company (“Shares”) issued and
outstanding immediately prior to the Effective Time will be automatically converted (subject
to Section 2.5(f)) into the right to receive on the Closing :
(i) a number of shares of common stock of Xxxxxxxx equal to $2,000,000
divided by the average of the closing sales prices for the 30 trading days
preceding the Closing Date (but not less than $1.00) ;
(ii) the sum of One Hundred Fifty Thousand Dollars ($150,000) to the
escrow agent pursuant to the Escrow Agreement in the form attached
hereto as Exhibit _____ by bank cashier’s or certified check along;
(iii) One Million Eight Hundred Fifty Thousand Dollars ($1,850,000) by bank cashier’s or
certified check payable to the order of, or by wire transfer to accounts specified by, Company
Shareholder,
(iv) the right to receive a number of shares of common stock of Xxxxxxxx
equal to Two Million Five Hundred Sixty Five Thousand Dollars $2,565,000
divided by the average of the closing sales prices for the 30 trading days
preceding the date of issuance of the certificates (but not less than
$1.00), subject to adjustment as set forth in below. Subject to the
adjustments as set forth below, certificates for the additional shares shall
be issued on January 10 of each of the years as follows. 2007 $1,166,667,
2008 $231,666 and 2009 $1,166,667.
Adjustment Procedure.
Share payments under Subsection (a)(iii) above to be made upon the achievement of
the following sales targets with historically comparable gross margins:
2007 | $24,000,000 above current Xxxxxxxx Restoration Divisional revenue of $7,500,000 | ||
2008 | 10% increase over combined previous year for Xxxxxxxx Division |
Partial payment may be earned for each period as follows:
$2,000,000 short of goal pays 75% of total
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$2,000,001 to $4.000,000 short of goal pays 50% of total
$4,000,001 to $6,000,000 short of goal pays 25% of total
(b) Certificates for Shares. Subject to Section 2.5(a)(iv), the amount of
cash and certificates representing the shares of Xxxxxxxx Common Stock issuable with
respect to certificates for shares of Company Common Stock (“Certificates”) shall be issued
to the holders of the shares of Company Common Stock upon surrender of the Certificates
representing such shares in the manner provided in Section 2.6 (or in the case of a lost,
stolen or destroyed certificate, upon delivery of an affidavit in the manner provided in
Section 2.8).
(c) Adjustments to Exchange Ratios. Subject to Section 2.5(a)(iv), the numbers of
Xxxxxxxx Common Stock and amounts of cash that the holders of the Company Common Stock are
entitled to receive as a result of the Merger shall be equitably adjusted to reflect
appropriately the effect of any stock split, reverse stock split, stock dividend (including
any dividend or distribution of securities convertible into Xxxxxxxx Common Stock or
Company Common Stock), extraordinary cash dividends, reorganization, recapitalization,
reclassification, combination, exchange of shares or other like change with respect to
Xxxxxxxx Common Stock or Company Common Stock occurring on or after the date hereof and
prior to the Effective Time.
2.6 Surrender of Certificates.
(a) Exchange Procedures. Upon surrender of Certificates at the Closing, the
holders of such Certificates shall receive in exchange therefore such amounts of cash and
certificates representing the number of shares of Parent Common Stock into which their shares of Company Common Stock shall be converted at the Effective Time, and the
Certificates so surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed, from and after the Effective Time, to evidence only the right
to receive the applicable amount of cash and number of shares of Parent Common Stock
issuable pursuant to Section 1.6(a).
(b) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the date of this Agreement with respect to Parent
Common Stock with a record date after the Effective Time will be paid to the holders of any
unsurrendered Certificates with respect to the shares of Parent Common Stock to be issued
upon surrender thereof until the holders of record of such Certificates shall surrender
such Certificates. Subject to applicable law, following surrender of any such Certificates,
Xxxxxxxx shall promptly deliver to the record holders thereof, without interest, the cash
and certificates representing shares of Xxxxxxxx Common Stock issued
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in exchange therefor and the amount of any such dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to such shares of
Parent Common Stock.
(c) Required Withholding. Each of Xxxxxxxx and the Surviving Corporation shall be
entitled to deduct and withhold from any consideration payable or otherwise deliverable
pursuant to this Agreement to any holder or former holder of Company Common Stock such
amounts as are required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax law or under any other applicable legal
requirement. To the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the person to whom
such amounts would otherwise have been paid.
(d) No Liability. Notwithstanding anything to the contrary in this Section 2.6,
neither Xxxxxxxx, the Surviving Corporation, the Company nor any party hereto shall be
liable to a holder of shares of Parent Common Stock or Company Common Stock for any amount
properly paid to a public official pursuant to any applicable abandoned property, escheat
or similar law.
2.7 No Further Ownership Rights in Company Stock. All cash and shares of Parent
Common Stock issued in accordance with the terms hereof shall be deemed to have been issued in
full satisfaction of all rights pertaining to such shares of Company Common Stock and there shall
be no further registration of transfers on the records of the Surviving Corporation of shares of
Company Common Stock that were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article I.
2.7 Tax Consequences. It is intended by the parties hereto that the Merger shall constitute a reorganization within
the meaning of Section 368 of the Code. The parties hereto adopt this Agreement as a “plan of
reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
Income Tax Regulations.
2.8 Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges, powers and franchises of the
Company and Merger Sub, the officers and directors of the Company and Merger Sub will take all such
lawful and necessary action.
2.9 Rule 145. All shares of Parent Common Stock issued pursuant to this Agreement
be subject to certain resale restrictions under Rule 145 promulgated under the Securities Act and
all certificates representing such shares shall bear an appropriate restrictive legend.
2.10 Stockholder Matters.
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(a) By his execution of this Agreement, Company Stockholder, in his capacity as a
stockholder of the Company, hereby approves and adopts this Agreement and authorizes the
Company, its directors and officers to take all actions necessary for the consummation of
the Merger and the other transactions contemplated hereby pursuant to the terms of this
Agreement and its exhibits. Such execution shall be deemed to be action taken by the
irrevocable written consent of each Stockholder for purposes of Section 302A.441, Minnesota
Statutes 2006.
(b) Company Stockholder represents and warrants as follows: (i) all Xxxxxxxx Common
Stock to be acquired by Company Stockholder pursuant to this Agreement will be acquired for
his account and not with a view towards distribution; (ii) he understands that he must bear
the economic risk of the investment in the Xxxxxxxx Common Stock, which cannot be sold by
him unless it is registered under the Securities Act, or an exemption therefrom is available
thereunder; (iii) he, has had both the opportunity to ask questions and receive answers from
the officers and directors of Xxxxxxxx and all persons acting on Xxxxxxxx’x behalf
concerning the business and operations of Xxxxxxxx and to obtain any additional information
to the extent Xxxxxxxx possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of such information; and
(iv) he has had access to the Xxxxxxxx SEC Reports filed prior to the date of this
Agreement. Company Stockholder acknowledges that (v) he is an “accredited investor” as such
term is defined in Rule 501(a) promulgated under the Securities Act and (vi) he understands
that the certificates representing the Xxxxxxxx Common Stock to be received by him may bear
a legend to the effect that the Xxxxxxxx Common Stock may not be transferred except upon
compliance with the registration requirements of the Securities Act (or an exemption
therefrom).
2.11 Closing. The closing of the Contemplated Transactions (the “Closing”) will
take place at the offices of Xxxxxxxx’x counsel at Two Leadership Square, 10th Floor,
Oklahoma City, Oklahoma 73102, or at other places as agreed to at 10:00 a.m. (local time) on
December ___, 2006. Subject to the provisions of Section 9, failure to consummate the purchase and
sale provided for in this Agreement on the date and time and at the place determined pursuant to
this Section 2.11 will not result in the termination of this Agreement and will not relieve any
party of any obligation under this Agreement.
2.12 Closing Obligations. At the Closing:
(a) The Company and the Company Stockholder will deliver or cause to be delivered to
Xxxxxxxx all certificates, instruments and documents required by this Agreement, including but not
limited to:
(i) an employment agreement in the form attached hereto executed by the Company Shareholder
(the “Employment Agreement”);
(ii) a certificate executed by the Company and the Company Stockholder representing and
warranting to Xxxxxxxx that each of the Company’s and the Company’s Stockholder representations and
warranties in this Agreement was accurate in all
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respects as of the date of this Agreement and is accurate in all respects as of the Closing
Date as if made on the Closing Date; and
(iii) a Non-competition Agreement in the form attached hereto.
(b) Xxxxxxxx will deliver to the Company or the Company Shareholder as the case may be:
(i) a certificate executed by Xxxxxxxx to the effect that, except as otherwise stated in such
certificate, each of Xxxxxxxx’x representations and warranties in this Agreement was accurate in
all respects as of the date of this Agreement and is accurate in all respects as of the Closing
Date as if made on the Closing Date; and
(ii) the Employment Agreement, executed by Xxxxxxxx.
(iii) Xxxxxxxx and the Company will enter into an escrow agreement in a form acceptable to
Xxxxxxxx and the Company (the “Escrow Agreement”) with Bank of Oklahoma.
3. Representations and Warranties of the Company and the Company Shareholder. The
Company and the Company Shareholder represent and warrant to Xxxxxxxx as follows:
3.1 Organization And Good Standing.
(c) The Company is a corporation duly organized, validly existing, and in good standing under
the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct
its business as it is now being conducted, to own or use the properties and assets that it purports
to own or use, and to perform all its obligations under Applicable Contracts. The Company is duly
qualified to do business as a foreign corporation and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of the properties owned or used by
it, or the nature of the activities conducted by it, requires such qualification.
