1
EXHIBIT 10.17
PURCHASE AND SALE AGREEMENT
BY AND AMONG
TRANSCOASTAL MARINE SERVICES, INC.
AND
C.S.I. HYDROSTATIC TESTERS, INC.
▇▇▇▇▇▇▇ MOORING AND MARINE, INC.
▇▇▇▇▇▇▇ INVESTMENTS, L.L.C.
AND
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
August 28, 1997
2
TABLE OF CONTENTS
Page
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ARTICLE 1
PURCHASE AND SALE OF CSI SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Basic Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 CSI Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Registration Rights Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 The Escrow Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 The Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2
CONSIDERATION ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Adjustments to Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Determination of Earn-Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Certain Definitions Related to the Earn-Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Review of Earn-Out Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Reduction for Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(e) Increase for Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Payment of Earn-Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Representations and Warranties by Sellers; Exhibit 3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Authority Relative to Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Ownership of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Representations and Warranties of Sellers and CSI; Exhibit 3.2 . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Representations and Warranties of Sellers and ▇▇▇▇▇▇▇; Exhibit 3.3 . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Representations and Warranties of Sellers and Investments; Exhibit 3.4 . . . . . . . . . . . . . . . . . . . . . 9
3.5 Representations and Warranties by the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Organization and Qualification, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Subsidiaries, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(d) Authority Relative to Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(e) Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(f) Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(g) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(h) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(i) Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(j) Buyer Offering Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 4
ADDITIONAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Access to Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 Amendment to Disclosure Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Confidential Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.5 Principal Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.6 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.7 Release of Sellers' Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.8 Sellers' Release of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.9 Real Estate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Title Insurance Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Title Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Phase I Environmental Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Title and Environmental Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.10 Confidential Information Memorandum; Registration Statement. . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Companies to Provide Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.11 Certain Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.12 Satisfaction of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.13 Buyer's IPO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.14 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.15 Indemnification of Directors and Officers of the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.16 Availability of Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 5
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.1 Conditions Precedent to the Obligations of the Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a)Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(b) Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Legal Actions or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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(d) Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(e) CSI Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(f) Policies of Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(g) Executive Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(h) Shareholder Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(i) Completion of Buyer's IPO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(j) Lender Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(k) Opinion of Counsel for the Companies and Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(l) Resignations of Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(m) All Proceedings to be Satisfactory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.2 Conditions Precedent to the Obligations of Sellers and the Companies. . . . . . . . . . . . . . . . . . . . . . 28
(a) Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(b) Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(c) Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(d) Release from Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(e) Executive Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Registration Rights Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(g) Lender Approval; Performance Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Receipt of Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(i) Opinion of Counsel for the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(j) Legal Actions or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(k) All Proceedings to be Satisfactory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 6
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.1 Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(c) Termination by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(d) After the Escrow Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 7
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Indemnification by Sellers. Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.3 Indemnification by Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.4 Indemnification Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 8
STOCK TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.1 Compliance with Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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8.2 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 9
FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.1 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.2 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 10
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.1 Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.2 Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.4 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.5 Amendments, Supplements, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.6 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.7 Choice of Forum; Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.8 Binding Effect, Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.9 Assignability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.10 Invalid Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.11 Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Exhibits:
EXHIBIT 1.2 - ALLOCATION OF PURCHASE PRICE
EXHIBIT 1.3 - LIST OF VESSELS
EXHIBIT 1.4 - EMPLOYMENT AGREEMENT
EXHIBIT 1.5 - REGISTRATION RIGHTS AGREEMENT
EXHIBIT 1.8 - EXCLUDED ASSETS
EXHIBIT 3.1 - REPRESENTATIONS AND WARRANTIES OF SELLERS
EXHIBIT 3.2 - REPRESENTATIONS AND WARRANTIES OF SELLERS AND CSI
EXHIBIT 3.3 - REPRESENTATIONS AND WARRANTIES OF SELLERS AND ▇▇▇▇▇▇▇
EXHIBIT 3.4 - REPRESENTATIONS AND WARRANTIES OF SELLERS AND INVESTMENTS
EXHIBIT 3.5 - REPRESENTATIONS AND WARRANTIES OF BUYER
EXHIBIT 5.1 - OPINION OF COUNSEL FOR COMPANIES AND SELLERS
EXHIBIT 5.2 - OPINION OF COUNSEL FOR THE BUYER
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PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this "Agreement") made effective as of
August 28, 1997, by and among Transcoastal Marine Services, Inc., a Delaware
corporation ("Buyer"), C.S.I. Hydrostatic Testers, Inc., a Delaware corporation
("CSI"), ▇▇▇▇▇▇▇ Mooring and Marine, Inc., a Louisiana corporation ("▇▇▇▇▇▇▇")
▇▇▇▇▇▇▇ Investments, L.L.C., a Louisiana limited liability company
("Investments") (CSI, ▇▇▇▇▇▇▇ and Investments are sometimes referred to
individually as a "Company" and collectively as the "Companies"), and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Sellers").
WHEREAS, the Sellers in the aggregate own all of the outstanding capital
stock or membership interests, as the case may be, of the Companies;
WHEREAS, the Sellers are willing to cause the Companies to reorganize their
corporate structure in order to complete the transactions contemplated by this
Agreement such that CSI will acquire all of the outstanding capital stock of
▇▇▇▇▇▇▇; and
WHEREAS, this Agreement contemplates a series of transactions in which the
Buyer will purchase from the Sellers, and the Sellers will sell to the Buyer,
all of the outstanding capital stock of CSI and all of the membership interests
of Investments in return for cash and shares of the Buyer's common stock, par
value $.001 per share ("TMS Common Stock");
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
ARTICLE 1
PURCHASE AND SALE OF CSI SHARES
1.1 Basic Transaction. On and subject to the terms and conditions of
this Agreement, the Buyer agrees to purchase from each of the Sellers, and
each of the Sellers agrees to sell and convey to the Buyer, at the Closing (as
defined below), all of the outstanding capital stock of CSI (the "CSI Shares")
and all of the outstanding membership interests of Investments (the
"Investments Interests") for the consideration specified below in this Article
1. For purposes of this Agreement, the term "Sellers" shall include (i) the
children of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, in the event
that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. transfers any CSI shares to such individuals and
such individuals execute an agreement, satisfactory to Buyer, providing that
they will be deemed to be parties to this Agreement for all purposes.
1.2 Purchase Price. Subject to the adjustments contained in Article
2 hereof, Buyer agrees to pay and deliver to the Sellers at the Closing an
aggregate of $48,000,000 (the "Purchase Price") and
CSI Purchase and Sale Agreement/Page 1
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pay and deliver to the Sellers at Closing the Tax Adjustment (as defined
below), in consideration for delivery of the CSI Shares, for delivery of the
Investments Interests and for the other covenants and agreements contained
herein and the other documents to be delivered pursuant hereto. The Purchase
Price shall be allocated $47,000,000 in payment for the CSI Shares and
$1,000,000 in payment for the Investments Interests. The Purchase Price shall
be paid to the Sellers by delivery of $40,000,000 in cash payable to the
Sellers by wire transfer or delivery of immediately available funds and (ii)
$8,000,000 in TMS Common Stock. The Tax Adjustment shall be paid to Sellers in
cash by wire transfer or delivery of immediately available funds. For purposes
of this Section 1.2, the TMS Common Stock deliverable to the Sellers at the
Closing shall have a value (the "Closing Share Price") equal to the price per
share paid by the public (the "IPO Price") in the initial public offering of
TMS Common Stock (the "IPO"). The Purchase Price and the Tax Adjustment shall
be allocated among the Sellers as set forth in Exhibit 1.2 hereto. The
Purchase Price shall be increased after the Closing by the amount of the
Earn-Out (defined below), if any, payable pursuant to Article 2 of this
Agreement and shall be allocated as set forth in Exhibit 1.2 hereto.