(d) The Company has delivered to Xxxxxxxx copies of the Organizational Documents of the
Company, as currently in effect.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation of the Company and the
Company Stockholder, enforceable against the Company and the Company Stockholder in accordance with
its terms. Upon the execution and delivery by Company and the Company Stockholder of the Escrow
Agreement the Non-Competition Agreement and the Employment Agreement (collectively, the “Company’s
and the Company Stockholder’s Closing Documents”), the Company’s and the Company Stockholder’s
Closing Documents will constitute the legal, valid, and binding obligations of the Company and the
Company Stockholder’s, enforceable against the Company and the Company Stockholder in accordance
with their respective terms. The Company and the Company Stockholder has the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the
13
Company’s and the Company Stockholder’s Closing Documents and to perform its obligations
under this Agreement and the Company’s and the Company Stockholder’s Closing Documents.
(b) Except as otherwise noted herein, neither the execution and delivery of this Agreement nor
the consummation or performance of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A) any provision of the
Organizational Documents of the Company, or (B) any resolution adopted by the board of directors or
the stockholders of the Company;
(ii) contravene, conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy
or obtain any relief under, any Legal Requirement or any Order to which the Company or any of the
assets owned or used by the Company, may be subject;
(iii) contravene, conflict with, or result in a violation of any of the terms or requirements
of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Governmental Authorization that is held by the Company or that otherwise relates to the
business of, or any of the assets owned or used by, the Company;
(iv) cause Xxxxxxxx or the Company to become subject to, or to become liable for the payment
of, any Tax;
(v) cause any of the assets owned by the Company to be reassessed or revalued by any taxing
authority or other Governmental Body;
(vi) contravene, conflict with, or result in a violation or breach of any provision of, or
give any Person the right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract; or
(vii) result in the imposition or creation of any Encumbrance upon or with respect to any of
the assets owned or used by the Company.
Neither the Company Shareholder nor the Company is or will be required to give any notice to
or obtain any Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated Transactions. Failure to
obtain will cause a material adverse effect.
3.3 Capitalization. The Shares constitute all of the issued and
outstanding capital stock of the Company. The Company Shareholder is and will be on
the Closing Date the record and beneficial owner and holder of the Shares, free and
clear of all Encumbrances No legend or other reference to any purported
Encumbrance appears upon any certificate representing the Shares. All of the Shares
have been duly authorized and validly issued and are fully paid and nonassessable.
There are no Contracts relating to the issuance, sale, or transfer of any of the
Shares. None of the Shares was issued in violation of the Securities Act or any
other
14
Legal Requirement. The Company does not own, or have any Contract to acquire, any equity
securities or other securities of any Person or any direct or indirect equity or ownership interest
in any other business.
3.4 Financial Statements. The Company has delivered to Xxxxxxxx: audited consolidated
balance sheets of the Company as at March 31, 2006 (including the notes thereto, the “Balance
Sheet”) and in each of the years 2003 through 2005, and the related audited consolidated
statements of income, changes in stockholders’ equity, and cash flow for each of the fiscal years
then ended, together with the report thereon of Xxxx, Xxxxxx & Xxxxxxx Ltd., independent certified
public accountants, and (b) an unaudited consolidated balance sheet of the Acquired Companies as at
September 30, 2006 (the “Interim Balance Sheet”) and the related unaudited consolidated statements
of income, changes in stockholders’ equity, and cash flow for the six months then ended, including
in each case the notes thereto. Such financial statements and notes fairly present the financial
condition and the results of operations, changes in stockholders’ equity, and cash flow of the
Company as at the respective dates of and for the periods referred to in such financial statements,
all in accordance with GAAP, subject, in the case of interim financial statements, to normal
recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be
materially adverse) and the absence of notes (that, if presented, would not differ materially from
those included in the Balance Sheet); the financial statements referred to in this Section 3.4
reflect the consistent application of such accounting principles throughout the periods involved,
except as disclosed in the notes to such financial statements. No financial statements of any
Person other than the Company is required by GAAP to be included in the consolidated financial
statements of the Company.
3.5 Books and Records. The books of account, minute books, stock record books, and
other records of the Company, all of which have been made available to Xxxxxxxx, are complete and
correct and have been maintained in accordance with sound business practices. At the Closing, all
of those books and records will be in the possession of the Company.
3.6 Title to Properties; Encumbrances. The Company owns (subject only to the matters
permitted by the following sentence) all the properties and assets (whether tangible or intangible)
that they purport to own located in the facilities owned or operated by the Company or reflected as
owned in the books and records of the Company, including all of the properties and assets reflected
in the Balance Sheet and the Interim Balance Sheet (except for assets held under capitalized leases
and personal property sold since the date of the Balance Sheet and the Interim Balance Sheet, as
the case may be, in the Ordinary Course of Business.) All material properties and assets reflected
in the Balance Sheet and the Interim Balance Sheet are free and clear of all Encumbrances except
(a) security interests shown on the Balance Sheet or the Interim Balance Sheet as securing
specified liabilities or obligations, with respect to which no default (or event that, with notice
or lapse of time or both, would constitute a default) exists, and (b) security interests incurred
in connection with the purchase of property or assets after the date of the Interim Balance Sheet
(such security interests being limited to the property or assets so acquired), with respect to
which no default (or event that, with notice or lapse of time or both, would constitute a default)
exists.
3.7 Condition and Sufficiency of Assets. The equipment of the Company is in good
operating condition and repair, and is adequate for the uses to which it is being put, and
15
none of such equipment is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The building, plants, structures,
and equipment owned or used by the Company are sufficient for the continued conduct of the
Company’s businesses after the Closing in substantially the same manner as conducted prior to the
Closing.
3.8 Accounts Receivable. All accounts receivable of the Company that are reflected on the Balance Sheet or the
Interim Balance Sheet or on the accounting records of the Company as of the Closing Date
(collectively, the “Accounts Receivable”) represent or will represent valid obligations arising
from sales actually made or services actually performed in the Ordinary Course of Business. Unless
paid prior to the Closing Date, the Accounts Receivable are or will be as of the Closing Date
considered current and collectible net of the respective reserves shown on the Balance Sheet or the
Interim Balance Sheet or on the accounting records of the Company as of the Closing Date (which
reserves are adequate and calculated consistent with past practice and, in the case of the reserve
as of the Closing Date, will not represent a greater percentage of the Accounts Receivable as of
the Closing Date than the reserve reflected in the Interim Balance Sheet represented of the
Accounts Receivable reflected therein and will not represent a material adverse change in the
composition of such Accounts Receivable in terms of aging). There is no contest, claim, or right
of set-off, other than returns in the Ordinary Course of Business, under any Contract with any
obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable.
3.9 Inventory. All inventory of the Company, whether or not reflected in the Balance Sheet or the Interim
Balance Sheet, consists of a quality and quantity usable and salable in the Ordinary Course of
Business, except for obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Balance Sheet or the Interim Balance
Sheet or on the accounting records of the Company as of the Closing Date, as the case may be. All
inventories not written off have been priced at the lower of cost or market. The quantities of each
item of inventory (whether raw materials, work-in-process, or finished goods) are not excessive,
but are reasonable in the present circumstances of the Acquired Companies.
3.10 No Undisclosed Liabilities. To the best of the Company’s and the Company Shareholder’s Knowledge, the Company has no
liabilities or obligations except for liabilities or obligations reflected or reserved against in
the Balance Sheet or the Interim Balance Sheet and current liabilities incurred in the Ordinary
Course of Business since the respective dates thereof.
3.11 Taxes.
(a) The Company has filed or caused to be filed all Tax Returns that are or were required to be
filed by or with respect to any of them, either separately or as a member of a group of
corporations, pursuant to applicable Legal Requirements. The Company has delivered to Xxxxxxxx
copies of all such Tax Returns filed since 2003. The Company has paid, or made provision for the
payment of, all Taxes that have or may have become due pursuant to those Tax Returns or otherwise,
or pursuant to any assessment received by the Company Shareholder or the Company.
16
(b) Neither the Company Shareholder nor Company has given or been requested to give
waivers or extensions (or is or would be subject to a waiver or extension given by any other
Person) of any statute of limitations relating to the payment of Taxes of the Company or for which
the Company may be liable.
(c) The charges, accruals, and reserves with respect to Taxes on the books of the Company are
adequate (determined in accordance with GAAP) and are at least equal to the Company’s liability for
Taxes. There exists no proposed tax assessment against the Company except as disclosed in the
Balance Sheet. No consent to the application of Section 341(f)(2) of the IRC has been filed with
respect to any property or assets held, acquired, or to be acquired by the Company. All Taxes that
the Company is or was required by Legal Requirements to withhold or collect have been duly withheld
or collected and, to the extent required, have been paid to the proper Governmental Body or other
Person.
(d) All Tax Returns filed by (or that include on a consolidated basis) the Company are true,
correct, and complete. There is no tax sharing agreement that will require any payment by the
Company after the date of this Agreement. The Company is not, or within the five-year period
preceding the Closing Date has not been, an “S” corporation
3.12 No Material Adverse Change. Since the date of the Balance Sheet, there has not
been any material adverse change in the business, operations, properties, prospects, assets, or
condition of the Company, and no event has occurred or circumstance exists that may result in such
a material adverse change.
3.13 Employee Benefits.
(a) As used in this Section 3.13, the following terms have the meanings set forth below.
“Company Other Benefit Obligation” means an Other Benefit Obligation owed, adopted, or
followed by the Company or an ERISA Affiliate of an Acquired Company.
“Company Plan” means all Plans of which the Company or an ERISA Affiliate of the
Company is or was a Plan Sponsor, or to which the Company or an ERISA Affiliate of the Company
otherwise contributes or has contributed, or in which the Company or an ERISA Affiliate of the
Company otherwise participates or has participated. All references to Plans are to Company Plans
unless the context requires otherwise.