1.3 CSI Reorganization. Immediately prior to the Escrow Closing
(defined below), the Sellers shall consummate a transaction pursuant to which
CSI shall acquire all of the outstanding capital stock of ▇▇▇▇▇▇▇ resulting in
▇▇▇▇▇▇▇ becoming a wholly-owned subsidiary of CSI (such transaction is
sometimes referred to herein as the "CSI Reorganization"). At the Closing,
record title to the marine vessels listed in Exhibit 1.3 attached hereto (the
"Vessels") that are currently used by the Companies in their respective
business operations shall be held by CSI or ▇▇▇▇▇▇▇, respectively.
1.4 Employment Agreements. At the Escrow Closing, CSI and certain
individuals listed in Schedule 1.4 hereto shall each execute an Executive
Employment Agreement in substantially the forms attached as Exhibits 1.4A and
1.4B (the "Executive Employment Agreements"), providing for the employment of
each of such employees by CSI for an initial term of two years. The Executive
Employment Agreements shall be delivered to the Escrow Agent (defined below) at
the Escrow Closing and shall be delivered by the Escrow Agent at the Closing as
provided below.
1.5 Registration Rights Agreements. Buyer and each of the Sellers
shall execute and deliver a Registration Rights Agreement substantially in the
form attached as Exhibit 1.5 (the "Registration Rights Agreement"). The
Registration Rights Agreement shall be delivered to the Escrow Agent at the
Escrow Closing and shall be delivered by the Escrow Agent at the Closing as
provided below.
1.6 The Escrow Closing. Not earlier than four business days prior to
the Closing (such date is the "Escrow Closing Date"), certain deliveries will
be made into escrow (the "Escrow Closing") with an escrow agent to be
designated by Sellers (the "Escrow Agent"). The escrow shall be governed by a
document escrow agreement to be mutually acceptable to the parties hereto (the
"Escrow Agreement"), provided that the Escrow Agreement shall provide that
unless (i) Buyer's IPO shall have occurred not later than four business days
after the deliveries into escrow, and (ii) the Closing shall have occurred
pursuant to which the Buyer
CSI Purchase and Sale Agreement/Page 2
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shall have delivered the entirety of the cash portion of the Purchase Price and
the Tax Adjustment to Sellers, the Escrow Agent shall immediately, ipso facto,
and without any further actions on the part of any of the parties (A) deliver
to Sellers any and all certificates, instruments, and documents delivered by
Sellers to the Escrow Agent at the Escrow Closing, including, without
limitation, the certificates representing the CSI Shares and the assignments of
the Investments Interests, (B) deliver to Buyer any and all certificates,
instruments and documents delivered by Buyer to the Escrow Agent at the Escrow
Closing, including, without limitation, the certificates representing the TMS
Common Stock, and (C) ▇▇▇▇ the Executive Employment Agreements as "CANCELLED."
The Escrow Closing will take place at the offices of Chamberlain, Hrdlicka,
White, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in Houston, Texas commencing at 9:00 a.m. central
standard time. The items to be delivered to the Escrow Agent at the Escrow
Closing are as follows: (i) Sellers will deliver the various certificates,
instruments, and documents referred to in Section 5.1 below ; (ii) Buyer will
deliver the various certificates, instruments, and documents referred to in
Section 5.2 below ; (iii) each of the Sellers will deliver certificates, duly
endorsed in blank or accompanied by stock powers duly endorsed to Buyer, and in
the form for transfer to Buyer, representing all of the CSI Shares and will
deliver assignments of all of the Investments Interests owned by such Seller;
(iv) Buyer will deliver certificates for TMS Common Stock in the amount set
forth in Section 1.2 above, such certificate(s) to be in the form for issuance
to Sellers; and (v) CSI and the individuals listed in Schedule 1.4 shall each
deliver an Executive Employment Agreement between CSI and the respective
individual.
1.7 The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Chamberlain,
Hrdlicka, White, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in Houston, Texas commencing at 9:00 a.m.
central standard time following the satisfaction or waiver of all conditions to
the obligations of the parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective parties
will take at the Closing itself) (the date of Closing is the "Closing Date"),
provided that the Closing shall take place not later than the fourth business
day following the Escrow
CSI Purchase and Sale Agreement/Page 3
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Closing. At the Closing (i) Buyer will deliver to Sellers the cash portion of
the Purchase Price and the Tax Adjustment as provided in Section 1.2 above;
(ii) the various certificates, instruments and documents held in escrow which
are to be delivered to Buyer pursuant to this Agreement (including the CSI
Shares and the assignments of the Investments Interests) shall be released and
delivered to Buyer; (iii) the various certificates, instruments and documents
held in escrow to be delivered to Sellers pursuant to this Agreement (including
the certificates for TMS Common Stock and the Registration Rights Agreement)
shall be released and delivered to Sellers; (iv) the Executive Employment
Agreements shall be released and delivered to CSI and the respective
individuals who are parties to such agreements; and (v) any other certificates,
instruments and documents not held in escrow which are to be delivered to Buyer
and/or Sellers, respectively, shall be delivered to Buyer and/or Sellers,
respectively.
1.8 Excluded Assets. Buyer and Sellers agree that, prior to the
Closing Date, Seller shall cause those assets of CSI identified on Exhibit 1.8
attached hereto (the "Excluded Assets") and related liabilities to be
transferred to one or more of the Sellers or to a corporation or other entity
controlled by one or more of the Sellers
ARTICLE 2
CONSIDERATION ADJUSTMENTS
2.1 Adjustments to Purchase Price. The Purchase Price payable to
Seller under this Agreement is subject to the adjustments described in this
Section 2.1:
(a) Determination of Earn-Out. Sellers shall select an
accounting firm, reasonably acceptable to Buyer, and cause such firm to prepare
and deliver to Buyer, at Sellers' expense, not more than 30 days after the
Closing Date, a statement (the "Earn-Out Statement") based on the financial
statements of CSI for the nine months ended September 30, 1997, prepared in
accordance with GAAP, and showing (a) the aggregate amount of CSI's current
assets and current liabilities as of the Closing Date and the amount of the
Working Capital Adjustment (defined below), if any, (b) the calculation of the
amount of the Adjusted 1997 EBITDA (defined below) of CSI, and (c) the amount,
if any, by which the product of 4.5 multiplied by such Adjusted 1997 EBITDA
exceeds the sum of $5,700,000 plus Long-Term Debt (defined below) as of the
Closing Date. The amount of such excess (if any) reduced by the Working
Capital Adjustment (if any) is the "Earn-Out". For purposes of calculating the
Earn-Out, the financial statements of ▇▇▇▇▇▇▇ and Investments shall not be
taken into account.
(b) Certain Definitions Related to the Earn-Out.
(1) "GAAP" means U.S. generally accepted accounting
principles consistently applied.
CSI Purchase and Sale Agreement/Page 4
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(2) "Working Capital Adjustment" means the extent, if any,
to which 1.2 times current liabilities exceeds current assets,
based on current assets and current liabilities of CSI determined
as of the Closing Date in accordance with GAAP; provided however,
that (i) prepaid expenses shall be excluded from current assets
of CSI, (ii) current maturities of Long Term Debt shall be
excluded from current liabilities of CSI for purposes of
determining the Working Capital Adjustment, and (iii) CSI's claim
for "extra work" under its subcontract with HBH, Inc. dated April
__, 1997 (the "Extra Work Claim") shall be included as a current
asset.
(3) "Long-Term Debt" means the aggregate of all long-term
liabilities (including current maturities) of CSI owed to persons
other than Sellers and their affiliates as of the Closing Date,
including deferred taxes and capitalized lease obligations,
determined in accordance with GAAP.
(4) "Adjusted 1997 EBITDA" means the sum of (i) Net
After-Tax Income (as defined below), plus (ii) the amount of
income and franchise taxes deducted in the calculation of Net
After-Tax Income, plus (iii) the amount of depreciation and
amortization deducted in the calculation of Net After-Tax Income,
plus (iv) the amount of interest expense deducted in the
calculation of Net After-Tax Income (with amounts in clauses (i)
through (iv) above determined in accordance with GAAP),
determined with respect to the period from January 1, 1997
through September 30, 1997, and "annualized" by dividing such
amount by 9 and multiplying such amount by 12.
(5) "Net After-Tax Income" means, with respect to any
period, the aggregate net income (or loss) of CSI after deduction
for income, franchise and other taxes and without giving effect
to non-recurring gains and losses, interest income or investment
income, determined for such period in accordance with GAAP. Net
After Tax Income shall also be adjusted to exclude from the
calculation (a) any rents in excess of $7,000 per month paid or
accrued by CSI to Investments, (b) any life insurance premiums
paid by CSI on the life of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., (c) expenses
paid by CSI relating to the Companies' entertainment facilities,
(d) one-half of any amounts (excluding salary and life insurance)
paid by CSI with respect to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.'s travel and
entertainment on behalf of the Companies, (e) the book value of
the Excluded Assets and (f) the amount of any bonus paid to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ by the Companies after June 30, 1997 and prior
to the Closing Date.
(c) Review of Earn-Out Statement Buyer shall have the right to
review the Earn-Out Statement (and supporting work papers) and provide written
notice to Sellers of Buyer's objections with respect to any error, omission or
other discrepancy in the Earn-Out Statement (the "Discrepancy Notice") until 20
days following Buyer's receipt of the Earn-Out Statement. Buyer and Seller
shall work together in good faith to resolve any such dispute and agree on the
final Earn-Out Statement. In the event that Buyer and Seller cannot agree on
the final Earn-Out Statement within 10 days after delivery of Buyer's
Discrepancy Notice, Buyer and Seller shall refer the disputed issue
CSI Purchase and Sale Agreement/Page 5
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or issues to a national independent public accounting firm (other than the
regular accountants for any party or the accountants who prepared the Earn-Out
Statement which is reasonably acceptable to each party (the "Arbitrating
Accountants") within 15 days following delivery of Buyer's Discrepancy Notice.
The Arbitrating Accountants shall be instructed to render a decision, which
shall be binding upon both parties, within 20 days. Each party shall be
entitled to present any information or analysis concerning the matter in good
faith to the Arbitrating Accountants with a copy provided to the other party.
Buyer and Sellers shall each bear their own fees and expenses, and the fees and
expenses of the Arbitrating Accountants shall be shared equally by Buyer and
Sellers.
(d) Reduction for Long-Term Debt The cash portion of the
Purchase Price shall be reduced by an amount equal to the amount by which the
aggregate amount of the Companies' long-term debt as of the Closing Date
exceeds $5,500,000, unless the Buyer consents to any increase in such long-term
debt. For the purpose of this Section 2.1(d), the Companies' long-term debt
shall mean indebtedness of any Company to Transamerica Business Credit
Corporation or Bank of Sunset and Trust Company.
(e) Increase for Taxes. The cash portion of the Purchase Price
allocated to the purchase of the Investments Interests shall be increased by an
amount equal to the difference between (i) the taxes payable by the Sellers who
are the owners of the Investments Interests as a result of the purchase of the
Investments Interests pursuant hereto and (ii) the taxes which would have been
payable by such Sellers in the event that, on the Closing Date, Investments had
been a wholly-owned subsidiary of CSI which amount shall be grossed-up to
account for federal and state and local income taxes payable by Sellers with
respect to such additional amount (such grossed-up amount is the "Tax
Adjustment"). For purposes of determining the Sellers' tax liabilities
hereunder, such liabilities shall be computed based upon the Internal Revenue
Code of 1986, as amended, as in effect on the Closing Date and applicable state
and local income tax provisions, as in effect on the Closing Date.
2.2 Payment of Earn-Out. Within two days after the Buyer and Sellers
agree on the content of the Earn-Out Statement (but in no event later than
January 31, 1997), Buyer shall deliver payment of the Earn-Out to Sellers (if
the Earn-Out is greater than zero), allocated among the Sellers as set forth in
Schedule 1.2, by delivery of cash and TMS Common Stock in the same ratio as the
Purchase Price is paid pursuant to Section 1.2. For purposes of this Section
2.2, the TMS Shares delivered as payment of the Earn-Out shall have a value
equal to the lesser of: (1) the IPO Price, or (2) the average of the daily
closing prices (or if no closing price is reported, the average of the daily
closing bid and asked prices) of TMS Common Stock for the ten consecutive
trading days ending on and including the date that is three trading days prior
to the payment date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties by Sellers; Exhibit 3.1. Each
Seller represents and warrants to Buyer that the statements with respect to
such Seller contained in this Section 3.1
CSI Purchase and Sale Agreement/Page 6
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are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date and the Escrow Closing Date (as though
made then and as though such dates were substituted for the date of this
Agreement throughout this Section 3.1) except as set forth in the disclosure
schedule contained in Exhibit 3.1 attached hereto, delivered by the Sellers to
the Buyer on the date hereof and initialed by the parties hereto (the "Sellers
Disclosure Schedule"). The representations and warranties of each Seller are
made severally and are not made as to any other Seller. The Sellers Disclosure
Schedule will be arranged in sections and paragraphs corresponding to the
lettered and numbered sections and paragraphs contained in this Section 3.1.
The Sellers Disclosure Schedule constitutes an exception to each warranty or
representation set forth in this Section 3.1, whether or not such warranty or
representation specifically refers to the Sellers Disclosure Schedule,
accordingly each warranty or representation set forth in this Section 3.1 is
deemed to be preceded by the clause: "Except as set forth in the Sellers
Disclosure Schedule..."
(a) Qualification. Each Seller has the power and authority to own
his or her properties and assets and carry on his or her business and
affairs as currently conducted.
(b) Authority Relative to Agreement. Each Seller has the power and
authority to execute and deliver this Agreement. Each Seller has power and
authority to perform this Agreement and to consummate the transactions
contemplated on the part of such Seller hereby. To each Seller's
knowledge, no proceeding on the part of such Seller, and, except for those
approvals described in Exhibit 3.1(b) to this Agreement, no notice,
consent, authorization, order or approval of, filing or registration with,
any governmental commission, board or other regulatory body or any bank,
bonding company, lender, surety, customer, supplier, or any other person
whatsoever is required for or in connection with the execution and delivery
of this Agreement by such Seller. To each Seller's knowledge, no
proceeding on the part of such Seller, and no notice, consent,
authorization, order or approval of, filing or registration with, any
governmental commission, board or other regulatory body or any bank,
bonding company, lender, surety, customer, supplier, or any other person
whatsoever is required for or in connection with the performance of this
Agreement by such Seller and the consummation by such Seller of the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by each Seller and is a valid and binding Agreement of such
Seller, enforceable against such Seller in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws relating to
creditors' rights generally or general principles of equity (whether
considered in a proceeding in equity or at law) or by public policy
applicable to securities laws.
(c) Non-Contravention. To each Seller's knowledge, except as
provided in Exhibit 3.1(c) to this Agreement, the execution, delivery and
performance of this Agreement by such Seller does not, and the consummation
by such Seller of the transactions contemplated hereby will not, conflict
with, or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation, or acceleration of any obligation or to the loss of a
material benefit under, or
CSI Purchase and Sale Agreement/Page 7
14
result in the creation or imposition of any material lien, charge, pledge,
security interest or other encumbrance upon any of the property or assets
of any of the Companies pursuant to any provision of, any mortgage, lien,
lease, agreement, license, instrument, law, ordinance, regulation, order,
arbitration award, judgment or decree to which any of the Companies is a
party or by which any of the Companies' respective assets are bound. To
each Seller's knowledge, except as provided in Exhibit 3.1(c) to this
Agreement, the execution, delivery and performance of this Agreement by
each Seller does not and the consummation by such Seller of the
transactions contemplated hereby will not violate or conflict with any
other restriction of any kind or character to which any Company is subject
or by which the Companies' respective assets may be bound.