“ERISA Affiliate” means, with respect to the Company, any other person that, together
with the Company, would be treated as a single employer under IRC § 414.
“Multi-Employer Plan” has the meaning given in ERISA § 3(37)(A).
“Other Benefit Obligations” means all obligations, arrangements, or customary
practices, whether or not legally enforceable, to provide benefits, other than salary, as
compensation for services rendered, to present or former directors, employees, or agents, other
than obligations, arrangements, and practices that are Plans. Other Benefit Obligations
include consulting agreements under which the compensation paid does not depend upon the amount of
17
service rendered, sabbatical policies, severance payment policies, and fringe benefits within the
meaning of IRC § 132.
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
“Pension Plan” has the meaning given in ERISA § 3(2)(A).
“Plan” has the meaning given in ERISA § 3(3).
“Plan Sponsor” has the meaning given in ERISA § 3(16)(B).
“Qualified Plan” means any Plan that meets or purports to meet the requirements of
IRC § 401(a).
“Title IV Plans” means all Pension Plans that are subject to Title IV of ERISA, 29
U.S.C. § 1301 et seq., other than Multi-Employer Plans.
“Welfare Plan” has the meaning given in ERISA § 3(1).
(b) The Company or the Company Shareholder has delivered to Xxxxxxxx, or will deliver to
Xxxxxxxx within ten days of Xxxxxxxx’x written request therefor:
(i) to the extent they are in the Company’s’s or the Company Shareholder’s possession or under
the Company’s or the Company Shareholder’s control, all documents that set forth the terms of each
Company Plan and Company Other Benefit Obligation, and of any related trust, including (A) all plan
descriptions and summary plan descriptions of Company Plans for which the Company is required to
prepare, file, and distribute plan descriptions and summary plan descriptions, and (B) all
summaries and descriptions furnished to participants and beneficiaries regarding Company Plans and
Company Other Benefit Obligations for which a plan description or summary plan description is not
required;
(ii) to the extent they are in the Company’s or the Company Shareholder’s possession or under
the Company’s or the Company Shareholder’s control, all personnel, payroll, and employment manuals
and policies;
(iii) to the extent they are in the Company’s or the Company Shareholder’s possession or under
the Company’s or the Company Shareholder’s control, all collective bargaining agreements pursuant
to which contributions have been made or obligations incurred (including both pension and welfare
benefits) by the Company and the ERISA Affiliates of the Company, and all collective bargaining
agreements pursuant to which contributions are being made or obligations are owed by such entities;
(iv) a written description of any Company Plan or Company Other Benefit Obligation that is not
otherwise in writing;
18
(v) to the extent they are in the Company’s possession or under the Company’s control, all
registration statements filed with respect to any Company Plan;
(vi) to the extent they are in the Company’s possession or under the Company’s control, all
insurance policies purchased by or to provide benefits under any Company Plan;
(vii) to the extent they are in the Company’s possession or under the Company’s control, all
contracts with third party administrators, actuaries, investment managers, consultants, and other
independent contractors that relate to any Company Plan or Company Other Benefit Obligation;
(viii) to the extent they are in the Company’s possession or under the Company’s control, all
reports submitted within the four years preceding the date of this Agreement by third party
administrators, actuaries, investment managers, consultants, or other independent contractors with
respect to any Company Plan or Company Other Benefit Obligation;
(ix) to the extent they are in the Company’s or the Company Shareholder’s possession or under
the Company’s or the Company Shareholder’s control, all notifications to employees of their rights
under ERISA § 601 et seq. and IRC § 4980B;
(x) to the extent they are in the Company’s or the Company Shareholder’s possession or under
the Company’s or the Company Shareholder’s control, the Form 5500 filed in each of the most recent
three plan years with respect to each Company Plan, including all schedules thereto and the
opinions of independent accountants;
(xi) to the extent they are in the Company’s or the Company Shareholder’s possession or under
the Company’s or the Company Shareholder’s control, all notices that were given by the Company or
any ERISA Affiliate of the Company or any Company Plan to the IRS, the PBGC, or any participant or
beneficiary, pursuant to statute, within the four years preceding the date of this Agreement,
including notices that are expressly mentioned elsewhere in this Section 3.13;
(xii) to the extent they are in the Company’s or the Company Shareholder’s possession or under
te Company’s or the Company Shareholder’s control, all notices that were given by the IRS, the
PBGC, or the Department of Labor to the Company, any ERISA Affiliate of the Company, or any Company
Plan within the four years preceding the date of this Agreement;
(xiii) to the extent they are in the Company’s or the Company Shareholder’s possession or
under the Company’s or the Company Shareholder’s control, with respect to Qualified Plans, the most
recent determination letter for each Plan of the Company that is a Qualified Plan; and
(xiv) to the extent they are in the Company’s or the Company Shareholder’s possession or under
the Company’s or the Company Shareholder’s control, with respect to Title IV Plans, the Form
PBGC-1 filed for each of the three most recent plan years.
19
As to any of the requested items referenced in this subparagraph (b) that are not in the Company’s
possession or under the Company’s control, the Company and the Company Shareholder shall use their
best efforts to obtain and provide such items to Xxxxxxxx.
(c) As follows:
(i) The Company has performed all of its obligations under all Company Plans and Company Other
Benefit Obligations. The Company has made appropriate entries in its financial records and
statements for all obligations and liabilities under such Plans, and Obligations that have accrued
but are not due.
(ii) No statement, either written or oral, has been made by the Company to any Person with
regard to any Plan or Other Benefit Obligation that was not in accordance with the Plan or Other
Benefit Obligation and that could have an adverse economic consequence to the Company or to
Xxxxxxxx.
(iii) The Company, with respect to all Company Plans and Company Other Benefits Obligations,
is, and each Company Plan and Company Other Benefit Obligation is, in full compliance with ERISA,
the IRC, and other applicable Laws including the provisions of such Laws expressly mentioned in
this Section 3.13, and with any applicable collective bargaining agreement.
(A) No transaction prohibited by ERISA § 406 and no “prohibited transaction” under IRC §
4975(c) have occurred with respect to any Company Plan.
(B) Neither the Company Shareholder nor the Company has any liability to the IRS with respect
to any Plan, including any liability imposed by Chapter 43 of the IRC.
(C) Neither the Company Shareholder nor the Company has any liability to the PBGC with respect
to any Plan or has any liability under ERISA § 502 or § 4071.
(D) All filings required by ERISA and the IRC as to each Plan have been timely filed, and all
notices and disclosures to participants required by either ERISA or the IRC have been timely
provided.
(E) All contributions and payments made or accrued with respect to all Company Plans and
Company Other Benefit Obligations are deductible under IRC § 162 or § 404. No amount, or any asset
of any Company Plan, is subject to tax as unrelated business taxable income.
(iv) Each Company Plan can be terminated within thirty days, without payment of any additional
contribution or amount and without the vesting or acceleration of any benefits promised by such
Plan.
(v) Since December 31, 2005, there has been no establishment or amendment of any Company Plan
or Company Other Benefit Obligation.
20
(vi) No event has occurred or circumstance exists that could result in a material increase in
premium costs of Company Plans and Company Other Benefit Obligations that are insured, or a
material increase in benefit costs of such Plans and Obligations that are self-insured.
(vii) Other than claims for benefits submitted by participants or beneficiaries, no claim
against, or legal proceeding involving, any Company Plan or Company Other Benefit Obligation is
pending or, to the Company Shareholder’s Knowledge, is Threatened.
(viii) No Company Plan is a stock bonus, pension, or profit-sharing plan within the meaning of
IRC § 401(a).
(ix) Each Qualified Plan of the Company is qualified in form and operation under IRC § 401(a);
each trust for each such Plan is exempt from federal income tax under IRC § 501(a). No event has
occurred or circumstance exists that will or could give rise to disqualification or loss of
tax-exempt status of any such Plan or trust.
(x) The Company and each ERISA Affiliate of the Company has met the minimum funding standard,
and has made all contributions required, under ERISA § 302 and IRC § 402.
(xi) No Company Plan is subject to Title IV of ERISA.
(xii) The Company has paid all amounts due to the PBGC pursuant to ERISA § 4007.
(xiii) Neither the Company nor any ERISA Affiliate of the Company has ceased operations at any
facility or has withdrawn from any Title IV Plan in a manner that would subject the Company to
liability under ERISA § 4062(e), § 4063, or § 4064.
(xiv) Neither the Company nor any ERISA Affiliate of the Company has filed a notice of intent
to terminate any Plan or has adopted any amendment to treat a Plan as terminated. The PBGC has not
instituted proceedings to treat any Company Plan as terminated. No event has occurred or
circumstance exists that may constitute grounds under ERISA § 4042 for the termination of, or the
appointment of a trustee to administer, any Company Plan.
(xv) No amendment has been made, or is reasonably expected to be made, to any Plan that has
required or could require the provision of security under ERISA § 307 or IRC § 401(a)(29).
(xvi) No accumulated funding deficiency, whether or not waived, exists with respect to any
Company Plan; no event has occurred or circumstance exists that may result in an accumulated
funding deficiency as of the last day of the current plan year of any such Plan.
21
(xvii) The actuarial report for each Pension Plan of the Company and each ERISA Affiliate of
the Company fairly presents the financial condition and the results of operations of each such Plan
in accordance with GAAP.
(xviii) Since the last valuation date for each Pension Plan of the Company and each ERISA
Affiliate of the Company, no event has occurred or circumstance exists that would increase the
amount of benefits under any such Plan or that would cause the excess of Plan assets over benefit
liabilities (as defined in ERISA § 4001) to decrease, or the amount by which benefit liabilities
exceed assets to increase.