(d) Ownership of Company Common Stock. Each Seller is, and on the
Closing Date and the Escrow Closing Date will be, the record and
beneficial owner of the number of CSI Shares or Investment Interests, as
the case may be, set forth opposite such Seller's name on Exhibit 3.1(d) to
this Agreement. Each Seller is the record and beneficial owner of his or
her shares of such capital stock or membership interests, as the case may
be, free and clear of all liens, claims, encumbrances and rights of others
of any nature whatsoever, with full power to vote all such shares on any
matter that may properly come before shareholders or members, as the case
may be, of the Companies, and the Seller may exercise such voting power on
any matter without violation of the rights of any person. There are no
rights, warrants or options outstanding with respect to the capital stock
or membership interests, as the case may be, owned by such Seller and
Seller has no obligation to deliver capital stock or membership interests,
as the case may be, of the Companies or any of their respective
Subsidiaries to any person as of the date hereof, at any time on or prior
to the Escrow Closing Date, thereafter or as a result thereof or in
connection therewith except as provided in this Agreement.
(e) Restricted Securities.
(1) Each Seller acknowledges that the shares of TMS Common Stock
which Seller may acquire pursuant to this Agreement have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and, if acquired pursuant to this Agreement, are
being acquired for each Seller's own account. If acquired pursuant to
this Agreement, the TMS Common Stock will be subject to Article 8
below.
(2) Each Seller has the knowledge and experience in financial
and business matters to enable him or her to evaluate the merits and
risks of approving this Agreement and the transactions contemplated
herein, and, if applicable, acquiring shares of TMS Common Stock.
(3) Each Seller is able to bear the economic risks of his or her
investment in the TMS Common Stock, if any, including the risk of a
complete loss of the value of TMS Common Stock.
CSI Purchase and Sale Agreement/Page 8
15
(4) Each Seller has been represented by legal counsel in this
transaction and such Seller and his or her representatives, including
such counsel, have been given the opportunity to ask questions of, and
receive answers from, the officers of the Buyer concerning the terms
of the transactions contemplated by this Agreement and the affairs and
the business and financial condition of the Buyer.
(5) Each Seller has received a confidential private placement
memorandum concerning the Buyer and an investment in shares of TMS
Common Stock, and each Seller and his or her representatives have been
given such access to all documents, books and additional information
concerning Buyer which they have requested regarding Buyer.
(6) Each Seller has conducted such investigations by himself or
herself and through his or her representatives in making a decision to
enter into this Agreement and the transactions contemplated in Article
1 herein as such Seller has deemed necessary and advisable.
(7) Each Seller acknowledges and agrees that the TMS Common
Stock issued to such Seller, if any, may not be disposed of except in
accordance with the provisions of Article 8 hereof and the applicable
Registration Rights Agreement.
(8) None of the representations made by the Sellers in this
Section 3.1(e) shall affect any of Seller's rights under any other
section of this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES OF SELLERS AND CSI; EXHIBIT 3.2.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and CSI, jointly and severally, represent and warrant
to Buyer that the statements contained in Exhibit 3.2 attached hereto are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date and the Escrow Closing Date (as though made
then and as though such dates were substituted for the date of this Agreement
throughout Exhibit 3.2) except as otherwise set forth in the disclosure
schedule delivered by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and CSI to Buyer on the date
hereof and initialed by the parties hereto (the "CSI Disclosure Schedule").
The CSI Disclosure Schedule will be arranged in sections and paragraphs
corresponding to the lettered and numbered sections and paragraphs contained in
Exhibit 3.2. The CSI Disclosure Schedule constitutes an exception to each
warranty or representation set forth in Exhibit 3.2, whether or not such
warranty or representation specifically refers to the CSI Disclosure Schedule,
accordingly each warranty or representation set forth in Exhibit 3.2 is deemed
to be preceded by the clause: "Except as set forth in the CSI Disclosure
Schedule..."
3.3 REPRESENTATIONS AND WARRANTIES OF SELLERS AND ▇▇▇▇▇▇▇; EXHIBIT 3.3.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇, jointly and severally, and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, jointly and severally, represent and warrant to Buyer that
the statements contained in Exhibit 3.3 attached hereto are correct and
complete as of the date of this Agreement and will be correct and complete as
of the Closing Date and the Escrow Closing Date (as though made then and as
though such dates were substituted for the date of this Agreement throughout
Exhibit 3.3), except as otherwise
CSI Purchase and Sale Agreement/Page 9
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set forth in the disclosure schedule delivered by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ to Buyer on the date hereof and initialed by the
parties hereto (the "▇▇▇▇▇▇▇ Disclosure Schedule"). The representations of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ are made severally and each of
them is not making any representation or warranty regarding any other Seller.
The ▇▇▇▇▇▇▇ Disclosure Schedule will be arranged in sections and paragraphs
corresponding to the lettered and numbered sections and paragraphs contained in
Exhibit 3.3. The ▇▇▇▇▇▇▇ Disclosure Schedule constitutes an exception to each
warranty or representation set forth in Exhibit 3.3, whether or not such
warranty or representation specifically refers to the ▇▇▇▇▇▇▇ Disclosure
Schedule, accordingly each warranty or representation set forth in Exhibit 3.3
is deemed to be preceded by the clause: "Except as set forth in the ▇▇▇▇▇▇▇
Disclosure Schedule..."
3.4 REPRESENTATIONS AND WARRANTIES OF SELLERS AND INVESTMENTS; EXHIBIT
3.4. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and Investments, jointly and severally, and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and Investments, jointly and severally, represent and warrant to Buyer
that the statements contained in Exhibit 3.4 attached hereto are correct and
complete as of the date of this Agreement and will be correct and complete as
of the Closing Date and the Escrow Closing Date (as though made then and as
though such dates were substituted for the date of this Agreement throughout
Exhibit 3.4), except as otherwise set forth in the disclosure schedule
delivered by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Investments to Buyer on
the date hereof and initialed by the parties hereto (the "Investments
Disclosure Schedule"). The Investments Disclosure Schedule will be arranged in
sections and paragraphs corresponding to the lettered and numbered sections and
paragraphs contained in Exhibit 3.4. The representations of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ are made severally and each of them is not making any
representation or warranty regarding any other Seller. The Investments
Disclosure Schedule constitutes an exception to each warranty or representation
set forth in Exhibit 3.4, whether or not such warranty or representation
specifically refers to the Investments Disclosure Schedule, accordingly each
warranty or representation set forth in Exhibit 3.4 is deemed to be preceded by
the clause: "Except as set forth in the Investments Disclosure Schedule..."
3.5 REPRESENTATIONS AND WARRANTIES BY THE BUYER. The Buyer represents and
warrants to the Sellers and the Companies that the statements contained in this
Section 3.5 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date and the Escrow Closing Date (as
though made then and as though such dates were substituted for the date of this
Agreement throughout this Section 3.5), except as set forth in the disclosure
schedule delivered by the Buyer to the Sellers and Investments on the date
hereof and initialed by the parties hereto (the "Buyer Disclosure Schedule").
The Buyer Disclosure Schedule will be arranged in sections and paragraphs
corresponding to the lettered and numbered sections and paragraphs contained in
this Section 3.5.
(a) Organization and Qualification, etc. The Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, has corporate power and authority and, to the knowledge
of Buyer, all licenses, permits, titles and authorizations necessary, to
own all of its properties and assets and to carry on its business as it is
now being conducted and is duly qualified to do business and is in good
standing in
CSI Purchase and Sale Agreement/Page 10
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each jurisdiction as set forth in Schedule 3.5(a) of the Buyer Disclosure
Schedule where, to the reasonable belief of Buyer, such qualification is
appropriate. The copies of the Buyer's Certificate of Incorporation and
Bylaws, as amended to date, which have been delivered to Sellers are
complete and correct, and such instruments, as so amended, are in full
force and effect at the date hereof.