(xix) No reportable event (as defined in ERISA § 4043 and in regulations issued thereunder)
has occurred.
(xx) Neither the Company Shareholder nor the Company has Knowledge of any facts or
circumstances that may give rise to any liability of the Company Shareholder, the Company, or
Xxxxxxxx to the PBGC under Title IV of ERISA.
(xxi) Neither the Company nor any ERISA Affiliate of the Company has ever established,
maintained, or contributed to or otherwise participated in, or had an obligation to maintain,
contribute to, or otherwise participate in, any Multi-Employer Plan.
(xxii) Neither the Company nor any ERISA Affiliate of the Company has withdrawn from any
Multi-Employer Plan with respect to which there is any outstanding liability as of the date of this
Agreement. No event has occurred or circumstance exists that presents a risk of the occurrence of
any withdrawal from, or the participation, termination, reorganization, or insolvency of, any
Multi-Employer Plan that could result in any liability of either the Company or Xxxxxxxx to a
Multi-Employer Plan.
(xxiii) Neither the Company nor any ERISA Affiliate of the Company has received notice from
any Multi-Employer Plan that it is in reorganization or is insolvent, that increased contributions
may be required to avoid a reduction in plan benefits or the imposition of any excise tax, or that
such Plan intends to terminate or has terminated.
(xxiv) No Multi-Employer Plan to which the Company or any ERISA Affiliate of the Company
contributes or has contributed is a party to any pending merger or asset or liability transfer or
is subject to any proceeding brought by the PBGC.
(xxv) Except to the extent required under ERISA § 601 et seq. and IRC § 4980B, the Company
does not provide health or welfare benefits for any retired or former employee and is not obligated
to provide health or welfare benefits to any active employee following such employee’s retirement
or other termination of service.
(xxvi) The Company has the right to modify and terminate benefits to retirees (other than
pensions) with respect to both retired and active employees.
(xxvii) The Company Shareholder and the Company have complied with the provisions of ERISA §
601 et seq. and IRC § 4980B.
22
(xxviii) No payment that is owed or may become due to any director, officer, employee, or
agent of the Company will be non-deductible to the Company or subject to tax under IRC § 280G or §
4999; nor will the Company be required to “gross up” or otherwise compensate any such person
because of the imposition of any excise tax on a payment to such person.
(xxix) The consummation of the Contemplated Transactions will not result in the payment,
vesting, or acceleration of any benefit.
3.14 Compliance With Legal Requirements; Governmental Authorizations.
(a) As follows:
(i) The Company is in full compliance with each Legal Requirement that is or was applicable to
it or to the conduct or operation of its business or the ownership or use of any of its assets;
(ii) no event has occurred or circumstance exists that (with or without notice or lapse of
time) (A) may constitute or result in a violation by the Company of, or a failure on the part of
the Company to comply with, any Legal Requirement, or (B) may give rise to any obligation on the
part of the Company to undertake, or to bear all or any portion of the cost of, any remedial action
of any nature; and
(iii) the Company has not received any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal Requirement, or (B) any actual,
alleged, possible, or potential obligation on the part of the Company to undertake, or to bear all
or any portion of the cost of, any remedial action of any nature.
(b) To the best of the Company’s or the Company Shareholder’s Knowledge, all Governmental
Authorizations necessary to carry on the Company’s business in its present form and to permit the
Company to own and use its assets in the manner in which it currently owns and uses such assets are
valid and in full force and effect. To the best of the Company’s or the Company Shareholder’s
Knowledge:
(i) the Company is in full compliance with all of the terms and requirements of each
Governmental Authorization;
(ii) no event has occurred or circumstance exists that may (with or without notice or lapse of
time) (A) constitute or result directly or indirectly in a violation of or a failure to comply with
any term or requirement of any Governmental Authorization, or (B) result directly or indirectly in
the revocation, withdrawal, suspension, cancellation, or termination of, or any modification to,
any Governmental Authorization;
(iii) the Company has not received any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any
23
term or requirement of any Governmental Authorization, or (B) any actual, proposed, possible,
or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to
any Governmental Authorization; and
(iv) all applications required to have been filed for the renewal of the Governmental
Authorizations have been duly filed on a timely basis with the appropriate Governmental Bodies, and
all other filings required to have been made with respect to such Governmental Authorizations have
been duly made on a timely basis with the appropriate Governmental Bodies.
3.15 Legal Proceedings; Orders.
(a) To the best of the Company’s or the Company Shareholder’s Knowledge, there is no pending
Proceeding:
(i) that has been commenced by or against the Company or that otherwise relates to or may
affect the business of, or any of the assets owned or used by, the Company; or
(ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions.
(b) To the Knowledge of the Company Shareholder and the Company, (1) no such Proceeding has
been Threatened, and (2) no event has occurred or circumstance exists that may give rise to or
serve as a basis for the commencement of any such Proceeding..
(c) To the best of the Company’s or the Company Shareholder’s Knowledge:
(i) there is no Order to which the Company, or any of the assets owned or used by the Company,
is subject;
(ii) Neither the Company nor Company Shareholder is subject to any Order that relates to the
business of, or any of the assets owned or used by, the Company; and
(iii) no officer, director, agent, or employee of the Company is subject to any Order that
prohibits such officer, director, agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of the Company.
(d) To the best of the Company Shareholder’s Knowledge:
(i) the Company is in full compliance with all of the terms and requirements of each Order to
which it, or any of the assets owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists that may constitute or result in (with or
without notice or lapse of time) a violation of or failure to comply
24
with any term or requirement of any Order to which the Company, or any of the assets owned or
used by the Company, is subject; and
(iii) the Company has not received any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding any actual, alleged, possible, or
potential violation of, or failure to comply with, any term or requirement of any Order to which
the Company, or any of the assets owned or used by the Company, is or has been subject.
3.16 Absence of Certain Changes and Events. To the best of the Company’s and the
Company Shareholder’s Knowledge, since the date of the Balance Sheet, the Company has conducted its
business only in the Ordinary Course of Business and there has not been any:
(a) change in the Company’s authorized or issued capital stock; grant of any stock option or
right to purchase shares of capital stock of the Company; issuance of any security convertible into
such capital stock; grant of any registration rights; purchase, redemption, retirement, or other
acquisition by the Company of any shares of any such capital stock; or declaration or payment of
any dividend or other distribution or payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of the Company;
(c) payment or increase by the Company of any bonuses, salaries, or other compensation to any
stockholder, director, officer, or (except in the Ordinary Course of Business) employee or entry
into any employment, severance, or similar Contract with any director, officer, or employee;
(d) adoption of, or increase in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for
or with any employees of the Company;
(e) damage to or destruction or loss of any asset or property of the Company, whether or not
covered by insurance, materially and adversely affecting the properties, assets, business,
financial condition, or prospects of the Company, taken as a whole;
(f) entry into, termination of, or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit, or similar agreement, or (ii)
any Contract or transaction involving a total remaining commitment by or to the Company of at least
$5,000;
(g) sale (other than sales of inventory in the Ordinary Course of Business), lease, or other
disposition of any asset or property of the Company or mortgage, pledge, or imposition of any lien
or other encumbrance on any material asset or property of the Company, including the sale, lease,
or other disposition of any of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a value to the Company in excess of
$5,000;
25
(i) material change in the accounting methods used by the Company; or
(j) agreement, whether oral or written, by the Company to do any of the foregoing.
3.17 Contracts; No Defaults.
(a) To the best of the Company’s and the Company’s Knowledge, the Company or the Company
Shareholder has made available to Xxxxxxxx true and complete copies, of:
(i) each Applicable Contract that involves performance of services or delivery of goods or
materials by the Company of an amount or value in excess of $5,000;
(ii) each Applicable Contract that involves performance of services or delivery of goods or
materials to the Company of an amount or value in excess of $5,000;
(iii) each Applicable Contract that was not entered into in the Ordinary Course of Business
and that involves expenditures or receipts of the Company in excess of $5,000;
(iv) each lease, rental or occupancy agreement, license, installment and conditional sale
agreement, and other Applicable Contract affecting the ownership of, leasing of, title to, use of,
or any leasehold or other interest in, any real or personal property (except personal property
leases and installment and conditional sales agreements having a value per item or aggregate
payments of less than $5,000 and with terms of less than one year);
(v) each licensing agreement or other Applicable Contract with respect to patents, trademarks,
copyrights, or other intellectual property, including agreements with current or former employees,
consultants, or contractors regarding the appropriation or the non-disclosure of any of the
Intellectual Property Assets;
(vi) each collective bargaining agreement and other Applicable Contract to or with any labor
union or other employee representative of a group of employees;
(vii) each joint venture, partnership, and other Applicable Contract (however named) involving
a sharing of profits, losses, costs, or liabilities by the Company with any other Person;
(viii) each Applicable Contract containing covenants that in any way purport to restrict the
business activity of the Company or any Affiliate of the Company or limit the freedom of the
Company or any Affiliate of the Company to engage in any line of business or to compete with any
Person;
(ix) each Applicable Contract providing for payments to or by any Person based on sales,
purchases, or profits, other than direct payments for goods;
26
(x) each power of attorney that is currently effective and outstanding;
(xi) each Applicable Contract entered into other than in the Ordinary Course of Business that
contains or provides for an express undertaking by the Company to be responsible for consequential
damages;
(xii) each Applicable Contract for capital expenditures in excess of $5,000;
(xiii) each written warranty, guaranty, and or other similar undertaking with respect to
contractual performance extended by the Company other than in the Ordinary Course of Business; and
(xiv) each amendment, supplement, and modification (whether oral or written) in respect of any
of the foregoing.
(b) To the best of the Company’s or the Company Shareholder’s Knowledge:
(i) neither the Company, the Company Shareholder nor any Related Person of either has or may
acquire any rights under, and neither the Company nor the Company Shareholder has or will become
subject to any obligation or liability under, any Contract that relates to the business of, or any
of the assets owned or used by, the Company; and
(ii) To the best of the Company’s or the Company Shareholder’s Knowledge, no officer,
director, agent, employee, consultant, or contractor of the Company is bound by any Contract that
purports to limit the ability of such officer, director, agent, employee, consultant, or contractor
to (A) engage in or continue any conduct, activity, or practice relating to the business of the
Company, or (B) assign to the Company or to any other Person any rights to any invention,
improvement, or discovery.
(c) To the best of the Company’s or the Company Shareholder’s Knowledge, each Contract of the
Company is in full force and effect and is valid and enforceable in accordance with its terms.
(d) To the best of the Company’s or the Company Shareholder’s Knowledge:
(i) the Company is in full compliance with all applicable terms and requirements of each
Contract under which the Company has or had any obligation or liability or by which the Company or
any of the assets owned or used by the Company is or was bound;
(ii) each other Person that has or had any obligation or liability under any Contract under
which the Company has or had any rights is in full compliance with all applicable terms and
requirements of such Contract;
27
(iii) no event has occurred or circumstance exists that (with or without notice or lapse of
time) may contravene, conflict with, or result in a violation or breach of, or give the Company or
other Person the right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract; and
(iv) the Company has not given to or received from any other Person any notice or other
communication (whether oral or written) regarding any actual, alleged, possible, or potential
violation or breach of, or default under, any Contract.
(e) To the best of the Company Shareholder’s Knowledge, there are no renegotiations of,
attempts to renegotiate, or outstanding rights to renegotiate any material amounts paid or payable
to the Company under current or completed Contracts with any Person and no such Person has made
written demand for such renegotiation.
(f) To the best of the Company Shareholder’s Knowledge, the Contracts relating to the sale,
design, manufacture, or provision of products or services by the Company have been entered into in
the Ordinary Course of Business and have been entered into without the commission of any act alone
or in concert with any other Person, or any consideration having been paid or promised, that is or
would be in violation of any Legal Requirement.
3.18 Insurance.
(a) The Company has delivered to Xxxxxxxx:
(i) true and complete copies of all policies of insurance to which the Company is a party or
under which the Company, or any director of the Company, is or has been covered at any time within
the five (5) years preceding the date of this Agreement;
(ii) true and complete copies of all pending applications for policies of insurance; and
(iii) any statement by the auditor of the Company’s financial statements with regard to the
adequacy of such entity’s coverage or of the reserves for claims.
(b) To the best of the Company’s or the Company Shareholder’s Knowledge:
(i) All policies to which the Company is a party or that provide coverage to the Company’s or
the Company Shareholder, the Company, or any director or officer of the Company:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is financially sound and reputable;
28
(C) taken together, provide adequate insurance coverage for the assets and the operations of
the Company for all risks normally insured against by a Person carrying on the same business or
businesses as the Acquired Companies;
(D) are sufficient for compliance with all Legal Requirements and Contracts to which the
Company is a party or by which it is bound;
(E) will continue in full force and effect following the consummation of the Contemplated
Transactions; and
(F) do not provide for any retrospective premium adjustment or other experienced-based
liability on the part of the Company.
(ii) Neither the Company Shareholder nor the Company has received (A) any refusal of coverage
or any notice that a defense will be afforded with reservation of rights, or (B) any notice of
cancellation or any other indication that any insurance policy is no longer in full force or effect
or will not be renewed or that the issuer of any policy is not willing or able to perform its
obligations thereunder.
(iii) The Company has paid all premiums due, and have otherwise performed all of their
respective obligations, under each policy to which the Company is a party or that provides coverage
to the Company or director thereof.
(iv) The Company has given notice to the insurer of all claims that may be insured thereby.
3.19 Environmental Matters. To the best of the Company Shareholder Knowledge, the
Company is, and at all times has been, in full compliance with, and has not been and is not in
violation of or liable under, any Environmental Law.
3.20 Employees.
(a) the Company Shareholder and the Company have provided Xxxxxxxx with access to all
personnel records of the Company.
(b) To the best of the Company’s or the Company Shareholder Knowledge, no employee or director
of the Company is a party to, or is otherwise bound by, any agreement or arrangement, including any
confidentiality, noncompetition, or proprietary rights agreement, between such employee or director
and any other Person (“Proprietary Rights Agreement”) that in any way adversely affects or will
affect (i) the performance of his duties as an employee or director of the Company, or (ii) the
ability of the Company to conduct its business, including any Proprietary Rights Agreement with the
Company Shareholder or the Company by any such employee or director. To the Company’s or the
Company Shareholder’s Knowledge, no director, officer, or other key employee of the Company intends
to terminate his employment with the Company.
3.21 Labor Relations; Compliance. The Company Shareholder and the Compay have provided Xxxxxxxx with access to all collective
bargaining or other labor Contracts
29
of the Company. There is not presently pending or existing, and
to the Company’s or the Company Shareholder’s Knowledge there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage, or employee grievance process, (b) any Proceeding against or
affecting the Company relating to the alleged violation of any Legal Requirement pertaining to
labor relations or employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity Commission, or any
comparable Governmental Body, organizational activity, or other labor or employment dispute against
or affecting the Company or its premises, or (c) any application for certification of a collective
bargaining agent. To the best of the Company’s or the Company Shareholder’s Knowledge, no event has
occurred or circumstance exists that could provide the basis for any work stoppage or other labor
dispute. There is no lockout of any employees by the Company, and no such action is contemplated by
the Company. To the best of the Company’s or the Company Shareholder’s Knowledge, the Company has
complied in all respects with all Legal Requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the
payment of social security and similar taxes, occupational safety and health, and plant closing. To
the best of the Company’s or the Company Shareholder’s Knowledge, the Company is not liable for the
payment of any compensation, damages, taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements.
3.22 Intellectual Property.
(a) Intellectual Property Assets—The term “Intellectual Property Assets” includes:
(i) the Company’s name, all fictional business names, trading names, registered and
unregistered trademarks, service marks, and applications (collectively, “Marks”);
(ii) all patents, patent applications, and inventions and discoveries that may be patentable
(collectively, “Patents”);
(iii) all copyrights in both published works and unpublished works (collectively,
“Copyrights”);
(iv) all rights in mask works (collectively, “Rights in Mask Works”); and
(v) all know-how, trade secrets, confidential information, customer lists, software, technical
information, data, process technology, plans, drawings, and blue prints (collectively, “Trade
Secrets”); owned, used, or licensed by the Company as licensee or licensor.
(b) Agreements—To the best of the Company Shareholder’s Knowledge, there are no
outstanding or Threatened disputes or disagreements with respect to any Contracts relating to the
Intellectual Property Assets to which the Company is a party or by which the Company is bound,
except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software programs with a value of less than
$5,000 under which the Company is the licensee.
30
(c) Know-How Necessary for the Business
(i) To the best of the Company’s or the Company Shareholder’s Knowledge, the Company is the
owner, free and clear of all liens, security interests, charges, encumbrances, equities, and other
adverse claims, of all Intellectual Property Assets necessary for the operation of the Company’s
business as it is currently conducted, and has the right to use without payment to a third party
all of such Intellectual Property Assets.
(ii) To the best of the Company’s or the Company Shareholder’s Knowledge, no employee of the
Company has entered into any Contract that restricts or limits in any way the scope or type of work
in which the employee may be engaged or requires the employee to transfer, assign, or disclose
information concerning his work to anyone other than the Company.
(d) Patents To the best of the Company’s or the Company Shareholder’s Knowledge, none
of the products manufactured and sold, nor any process or know-how used, by the Company infringes
or is alleged to infringe any patent or other proprietary right of any other Person.
(e) Trademarks.
(i) To the best of the Company Shareholder’s Knowledge, the Company is the owner of all right,
title, and interest in and to each of the Marks necessary for the operation of the Company’s
business as it is currently conducted, free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims.
(ii) To the best of the Company Shareholder’s Knowledge, all Marks that have been registered
with the United States Patent and Trademark Office are currently in compliance with all formal
legal requirements (including the timely post-registration filing of affidavits of use and
incontestability and renewal applications), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the Closing Date.
(iii) To the best of the Company Shareholder’s Knowledge, no Xxxx has been or is now involved
in any opposition, invalidation, or cancellation, and no such action is Threatened with the respect
to any of the Marks.
(iv) To the best of Company Shareholder’s Knowledge, there is no potentially interfering
trademark or trademark application of any third party.
(v) To the best of the Company Shareholder’s Knowledge, no Xxxx is infringed or has been
challenged or threatened in any way. To the best of the Company Shareholder’s Knowledge, none of
the Marks used by the Company infringes or is alleged to infringe any trade name, trademark, or
service xxxx of any third party.
(vi) To the best of the Company Shareholder’s Knowledge, all products and materials containing
a Xxxx xxxx the proper federal registration notice where permitted by law.
31
(f) Copyrights.
(i) To the best of the the Company’s or Company Shareholder’s Knowledge, the Company is the
owner of all right, title, and interest in and to each of the Copyrights necessary for the
operation of the Company’s business as it is currently conducted, free and clear of all liens,
security interests, charges, encumbrances, equities, and other adverse claims.
(ii) To the best of the Company’s or the Company Shareholder’s Knowledge, all the Copyrights
have been registered and are currently in compliance with formal legal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions falling due within
ninety days after the date of Closing.