(b) Capital Stock. The entire authorized capital of Buyer consists
of 25,000,000 shares of capital stock which is divided into (1) 3,000,000
shares of restricted common stock having a par value of $.001 per share,
(ii) 20,000,000 shares of common stock having a par value of $.001 per
share (i.e., TMS Common Stock), and (3) 2,000,000 shares of preferred stock
having a par value of $.001 per share. As of the date hereof, 1,256,000
shares of TMS Common Stock are validly issued and outstanding, fully paid
and non-assessable. No shares of the capital stock of Buyer have been
issued in violation of the preemptive rights of any past or present
shareholder. Except as set forth in Schedule 3.5(b) of the Buyer
Disclosure Schedule, there are no outstanding subscriptions, shares of
capital stock, calls, warrants, options, contracts, commitments, or demands
relating to the capital stock of Buyer or other agreements of any character
under which Buyer would be obligated to issue or purchase shares of its
capital stock. There is no voting agreement, voting trust, proxy or other
agreement or understanding with respect to the voting of the capital stock
of Buyer. Buyer has no commitments to issue or sell any securities or
obligations convertible into or exchangeable for, or giving any person any
right to subscribe for or acquire from Buyer, any shares of its capital
stock and no securities or obligations evidencing any such rights are
outstanding, except as set forth in Schedule 3.5(b).
(c) Subsidiaries, etc. Buyer does not own of record or beneficially,
directly or indirectly, (1) any shares of outstanding capital stock or
securities convertible into capital stock of any other corporation or (2)
any participating interest in any partnership, joint venture or other
non-corporate business enterprise. Except as described on Schedule 3.5(c)
of the Buyer Disclosure Schedule, neither Buyer nor any subsidiary of Buyer
owns or has any right or obligation to acquire any class of securities
(including, without limitation, debt securities) issued by any person or
company, and neither Buyer nor any subsidiary of Buyer is a party to or
bound by any partnership, joint venture, or voluntary association with any
person for the conduct of any business.
(d) Authority Relative to Agreement. Buyer has the corporate power
and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated on the part of Buyer hereby. The
execution and delivery by Buyer of this Agreement and the consummation by
Buyer of the transactions contemplated on its part hereby have been duly
authorized by its Board of Directors. No other corporate proceedings on
the part of Buyer are necessary to authorize the execution and delivery of
this Agreement by Buyer. Except for corporate action related to the IPO,
no other corporate proceedings on the part of Buyer are necessary to
authorize the performance of this Agreement by Buyer or the consummation by
Buyer of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Buyer and is enforceable against Buyer in
accordance
CSI Purchase and Sale Agreement/Page 11
18
with its terms, except as enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
relating to creditors' rights generally or general principles of equity
(whether considered in a proceeding in equity or at law) or by public
policy applicable to securities laws.
(e) Non-Contravention. The execution, delivery and performance of
this Agreement by Buyer do not and the consummation by Buyer of the
transactions contemplated hereby will not (1) violate any statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, government agency, or court to which
Buyer or any of its assets is subject or (2) violate any provision of the
Certificate of Incorporation or Bylaws of Buyer, or (3) violate or result
in, with the giving of notice or the lapse of time or both, the violation
of any provision of, or result in the acceleration of or entitle any party
to terminate or accelerate (whether after the giving of notice or lapse of
time or both) any obligation under, or result in the creation or imposition
of any lien, charge, pledge, security interest or other encumbrance upon
any of the property of Buyer pursuant to any provision of any mortgage,
lien, lease, agreement, contract, license, or instrument to which Buyer is
a party or by which any of its assets is bound.
(f) Approvals. Except for the declaration of effectiveness of the
registration statement ("Registration Statement") filed in connection with
Buyer's IPO by the U.S. Securities and Exchange Commission ("SEC") pursuant
to the Securities Act, and the consents and approvals required pursuant to
state securities laws with respect to the IPO, and except as set forth in
Schedule 3.5(f) of the Buyer Disclosure Schedule, no notice, consent,
authorization, order or approval of, or filing or registration with, any
governmental commission, board or other regulatory body or any other person
is required for or in connection with the execution, delivery and
performance of this Agreement and the consummation by Buyer of the
transactions contemplated hereby.
(g) Litigation. There are no actions, claims, proceedings,
arbitrations or governmental investigations pending against, relating to or
affecting Buyer or any of its assets or properties at law or in equity,
before or by any federal, state, or municipal court, agency or other
governmental entity, or by any other person nor, to Buyer's knowledge, are
any such matters threatened.
(h) Brokers. Other than ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company, Inc., all
negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Buyer directly with Sellers and the
Companies, without the intervention of any person on behalf of Buyer in
such manner as to give rise to any valid claim by any person against Buyer
for a finder's fee, brokerage commission, or similar payment.
(i) Investment Intent.
CSI Purchase and Sale Agreement/Page 12
19
(a) Buyer is acquiring the CSI Shares and the Investments
Interests solely for the purpose of investment, for its own account
and not with a view to or for sale in connection with any distribution
thereof within the meaning of Section 2(11) of the Securities Act.
Buyer acknowledges that the CSI Shares and the Investments Interests
are being sold to Buyer by each of the Sellers in reliance upon one or
more exemptions from registration contained in the Securities Act and
applicable state securities laws. The reliance by Sellers upon such
exemptions is based in part upon the representations set forth in this
Section 3.5(i).
(b) Buyer understands that the CSI Shares and the Investments
Interests have not been registered under the Securities Act, that it
has no right to demand the registration of the CSI Shares or the
Investments Interests under the Securities Act to permit them to be
resold, that there is no assurance that CSI or Investments will file
any such registration in the future, that there is no established
market for the CSI Shares or the Investments Interests and that there
is no likelihood one will develop. Buyer understands and agrees that
the CSI Shares and the Investments Interests must be held indefinitely
and cannot be transferred unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available with respect to such transfer.
(c) Buyer has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks
of an investment in the CSI Shares and the Investments Interests and
of making an informed investment decision.
(d) Buyer is able to bear the economic risk of its investment in
the CSI Shares and the Investments Interests, to hold the CSI Shares
and the Investments Interests for an indefinite period of time and to
afford a complete loss of its investment in the CSI Shares and the
Investments Interests.
(e) Buyer and its representatives have been given access to all
documents, books and additional information concerning CSI, ▇▇▇▇▇▇▇
and Investments which they have requested.
(f) Buyer has been represented by legal counsel in this
transaction and Buyer and its representatives, including such counsel,
have been given the opportunity to ask questions of, and receive
answers from, the officers of CSI concerning the terms of the
transactions contemplated by this Agreement and the affairs and the
business and financial condition of CSI, ▇▇▇▇▇▇▇ and Investments.
CSI Purchase and Sale Agreement/Page 13
20
(g) Buyer has conducted such investigations in making a decision
to enter into this Agreement and the transactions contemplated in
Article I herein as Buyer has deemed necessary and advisable.
(h) None of the representations made by Buyer in this Section
3.5(i) shall affect any of Buyer's rights under any other section of
this Agreement.
(i) Buyer Offering Documents. Buyer has delivered to each of
the Sellers a confidential private placement memorandum, and will
deliver to each of the Sellers prior to the Closing Date a copy of any
registration statement prepared by it, in the form (including exhibits
and any amendments thereto) filed with the SEC (collectively, the
"Buyer Offering Documents"). As of their respective dates, the Buyer
Offering Documents (i) were prepared in all material respects in
accordance with the applicable requirements of the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations thereunder, and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading.