(iii) To the best of the Company Shareholder’s Knowledge, no Copyright is infringed or has
been challenged or threatened in any way. To the best of the Company Shareholder’s knowledge, none
of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright of
any third party or is a derivative work based on the work of a third party.
(iv) To the best of the Company Shareholder’s Knowledge, all works encompassed by the
Copyrights have been marked with the proper copyright notice.
(g) Trade Secrets.
(i) To the best of the Company Shareholder’s Knowledge, with respect to each Trade Secret, the
documentation relating to such Trade Secret is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and proper use without reliance on the
knowledge or memory of any individual.
(ii) To the best of the Company’s or the Company Shareholder’s Knowledge, the Company
Shareholder and the Company have taken all reasonable precautions to protect the secrecy,
confidentiality, and value of their Trade Secrets.
(iii) To the best of the Company’s or the Company Shareholder’s Knowledge, the Company has
good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. To the
best of the Company’s or the Company Shareholder’s Knowledge, the Trade Secrets are not part of the
public knowledge or literature and have not been used, divulged, or appropriated either for the
benefit of any Person (other than the Company) or to the detriment of the Company. To the best of
the Company’s or the Company Shareholder’s Knowledge, no Trade Secret is subject to any adverse
claim or has been challenged or threatened in any way.
3.23 Certain Payments. To the best of the Company’s or the Company Shareholder’s Knowledge, neither the Company
nor any director, officer, agent, or employee of the Company, or any other Person associated with
or acting for or on behalf of the Company, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private
or public, regardless of form, whether in money, property, or services (i) to obtain favorable
treatment in securing business, (ii) to pay for
32
favorable treatment for business secured, (iii) to
obtain special concessions or for special concessions already obtained, for or in respect of the
Company or any Affiliate of the Company, or (iv) in violation of any Legal Requirement, (b)
established or maintained any fund or asset that has not been recorded in the books and records of
the Company.
3.24 Disclosure.
(a) No representation or warranty of the Company or the Company Shareholder in this Agreement
omits to state a material fact necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 5.5 will contain any untrue statement or omit to state
a material fact necessary to make the statements therein or in this Agreement, in light of the
circumstances in which they were made, not misleading.
(c) There is no fact known to the Company’s or the Company Shareholder that has specific
application to the Company Shareholder or the Company (other than general economic or industry
conditions) and that materially adversely affects the assets, business, prospects, financial
condition, or results of operations of the Company that has not been disclosed to or readily
available to Xxxxxxxx.
3.25 Relationships With Related Persons. [This section intentionally deleted.]
3.26 Brokers Or Finders. Neither the Company nor the Company Shareholder or the
agents of either have incurred any obligation or liability, contingent or otherwise, for brokerage
or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement.
4. Representations and Warranties of Xxxxxxxx. represents and warrants to lCompany
and the Company and the Company Shareholder as follows:
4.1 Organization And Good Standing Xxxxxxxx is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Oklahoma.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation of Xxxxxxxx,
enforceable against Xxxxxxxx in accordance with its terms. Upon the execution and delivery by
Xxxxxxxx of the Escrow Agreement and the Employment Agreement, (collectively, the “Xxxxxxxx’x
Closing Documents”), the Xxxxxxxx’x Closing Documents will constitute the legal, valid, and binding
obligations of Xxxxxxxx, enforceable against Xxxxxxxx in accordance with their respective terms.
Xxxxxxxx has the absolute and unrestricted right, power, and authority to execute and deliver this
Agreement and the Xxxxxxxx’x Closing Documents and to perform its obligations under this Agreement
and the Xxxxxxxx’x Closing Documents.
(b) Neither the execution and delivery of this Agreement by Xxxxxxxx nor the consummation or
performance of any of the Contemplated Transactions by Xxxxxxxx will
33
give any Person the right to
prevent, delay, or otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any provision of Xxxxxxxx’x Organizational Documents;
(ii) any resolution adopted by the board of directors or the stockholders of Xxxxxxxx;
(iii) any Legal Requirement or Order to which Xxxxxxxx may be subject; or
(iv) any Contract to which Xxxxxxxx is a party or by which Xxxxxxxx may be bound.
Xxxxxxxx is not and will not be required to obtain any Consent from any Person in connection
with the execution and delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.
4.3 Investment Intent. Xxxxxxxx is acquiring the Shares for its own account and not with
a view to distribution within the meaning of Section 2(11) of the Securities Act.
4.4 Certain Proceedings. There is no pending Proceeding that has been commenced
against Xxxxxxxx and that challenges, or may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, any of the Contemplated Transactions. To Xxxxxxxx’x
Knowledge, no such Proceeding has been Threatened.
4.5 Brokers Or Finders. Xxxxxxxx and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with this Agreement and will indemnify and hold
the Company and the Company Shareholder harmless from any such payment alleged to be due by or
through Xxxxxxxx as a result of the action of Xxxxxxxx or its officers or agents.
5. Covenants Of The Company and the Company Shareholder Prior To Closing Date.
5.1 Access and Investigation. Between the date of this Agreement and the Closing Date,
the Company and the Company Shareholder will, and will cause its Representatives to, (a)
afford Xxxxxxxx and its Representatives and prospective lenders and their Representatives
(collectively, “Xxxxxxxx’x Advisors”) full and free access to the Company’s personnel, properties
(including subsurface testing), contracts, books and records, and other documents and data, (b)
furnish Xxxxxxxx and Xxxxxxxx’x Advisors with copies of all such contracts, books and records, and
other existing documents and data as Xxxxxxxx may reasonably request, and (c) furnish Xxxxxxxx and
Xxxxxxxx’x Advisors with such additional financial, operating, and other data and information as
Xxxxxxxx may reasonably request.
5.2 Operation of the Businesses of the Company. Between the date of this Agreement and
the Closing Date, the Company will:
34
(a) conduct the business of the Company only in the Ordinary Course of Business;
(b) use its Best Efforts to preserve intact the current business organization of the Company,
keep available the services of the current officers, employees, and agents of the Company, and
maintain the relations and good will with suppliers, customers, landlords, creditors, employees,
agents, and others having business relationships with the Company;
(c) confer with Xxxxxxxx concerning operational matters of a material nature; and
(d) otherwise report periodically to Xxxxxxxx concerning the status of the business,
operations, and finances of the Company.
5.3 Negative Covenant. Except as otherwise expressly permitted by this Agreement, between the date of this
Agreement and the Closing Date, the Company and the Company Shareholder will not, without
the prior consent of Xxxxxxxx, take any affirmative action, or fail to take any reasonable action
within their or its control, as a result of which any of the changes or events listed in Section
3.16 is likely to occur.
5.4 Required Approvals. As promptly as practicable after the date of this Agreement, the Company and the
Company Shareholder will make all filings required by Legal Requirements to be made by it in
order to consummate the Contemplated Transactions. Between the date of this Agreement and the
Closing Date, the Company and the Company Shareholder will cooperate with Xxxxxxxx with
respect to all filings that Xxxxxxxx elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions.
5.5 Notification. Between the date of this Agreement and the Closing Date, the Company and the Company
Shareholder will promptly notify Xxxxxxxx in writing if the Company Shareholder or the Company
becomes aware of any fact or condition that causes or constitutes a Breach of any of the Company’s
or the Company Shareholder’s representations and warranties as of the date of this Agreement, or if
the Company Shareholder or the Company becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as expressly contemplated by this Agreement)
cause or constitute a Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or condition. During the
same period, the Company and the Company Shareholder will promptly notify Xxxxxxxx of the
occurrence of any Breach of any covenant of the Company or the Company Shareholder in this Section
5 or of the occurrence of any event that may make the satisfaction of the conditions in Section 7
impossible or unlikely.
5.6 Payment of Indebtedness by Related Persons. Except as expressly provided in this Agreement, the Company Shareholder will cause all
indebtedness owed to the Company by the Company Shareholder or any related person of the Company
Shareholder to be paid in full prior to Closing.
5.7 No Negotiation. Until such time, if any, as this Agreement is terminated pursuant to Section 9, the Company
Shareholder will not, and will cause the Company and each
35
of their Representatives not to, directly or indirectly solicit, initiate, or encourage any inquiries or proposals from, discuss or negotiate
with, provide any non-public information to, or consider the merits of any unsolicited inquiries or
proposals from, any Person (other than Xxxxxxxx) relating to any transaction involving the sale of
the business or assets (other than in the Ordinary Course of Business) of the Company, or any of
the capital stock of the Company, or any merger, consolidation, business combination, or similar
transaction involving the Company.
5.8 Best Efforts. Between the date of this Agreement and the Closing Date, the Company and the Company
Shareholder will use their Best Efforts to cause the conditions in Sections 7 and 8 to be
satisfied.
5.9 Sale or Distribution of PVTM Stock. Between the date of this Agreement and the
Closing Date the Company will sell or distribute the 93,500 shares of PVTM stock recorded on the
balance sheet.
6. Covenants of Xxxxxxxx Prior to Closing Date.
6.1 Approvals of Governmental Bodies. As promptly as practicable after the date of this Agreement, Xxxxxxxx will, and will cause
each of its Related Persons to, make all filings required by Legal Requirements to be made by them
to consummate the Contemplated Transactions. Between the date of this Agreement and the Closing
Date, Xxxxxxxx will, and will cause each Related Person to, cooperate with the Company and the
Company Shareholder with respect to all filings that the Company or the Company Shareholder is
required by Legal Requirements to make in connection with the Contemplated Transactions, and (ii)
cooperate with the Company and the Company Shareholder in obtaining all required consents to the
Contemplated Transactions; provided that this Agreement will not require Xxxxxxxx to dispose of or
make any change in any portion of its business or to incur any other burden to obtain a
Governmental Authorization.
6.2 Best Efforts. Except as set forth in the proviso to Section 6.1, between the date of this Agreement and
the Closing Date, Xxxxxxxx will use its Best Efforts to cause the conditions in Sections 7 and 8 to
be satisfied.
7. Conditions Precedent to Xxxxxxxx’x Obligation to Close. Xxxxxxxx’x obligation to purchase the Shares and to take the other actions required to be
taken by Xxxxxxxx at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Xxxxxxxx, in whole or in part):
7.1 Accuracy Of Representations.
(a) All of the Company’s and the Company Shareholder’s representations and warranties in this
Agreement (considered collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date of this Agreement,
and must be accurate in all material respects as of the Closing Date as if made on the Closing
Date, without giving effect to any supplement to the Disclosure Letter.
36
(b) Each of the Company’s and the Company Shareholder’s representations and warranties in
Sections 3.3, 3.4 and 3.1(i) must have been accurate in all respects as of the date of this
Agreement, and must be accurate in all respects as of the Closing Date as if made on the Closing
Date, without giving effect to any supplement to the Disclosure Letter.
7.2 The Company’s and the Company Shareholder’s Performance.
(a) All of the covenants and obligations that the Company and the Company Shareholder required
to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered individually), must have
been duly performed and complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 2.4 must have been delivered,
and each of the other covenants and obligations in Sections 5.1 through 5.8 must have been
performed and complied with in all respects.
7.3 Consents. All necessary Consents to the Contemplated Transactions must have been obtained and must be
in full force and effect.
7.4 Additional Documents. Each of the following documents must have been delivered to Xxxxxxxx:
(a) an opinion of Xxxxxxx and Xxxxxxx, PLLP, dated the Closing Date in form and substance
reasonably required by Xxxxxxxx;
(b) estoppel certificates executed on behalf of the Company, and the Company Shareholder
dated as of the Closing Date; and
(c) such other documents as Xxxxxxxx may reasonably request for the purpose of (i) enabling
its counsel to provide the opinion referred to in Section 8.4(a), (ii) evidencing the accuracy of
any of the Company’s or the Company Shareholder’s representations and warranties, (iii) evidencing
the performance by the Company or the Company Shareholder of, or the compliance by the Company or
the Company Shareholder with, any covenant or obligation required to be performed or complied with
by the Company or the Company Shareholder, (iv) evidencing the satisfaction of any condition
referred to in this Section 7, or (v) otherwise facilitating the consummation or performance of any
of the Contemplated Transactions.
7.5 No Proceedings. Since the date of this Agreement, there must not have been commenced or Threatened against
Xxxxxxxx, or against any Person affiliated with Xxxxxxxx, any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
7.6 No Claim Regarding Stock Ownership or Sale Proceeds. There must not have been made or Threatened by any Person any claim asserting that such
Person (a) is the
37
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting, equity, or ownership interest in, any
of the Company, or (b) is entitled to all or any portion of the Purchase Price payable for the
Shares.
7.7 No Prohibition. Neither the consummation nor the performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time), materially contravene, or
conflict with, or result in a material violation of, or cause Xxxxxxxx or any Person affiliated
with Xxxxxxxx to suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been published, introduced, or
otherwise formally proposed by or before any Governmental Body.
8. Conditions Precedent to the Company’s or the Company Shareholder’s Obligations to
Close. The Company’s and the Company Shareholder’s obligations to deliver the Shares and to take
the other actions required to be taken by the Company or the Company Shareholder at the Closing are
subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any
of which may be waived by the Company or the Company Shareholder, in whole or in part):
8.1 Accuracy of Representations. All of Xxxxxxxx’x representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered individually), must have been accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the Closing Date.
8.2 Xxxxxxxx’x Performance.
(a) All of the covenants and obligations that Xxxxxxxx is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), must have been performed and complied
with in all material respects.
(b) Xxxxxxxx must have delivered each of the documents required to be delivered by Xxxxxxxx
pursuant to Section 2.4 and must have made the cash payments required to be made by Xxxxxxxx
pursuant to Sections 2.4(b)(i) and 2.4(b)(iii).
8.3 Consents. All necessary Consents to the Contemplated Transactions must have been obtained and must be
in full force and effect.
8.4 Additional Documents. Xxxxxxxx must have caused the following documents to be delivered to the Company:
(a) an opinion of McAfee & Xxxx A Professional Corporation, dated the Closing Date, in form
and substance reasonably required by the Company; and
(b) such other documents as the Company may reasonably request for the purpose of (i) enabling
their counsel to provide the opinion referred to in Section 7.4(a), (ii) evidencing the accuracy of
any representation or warranty of Xxxxxxxx, (iii) evidencing the
38
performance by Xxxxxxxx of, or the compliance by Xxxxxxxx with, any covenant or obligation required to be performed or complied with
by Xxxxxxxx, (ii) evidencing the satisfaction of any condition referred to in this Section 8, or
(v) otherwise facilitating the consummation of any of the Contemplated Transactions.
8.5 No Injunction. There must not be in effect any Legal Requirement or any injunction or other Order that (a)
prohibits the transfer of the Shares to Xxxxxxxx, and (b) has been adopted or issued, or has
otherwise become effective, since the date of this Agreement.
9. Termination
9.1 Termination Events. This Agreement may, by notice given prior to or at the Closing, be terminated:
(a) by either Xxxxxxxx or the Company if a material Breach of any provision of this Agreement
has been committed by the other party or a Related Person and such Breach has not been waived;
(b) (i) by Xxxxxxxx if any of the conditions in Section 7 has not been satisfied as of the
Closing Date or if satisfaction of such a condition is or becomes impossible (other than through
the failure of Xxxxxxxx to comply with its obligations under this Agreement) and Xxxxxxxx has not
waived such condition on or before the Closing Date; or (ii) by the Company, if any of the
conditions in Section 8 has not been satisfied of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of the Company or the Company
Shareholder to comply with their obligations under this Agreement) and the Company has not waived
such condition on or before the Closing Date;
(c) by mutual consent of Xxxxxxxx and the Company; or
(d) by either Xxxxxxxx or the Company if the Closing has not occurred (other than through the
failure of any party seeking to terminate this Agreement to comply fully with its obligations under
this Agreement) on or before December,31,2006, or such later date as the parties may agree upon.
9.2 Effect of Termination. Each party’s right of termination under Section 9.1 is in addition to any other rights it
may have under this Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant to Section 9.1, all further
obligations of the parties under this Agreement will terminate, except that the obligations in
Sections 11.1 and 11.3 will survive; provided, however, that if this Agreement is terminated by a
party because of the Breach of the Agreement by the other party or because one or more of the
conditions to the terminating party’s obligations under this Agreement is not satisfied as a result
of the other party’s failure to comply with its obligations under this Agreement, the terminating
party’s right to pursue all legal remedies will survive such termination unimpaired.
10. Indemnification; Remedies.
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10.1 Survival; Right to Indemnification. All representations, warranties, covenants, and obligations in this Agreement and any other
certificate or document delivered pursuant to this Agreement will survive the Closing. The right to
indemnification, payment of Damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted with respect to the
accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or
obligation. The waiver of any condition based on the accuracy of any representation or warranty, or
on the performance of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such representations, warranties,
covenants, and obligations.
10.2 Indemnification and Payment of Damages By the Company Shareholder. The Company Shareholder, jointly and severally, will indemnify and hold harmless Xxxxxxxx,
the Company, and their respective Representatives, stockholders, controlling persons, and
affiliates (collectively, the “Indemnified Persons”) for, and will pay to the Indemnified Persons
the amount of, any loss, liability, claim, damage (excluding incidental and consequential damages),
expense (including costs of investigation and defense and reasonable attorneys’ fees) or diminution
of value, whether or not involving a third-party claim (collectively, “Damages”), arising, directly
or indirectly from:
(a) any Breach of any representation or warranty made by the Company Shareholder or the
Company in this Agreement or any other certificate or document delivered by the Company Shareholder
or the Company pursuant to this Agreement;
(b) any Breach of any representation or warranty made by the Company Shareholder and the
Company in this Agreement as if such representation or warranty were made on and as of the Closing
Date;
(c) any Breach by the Company Shareholder or the Company of any covenant or obligation of the
Company Shareholder or the Company in this Agreement;
(d) any claim by any Person for brokerage or finder’s fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by any such Person with either
the Company Shareholder or the Company (or any Person acting on their behalf) in connection with
any of the Contemplated Transactions.
The remedies provided in this Section 10.2 will not be exclusive of or limited by other
remedies that may be available to Xxxxxxxx or the other Indemnified Persons.
10.3 Indemnification and Payment of Damages by Xxxxxxxx. Xxxxxxxx will indemnify and hold harmless the Company and the Company Shareholder, and will
pay to the Company Shareholder the amount of any Damages arising, directly or indirectly from (a)
any Breach of any representation or warranty made by Xxxxxxxx in this Agreement or in any
certificate delivered by Xxxxxxxx pursuant to this Agreement, (b) any Breach by Xxxxxxxx of any
covenant or obligation of Xxxxxxxx in this Agreement, or (c) any claim by any Person for brokerage
or finder’s fees or commissions or similar payments based upon any agreement or
40
understanding alleged to have been made by such Person with Xxxxxxxx (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions.