ARTICLE 4
ADDITIONAL COVENANTS AND AGREEMENTS
4.1 CONDUCT OF BUSINESS. During the period from the date hereof to the
Closing Date, except as otherwise contemplated by this Agreement, Sellers shall
use reasonable efforts to cause each of the Companies to, and each of the
Companies shall use reasonable efforts to, conduct its operations according to
its ordinary and usual course of business, subject to the foregoing, to
preserve substantially intact its business organization, keep available the
services of its officers and employees, and maintain its present relationships
with licensors, suppliers, distributors, customers and others having
significant business relationships with it. Representatives of the Companies
will confer with representatives of Buyer to keep it informed with respect to
the general status of the on-going operations of the business of such Company.
Without limiting the generality of the foregoing, Sellers will use reasonable
efforts to cause each of the Companies to:
(a) carry on its business in substantially the same manner as
heretofore carried on and not introduce any material new method of
management, operation or accounting, nor provide discounted services
outside the ordinary course of business;
(b) maintain its properties, facilities, equipment and other
assets, including those held under leases, in good working order,
condition and repair, ordinary wear and tear excepted;
(c) perform all of its obligations under all debt and lease
instruments and other agreements relating to or affecting its
business, assets, properties, equipment and rights, and
CSI Purchase and Sale Agreement/Page 14
21
pay all vendors, suppliers, and other third parties (including
mechanics and materialmen) as and when their bills are payable in the
ordinary course of business and pay in full all payroll obligations
when due;
(d) maintain its present debt and lease instruments (unless same
are otherwise mature) and refrain from entering into new or amended
debt or lease instruments (other than expansion of CSI's existing line
of credit with Iberia Savings Bank ("ISB") which CSI is currently
negotiating) without prior written consent of Buyer;
(e) not incur any indebtedness other than ordinary trade
accounts payable in the ordinary course of business and other than
borrowings under the ISB line of credit;
(f) keep in full force and effect its present insurance policies
or other comparable insurance coverage;
(g) use reasonable efforts to maintain and preserve its business
organization intact, retain its present employees and maintain its
relationship with suppliers, customers and others having business
relations with such Company;
(h) refrain from effecting any change in the certificate of
incorporation, certificate of organization , bylaws, regulations (or
other organizational document) or capital structure of the Company and
refrain from entering into or agreeing to enter into any merger or
consolidation by the Company with or into, and refrain from acquiring
all or substantially all of the assets, capital stock or business of,
any person, corporation, partnership, association or other business
organization or division of any thereof, provided that nothing herein
shall prohibit the contemplated acquisition by CSI of the capital
stock of ▇▇▇▇▇▇▇;
(i) refrain from incurring any expenditures outside the normal
course of business, including any capital expenditures (or series of
related expenditures) in excess of $50,000, without prior written
notification to Buyer, except capital expenditures related to the
installation of two ▇▇▇▇▇▇▇ pump packages below deck and a moon pool
on M/V Discovery;
(j) refrain from starting or acquiring any new businesses which
might reasonably be expected to have a material adverse effect on the
value of any Company, without prior written notification to Buyer;
(k) other than in the normal course of business, refrain from
increasing its present salaries and commission levels for all
officers, directors, managers, employees or agents, refrain from
entering into an employment agreement except in the ordinary course of
business, and refrain from entering into any collective bargaining
agreement; and
(l) refrain from declaring or paying any fees, commissions or
loans outside the ordinary course of business, and refrain from
declaring or paying any bonuses except (i) bonuses under any Company's
existing contractual commitments to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
CSI Purchase and Sale Agreement/Page 15
22
and (ii) discretionary bonuses to officers and employees to the extent
that the aggregate amount of all such discretionary bonuses paid or
declared during 1997 do not exceed, in the aggregate, 10% of the
Company's pre- tax net income during 1997 through the date of the
latest such payment; and
(m) refrain from declaring or paying any dividends or
distributions to any shareholders or members, as the case may be
(including Sellers), directors, managers, sales agents, employees or
other personnel, except for (i) any open account debt from any Seller
in favor of any Company, (ii) the Excluded Assets, and (iii) any other
dividends and distributions to shareholders paid or declared after
June 30, 1997 which in the aggregate do not exceed 42% of the
Company's pre-tax net income during 1997 through the date of the
latest such distribution.
(n) promptly notify Buyer of the receipt by them or the Company
of any notice or claim, written or oral, of (a) default or breach by
the Company under, or of any termination (other than at the end of the
stated term thereof) or cancellation, or threat of termination (other
than at end of the stated term thereof) or cancellation, of any
contract, lease, permit or license (or series of related agreements,
contracts, leases, permits and licenses ) involving more than $50,000
to which the Company or its subsidiaries as set forth on the
Disclosure Schedules hereto is a party or by which any of them is
bound, (b) any loss of, damage to or disposition of, any of the
properties, assets or the products of the Company of a value of
$50,000 or more, singly or in the aggregate (other than the sale or
use in the ordinary course of business), (c) any claim or litigation
threatened or instituted, or any other adverse event or occurrence
involving or affecting the Company or its assets, properties,
operations, businesses or employees, and (d) any proposal made by any
third party received by the Company or of which any Seller obtains
knowledge in respect of any sale or other disposition, direct or
indirect, of the assets (other than the sale or use of inventories in
the ordinary course of business), businesses or outstanding capital
stock or other ownership or voting interests of the Company;
(o) comply with and cause to be complied with all applicable
laws, rules, regulations and orders of all federal, state and local
governments or governmental agencies affecting or relating to the
Company or its assets, properties, operations, businesses or employees
except where the failure to comply will not have a material adverse
effect on the Company;
(p) except as provided in Section 4.1(m) hereof, refrain from
any sale, disposition, distribution or encumbrance of any of its
properties or assets (except the Excluded Assets) and refrain from
entering into any agreement or commitment with respect to any such
sale, disposition, distribution or encumbrance (other than sales in
the ordinary course of business);
(q) refrain from any purchase or redemption of any capital stock
or other voting interest of the Company and refrain from issuing any
capital stock or other voting interest,
CSI Purchase and Sale Agreement/Page 16
23
provided that nothing herein shall prohibit the contemplated
acquisition by CSI of the capital stock of ▇▇▇▇▇▇▇;
(r) refrain from making any change in any accounting principle,
classification, policy or practice;
(s) manage working capital in the ordinary course consistent
with past practice and except as consistent with past practice,
refrain from providing any discounted services or products,
discounting any receivables or taking any action to accelerate payment
of any receivable prior to its due date; and
(t) without notice to Buyer, refrain from entering into any
contract, lease, undertaking, commitment, mortgage, indenture, note,
security agreement, license or other agreement outside the ordinary
course of business (a) involving the receipt or expenditure of more
than $50,000 over the term thereof, (b) containing provisions calling
for the sale or purchase of products or services at prices that vary
from the Company's customary prices of such products or services, (c)
which include "meet or release", "most favored nations" or similar
pricing or delivery arrangements, (d) with any officer, director,
shareholder or affiliate of the Company, (e) requiring the Company to
indemnify or hold harmless any other person or entity, (f) evidencing
any warranty obligation of the Company with respect to services or
products sold or leased by it (other than warranties given in the
normal course of business containing substantially the same terms as
those presently in effect), or (g) imposing on the Company any
confidentiality, non-disclosure or non-compete obligation.
4.2 ACCESS TO INFORMATION. Until the Closing Date or termination of
this Agreement, Sellers will furnish to Buyer unaudited monthly financial
statements of CSI and ▇▇▇▇▇▇▇ in a form consistent with the past practices of
such Company for each month following May 1997 promptly as available, but in no
event more than 20 days following the end of such month. Buyer may prior to
the Closing have access to the business and properties of the Companies and
information concerning their financial and legal condition as Buyer deems
necessary or advisable in connection with the consummation of the transactions
contemplated hereby, provided that such access shall not interfere with normal
operations of the Companies. Sellers and the Companies agree to permit Buyer
and its authorized representatives, or cause them to be permitted to have,
after the date hereof and until the Closing Date, full access to the premises,
books and records of the Companies during normal business hours, and the
officers of the Companies will furnish Buyer with such financial and operating
data and other information with respect to the business and properties of the
Companies as Buyer shall from time to time reasonably request; provided Buyer
shall promptly notify the Sellers in the event that information comes to the
attention of Buyer which would indicate that any of the representations and
warranties of Sellers and the Companies are incorrect.
(b) From the date hereof through the Closing Date, Buyer will provide
the Companies and Sellers with prompt written notice of any material adverse
change in the financial condition, results of operations, business or prospects
of Buyer. From the date hereof through the Closing Date,
CSI Purchase and Sale Agreement/Page 17
24
the Companies will provide Buyer with prompt written notice of any material
adverse change in the financial condition, results of operations, business or
prospects of any of the Companies.
4.3 AMENDMENT TO DISCLOSURE SCHEDULES. Each party hereto agrees that,
with respect to the representations and warranties of such party contained in
this Agreement, such party shall have the continuing obligation until Closing
to supplement or amend promptly each of the CSI Disclosure Schedule, the
▇▇▇▇▇▇▇ Disclosure Schedule , the Investments Disclosure Schedule, the Sellers
Disclosure Schedule and the Buyer Disclosure Schedule (individually a
"Disclosure Schedule" and collectively, the "Disclosure Schedules") with
respect to any matter that would have been or would be required to be set forth
or described in the Disclosure Schedules in order to not materially breach any
representation, warranty or covenant of such party contained herein. For all
purposes of this Agreement, including without limitation for purposes of
determining whether the conditions set forth in Section 5.1 and Section 5.2
have been fulfilled, the Disclosure Schedules hereto shall be deemed to be the
Disclosure Schedules as amended or supplemented pursuant to this Section. In
the event that Buyer, any Company or Sellers seeks to amend or supplement a
Disclosure Schedule pursuant to this Section 4.3 and, if such amendment or
supplement to a Disclosure Schedule proposed by Buyer constitutes or reflects,
in the reasonable judgment of Sellers, individually or in the aggregate, a
materially adverse change to the business or assets of the Buyer, or an
amendment or supplement to a Disclosure Schedule proposed by any of the
Companies or Sellers constitutes or reflects, in the reasonable judgment of
Buyer, individually or in the aggregate, a material adverse change to the
business or assets of the Companies, the Sellers or the Buyers, respectively,
may elect to terminate this Agreement, in which case this Agreement shall be
deemed terminated by mutual written consent as set forth in Section 6.1(a)
hereof.
4.4 CONFIDENTIALITY. The provisions of this Section 4.4 shall supersede
and replace all prior agreements and understandings of the parties with respect
to the subject matter hereof.
(a) Confidential Information. Until the closing of the transactions
contemplated herein, all Confidential Information, as hereinafter defined,
acquired by Buyer with respect to Sellers or the Companies, or by Sellers
or the Companies with respect to Buyer, shall be (i) maintained in strict
confidence, (ii) used only for the purpose of and in connection with
evaluating the transactions contemplated herein, and (iii) disclosed only
to employees and duly authorized agents and representatives who have been
informed of the obligations of the parties under this Agreement with
respect to such Confidential Information, who have a need to know the
information in connection with consummating the transactions contemplated
herein, and who agree to keep such information confidential. Buyer,
Sellers and the Companies shall be responsible for any breach of this
Section by any of their respective representatives and each agrees to take
all reasonable measures to restrain its representatives from prohibited or
unauthorized disclosure of the Confidential Information. For the purpose
of this Agreement, the term "Confidential Information" shall mean all
information acquired by any party from another party hereto or its
representatives pursuant to Section 4.2 hereof or otherwise with respect to
the business or operations of such other party, other than (A) information
generally available to the public which has not become available as a
result of disclosure in violation of this Section and (B) information which
becomes available on a
CSI Purchase and Sale Agreement/Page 18
25
nonconfidential basis from a source other than a party to this Agreement or
its representatives, provided that such source is not known by the party to
this Agreement receiving such information to be bound by a confidentiality
agreement or other obligation of secrecy to another party to this Agreement
or its representatives. If the transactions contemplated herein are not
consummated, all Confidential Information in written or printed or other
tangible form (whether copies or originals) shall be returned to the party
of origin, and all documents, memoranda, notes and other writings
whatsoever prepared by any party or its representatives based on
Confidential Information shall be destroyed.
(B) PUBLIC ANNOUNCEMENTS. No press release, public announcement,
confirmation or other information regarding this Agreement or the contents
hereof shall be made by Buyer, Sellers or the Companies without the prior
consultation of the Buyer and the Companies, except as may be necessary in
the opinion of counsel to any party to meet the requirements of any
applicable law or regulations, the determination of any court, or the
requirements of any stock exchange on which the securities of such party
may be listed. Notwithstanding the foregoing, each Company may make
appropriate disclosures of the general nature of the transaction
contemplated hereby to its employees, vendors and customers to protect such
Company's goodwill and to facilitate the consummation of the transactions
contemplated hereby, and Buyer may disclose pertinent information regarding
the transaction contemplated hereby to its existing and prospective
investors, lenders or investment bankers or financial advisors for the
purposes of obtaining financing (including the contemplated IPO). Buyer
may also make appropriate disclosures of the general nature of the
transaction contemplated hereby and the identity, nature and scope of the
Companies' operations to prospective acquisition candidates in its efforts
to attract additional acquisitions for Buyer. Buyer may also make
appropriate disclosure as required in connection with any registration
statement or confidential information memorandum prepared by Buyer. Buyer
and the Companies shall jointly approve the contents of any press releases,
written employee presentations, or other materials of potentially wide
distribution that disclose or refer to the transaction contemplated hereby,
except for such press releases or other communications required by law.
4.5 PRINCIPAL OFFICE. Buyer agrees that it will maintain the principal
office of CSI (or Buyer's division operating CSI's assets) at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ for a period of 12 months after the Closing Date,
and represents and warrants to the Sellers that it has no present plans or
intentions to move such principal office after such time.
4.6 EXCLUSIVITY. After the signing of this Agreement, until December 31,
1997 or the earlier termination of the Agreement, Sellers shall not (i)
solicit, initiate, or encourage the submission of any proposal of offer from
any person or entity relating to the acquisition of any capital stock or other
voting securities, or any substantial portion of the assets of the Companies
(including any acquisition structured as a merger, consolidation, or share
exchange) or (ii) participate in any negotiations or discussions regarding,
furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any person or entity in
favor of such acquisition structured as a stock purchase, sale of assets,
merger, consolidation, or share
CSI Purchase and Sale Agreement/Page 19
26
exchange. Sellers will (and shall cause the Companies to) notify Buyer if any
person or entity makes any proposal, offer, inquiry, or contact with respect to
any of the foregoing.
4.7 RELEASE OF SELLERS' GUARANTEES. At or prior to the Closing Date,
Buyer will use its best efforts to obtain the release of Sellers and their
respective affiliates, heirs, successors and assigns from any and all personal
guarantees previously given by Sellers to secure the long-term debt obligations
(as defined in Section 2.1(d) hereof) of any Company, the obligations of any
Company to Iberia Savings Bank or the performance bonds of any Company. In the
event that Buyer is unable to obtain such releases from any of the Companies'
lenders, at the Closing Buyer shall cause such Company to pay off or otherwise
retire all of such Company's indebtedness up to a maximum of $5,500,000.