10.4 Time Limitations. If the Closing occurs, the Company Shareholder will have no liability (for indemnification
or otherwise) with respect to any representation or warranty, or covenant or obligation to be
performed and complied with prior to the Closing Date, other than those in Sections 3.1, 3.3, 3.11,
3.15, and 3.19, unless on or before December 31, 2007 Xxxxxxxx notifies the Company Shareholder of
a claim specifying the factual basis of that claim in reasonable detail to the extent then known by
Xxxxxxxx. A claim with respect to Section 3.1, 3.3, 3.11, 3.15, or 3.19, or a claim for indemnification or reimbursement not based upon any representation or
warranty or any covenant or obligation to be performed and complied with prior to the Closing Date,
may be made at any time.
10.5 Limitations On Amount—the Company Shareholder. The Company Shareholder will have no liability (for indemnification or otherwise) with
respect to the matters described in clause (a), clause (b) or, to the extent relating to any
failure to perform or comply prior to the Closing Date, clause (c) of Section 10.2 in an amount in
excess of $150,000. However, this Section 10.6 will not apply to any Breach of any of the Company
Shareholder’s representations and warranties of which the Company Shareholder had Knowledge at any
time prior to the date on which such representation and warranty is made or any intentional Breach
by the Company Shareholder of any covenant or obligation, and the Company Shareholder will be
jointly and severally liable for all Damages with respect to such Breaches.
10.6 Limitations on Amount—Xxxxxxxx. Xxxxxxxx will have no liability for indemnification for breach of Xxxxxxxx’x
representations or warranties in excess of $150,000. However, this Section 10.7 will not apply to
any Breach of any of Xxxxxxxx’x representations and warranties of which Xxxxxxxx had Knowledge at
any time prior to the date on which such representation and warranty is made or any intentional
Breach by Xxxxxxxx of any covenant or obligation, and Xxxxxxxx will be liable for all Damages with
respect to such Breaches.
10.7 Procedure For Indemnification—Third Party Claims.
(a) Promptly after receipt by an indemnified party under Section 10.2, or Section 10.3 of
notice of the commencement of any Proceeding against it, such indemnified party will, if a claim is
to be made against an indemnifying party under such Section, give notice to the indemnifying party
of the commencement of such claim, but the failure to notify the indemnifying party will not
relieve the indemnifying party of any liability that it may have to any indemnified party, except
to the extent that the indemnifying party demonstrates that the defense of such action is
prejudiced by the indemnifying party’s failure to give such notice.
(b) If any Proceeding referred to in Section 10.6(a) is brought against an indemnified party
and it gives notice to the indemnifying party of the commencement of such Proceeding, the
indemnifying party will, unless the claim involves Taxes, be entitled to participate in such
Proceeding and, to the extent that it wishes (unless (i) the indemnifying party is also a party to
such Proceeding and the indemnified party determines in good faith that joint
41
representation would be inappropriate, or (ii) the indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such Proceeding and provide indemnification
with respect to such Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the indemnifying party
will not, as long as it diligently conducts such defense, be liable to the indemnified party under this Section 10 for any fees of other counsel or any
other expenses with respect to the defense of such Proceeding, in each case subsequently incurred
by the indemnified party in connection with the defense of such Proceeding, other than reasonable
costs of investigation. If the indemnifying party assumes the defense of a Proceeding, (i) it will
be conclusively established for purposes of this Agreement that the claims made in that Proceeding
are within the scope of and subject to indemnification; (ii) no compromise or settlement of such
claims may be effected by the indemnifying party without the indemnified party’s consent unless (A)
there is no finding or admission of any violation of Legal Requirements or any violation of the
rights of any Person and no effect on any other claims that may be made against the indemnified
party, and (B) the sole relief provided is monetary damages that are paid in full by the
indemnifying party; and (iii) the indemnified party will have no liability with respect to any
compromise or settlement of such claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any Proceeding and the indemnifying party does not,
within ten days after the indemnified party’s notice is given, give notice to the indemnified party
of its election to assume the defense of such Proceeding, the indemnifying party will be bound by
any determination made in such Proceeding or any compromise or settlement effected by the
indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party determines in good faith that there
is a reasonable probability that a Proceeding may adversely affect it or its affiliates other than
as a result of monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such Proceeding, but the indemnifying party will not be
bound by any determination of a Proceeding so defended or any compromise or settlement effected
without its consent (which may not be unreasonably withheld).
(d) The Company Shareholder hereby consents to the non-exclusive jurisdiction of any court in
which a Proceeding is brought against any Indemnified Person for purposes of any claim that an
Indemnified Person may have under this Agreement with respect to such Proceeding or the matters
alleged therein.
10.8 Procedure For Indemnification—Other Claims. A claim for indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
11. General Provisions.
11.1 Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will
bear its respective expenses incurred in connection with the preparation, execution, and
performance of this Agreement and the Contemplated Transactions,
42
including all fees and expenses of agents, representatives, counsel, and accountants. The Company Shareholder will cause the Company
not to incur any out-of-pocket expenses in connection with this Agreement. In the event of
termination of this Agreement, the obligation of each party to pay its own expenses will be subject to any rights of such party arising from a breach of this
Agreement by another party.
11.2 Public Announcements. Any public announcement or similar publicity with respect to this Agreement or the
Contemplated Transactions will be issued, if at all, at such time and in such manner as Xxxxxxxx
determines. Unless consented to by Xxxxxxxx in advance or required by Legal Requirements, prior to
the Closing the Company and the Company Shareholder shall keep this Agreement strictly confidential
and may not make any disclosure of this Agreement to any Person other than counsel and accountants.
The Company and Xxxxxxxx will consult with each other concerning the means by which the Company’s
employees, customers, and suppliers and others having dealings with the Company will be informed of
the Contemplated Transactions, and Xxxxxxxx will have the right to be present for any such
communication.
11.3 Confidentiality. Between the date of this Agreement and the Closing Date, Xxxxxxxx and the Company and the
Company Shareholder will maintain in confidence, and will cause the directors, officers, employees,
agents, and advisors of Xxxxxxxx and the Company to maintain in confidence, any information
furnished by another party or Xxxxxxxx, the Company Shareholder or the Company in connection with
this Agreement or the Contemplated Transactions, unless (a) such information is already known to
such party or to others not bound by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (b) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval required for the consummation
of the Contemplated Transactions, or (c) the furnishing or use of such information is required by
or necessary or appropriate in connection with legal proceedings.
If the Contemplated Transactions are not consummated, each party will return or destroy as
much of such written information as the other party may reasonably request.
11.4 Notices. All notices, consents, waivers, and other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other parties):
The Company or the Company Shareholder:
Xxxxx Xxxxxxxx Associates, Inc.
0000 Xxx 00 X X
Xxxxxxx XX 00000
Attention: Xxxxx Xxxxxxxx
0000 Xxx 00 X X
Xxxxxxx XX 00000
Attention: Xxxxx Xxxxxxxx
43
Facsimile No.: 000-000-0000
with a copy to:
Jo Xxxx Xxxxxxxx
0000 Xxxxx Xxxxx
Xxxxx XX 00000
Facsimile No.: 000-000-0000
0000 Xxxxx Xxxxx
Xxxxx XX 00000
Facsimile No.: 000-000-0000
Xxxxxxxx:
Xxxxxxxx Industries, Inc.
0000 X X Xxxxxxxxxx Xxx 0000
Xxxxxxxx Xxxx XX 00000
Attention: Xxxxxx Xxxx
Facsimile No.: 000-000-0000
0000 X X Xxxxxxxxxx Xxx 0000
Xxxxxxxx Xxxx XX 00000
Attention: Xxxxxx Xxxx
Facsimile No.: 000-000-0000
with a copy to:
McAfee & Xxxx
Two Leadership Square 10th Floor
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx XX 00000
Attention: Xxxxx Xxxxxxxxxxx
Facsimile No.: 000-000-0000
Two Leadership Square 10th Floor
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx XX 00000
Attention: Xxxxx Xxxxxxxxxxx
Facsimile No.: 000-000-0000
11.5 Jurisdiction; Service Of Process. Any action or proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement may be brought against any of the parties in the courts of the State of
Oklahoma, County of Oklahoma, or, if it has or can acquire jurisdiction, in the United States
District Court for the Western District of Oklahoma, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the world.
11.6 Further Assurances. The parties agree (a) to furnish upon request to each other such further information, (b)
to execute and deliver to each other such other documents, and (c) to do such other acts and
things, all as the other party may reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
11.7 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted
by applicable law, (a) no claim or right arising out of this Agreement or the documents referred to
in this Agreement can be discharged by one party, in whole or in part, by a waiver or
44
renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given
by a party will be applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation of such party or
of the right of the party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this Agreement.
11.8 Entire Agreement And Modification. This Agreement supersedes all prior agreements between the parties with respect to its
subject matter and constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended except by a written agreement executed by the
party to be charged with the amendment.
11.9 Assignments, Successors, And No Third-Party Rights. Neither party may assign any of its rights under this Agreement without the prior consent
of the other parties, which will not be unreasonably withheld, except that Xxxxxxxx may assign any
of its rights under this Agreement to any Subsidiary of Xxxxxxxx. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit
of the successors and permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and assigns.
11.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in full force and
effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
11.11 Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless otherwise expressly
provided, the word “including” does not limit the preceding words or terms.
11.12 Time Of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time
is of the essence.
11.13 Governing Law. This Agreement will be governed by the laws of the State of Oklahoma without regard to
conflicts of laws principles.
11.14 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to
be an original copy of this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
45
Agreement as of the date first written above.
Xxxxxxxx: | Xxxxxxxx Industries, Inc. |
|||
By | ||||
The Company | Xxxxx Xxxxxxxx Associates, Inc. |
|||
By | ||||
The Company Shareholder: | ||||
Xxxxx X. Xxxxxxxx | ||||
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