4.8 SELLERS' RELEASE OF CLAIMS. Effective as of the Closing Date, except
as provided herein, the Sellers do hereby (i) release, acquit and forever
discharge each of the Companies and each of their respective subsidiaries that
are listed on the Disclosure Schedules (all of such subsidiaries of the
Companies being referred to collectively as the "Company Subsidiaries") from
any and all liabilities, obligations, indebtedness, claims, demands, actions or
causes of action arising from or relating to any event, occurrence, act,
omission or condition occurring or existing on or prior to Closing, including,
without limitation, any claim for indemnity or contribution from the Companies
or the Company Subsidiaries in connection with the obligations or liabilities
of the Sellers hereunder, except for indemnification to which a Seller may be
entitled as an officer, director, employee or agent of a Company, and salary
and benefits payable to a Seller as an employee in the ordinary course of
business; (ii) waive all breaches, defaults or violations of each agreement to
which such Seller is a party, if any, applicable to the CSI Shares or any of
the Companies, and agree that any and all such agreements are terminated as of
Closing, and (iii) waive any and all preemptive or other rights to acquire any
shares of capital stock of (or other equity interest in) any of the Companies
and release any and all claims arising in connection with any prior default,
violation or failure to comply with or satisfy any such preemptive or other
rights.
4.9 REAL ESTATE MATTERS.
(a) Title Insurance Commitments. Buyer, in its sole discretion, may
elect to obtain title insurance with respect to any or all real estate that
any of the Companies owns or leases as listed on the Disclosure Schedules
delivered in connection with this Agreement (the "Title Insurance
Property"). If Buyer elects to obtain such title insurance, it shall
notify Sellers in writing on or before August 29, 1997, and Sellers will
cause the Companies to obtain and deliver to Buyer (at Buyer's expense), as
soon as practicable, and in any event on or before September 15, 1997,
commitments for title insurance ("Title Commitments") issued by title
insurance company(ies) reasonably acceptable to Buyer with respect to the
Title Insurance Property, Surveys (defined below) of the Title Insurance
Property prepared by surveyors reasonably acceptable to the Buyer and one
set of legible copies of title exception documents with respect to any
exceptions set forth in the commitments. The Title Commitments shall set
forth the status of title to the Title Insurance Property together with all
exceptions or conditions to such title, including, but not limited to, all
easements,
CSI Purchase and Sale Agreement/Page 20
27
restrictions, rights-of-way, covenants, reservations and all other
encumbrances affecting the Title Insurance Property which would appear in
an Owner's Policy of Title Insurance (as defined below), if issued (such
matters, "Title Commitments Exceptions"). The Title Commitments shall
contain the express commitment of the title underwriter to issue the
Owner's Policies of Title Insurance to the Companies with the standard
printed exceptions endorsed or deleted in accordance with this Section 4.9.
(b) Surveys. With respect to each Title Insurance Property, Sellers
will cause the Companies, at Buyer's expense, to procure in preparation for
the Closing a current survey of such real property, prepared by a licensed
surveyor and conforming to current ALTA Minimum Detail Requirements for
Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters shown
customarily on such surveys, and showing access affirmatively to public
streets and roads (the "Surveys"). The Surveys shall disclose any survey
defect or encroachment from or onto the real property.
(c) Title Insurance Policies. On the Closing Date, if Buyer has
elected to obtain title insurance as set forth in Section 4.9(a), the
Companies shall deliver to Buyer, at Buyer's expense, title insurance
policies ("Policies of Title Insurance") with respect to the Title
Insurance Property, in an amount reasonably acceptable to Buyer, but in no
event greater than the values of the real property to be insured, issued by
the title insurance company(ies) that issued the Title Commitments, subject
to the Title Commitments Exceptions. The Policies of Title Insurance may
be subject to the Title Commitments Exceptions but shall contain no
additional exceptions other than the standard preprinted exceptions
provided that (i) the standard preprinted survey exception, if any, shall
be revised to read "shortages in area" only, (ii) there shall be no
exception as to easements, or claims of easements, not shown by the public
records, nor any exception as to parties in possession, and (iii) the
exception as to the lien for taxes will be limited to the year in which the
Closing occurs. The Policies of Title Insurance delivered under this
Section 4.9 shall insure title to the real property and all recorded
easements benefitting such real property.
(d) Phase I Environmental Assessment. The Sellers will cause the
Companies to obtain and deliver to Buyer, as soon as practicable, and in
any event on or before September 22, 1997, a Phase I environmental
assessment prepared by environmental engineers reasonably acceptable to
Buyer with respect to all of the real estate owned or leased by the
Companies listed on the Disclosure Schedules delivered by the Companies
(the "Environmental Assessment Property"). Buyer shall be responsible for
one-half of the cost and expenses incurred by Sellers in obtaining such
Phase I environmental assessments. Also during the period prior to
Closing, Sellers and the Companies shall afford Buyer and its
representatives the continuing right to inspect, during the Company's
normal business hours, the Environmental Assessment Property and all books,
records, contracts, documents and other data pertaining to the use,
ownership, operation, or maintenance of the Environmental Assessment
Property (collectively with the phase I assessment, the "Studies").
CSI Purchase and Sale Agreement/Page 21
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(e) Title and Environmental Objections. If for any reason Buyer, in
its sole and absolute discretion, is not satisfied with any matter
contained in the Studies, the Surveys, or the Title Commitments or is
otherwise not satisfied with the real property owned or leased by the
Companies for any reason whatsoever, then Buyer may notify the Companies
and Sellers in writing of its objection (the "Objections") no later than
September 30, 1997 ("Objection Date"), describing with specificity the
subject real property and the Objections thereto, and, at the sole
discretion of Buyer, the Buyer may either (i) terminate this Agreement in
accordance with Section 6.1(b) hereof, (ii) proceed to Closing, the Buyer
being deemed to have approved and to have agreed to all matters contained
in the Studies, the Surveys and the Title Commitments and all other matters
affecting the real property owned or leased by the Companies, or (iii)
enter into negotiations with the Sellers to lease any real property which
is the subject of the Objections. Buyer's failure to notify Sellers and
Companies of Objections by the Objection Date shall constitute a waiver of
Buyer's right to terminate this Agreement because of the Objections or any
matters contained in the Studies, the Surveys, the Titles Commitments and
the Policies of Title Insurance or any other matter affecting the real
property owned or leased by the Companies.
(f) Expenses. Any and all expenses and other costs associated with
the Title Commitments, Surveys and Policies of Title Insurance referred to
in Sections 4.9(a), 4.9(b) and 4.9(c), respectively, and one-half of the
costs and expenses associated with the Phase I environmental assessments
referred to in Section 4.9(d) shall be the obligation of Buyer, and,
notwithstanding any provision to the contrary contained in Sections 4.9(a),
4.9(b), 4.9(c) and 4.9(d), neither Sellers nor the Companies will have any
obligation to proceed with ordering or processing any such items unless and
until Buyer shall have deposited with the Companies a sufficient amount of
funds to fully pay any and all such items requested by Buyer.
4.10 CONFIDENTIAL INFORMATION MEMORANDUM; REGISTRATION STATEMENT.
(a) Companies to Provide Information. Sellers and the Companies
shall cooperate with Buyer to promptly provide such information as
reasonably requested by Buyer to (i) prepare a confidential information
memorandum (the "Memorandum"), pursuant to Rule 506 of Regulation D
promulgated by the SEC under the Securities Act, for dissemination to
Buyer's acquisition candidates and their shareholders, and (ii) prepare and
file with the SEC the registration statement on Form S-1 (or other
appropriate Form) to be filed by Buyer under the Securities Act in
connection with its IPO (including the prospectus constituting a part
thereof, the "Registration Statement"). Buyer shall obtain all necessary
state securities law or "Blue Sky" permits and approvals required to carry
out the transactions contemplated by this Agreement, the Memorandum and the
Registration Statement.
(b) Accuracy of Information. Buyer represents and warrants that the
Memorandum or the Registration Statement, by exhibit or otherwise, will
not, at the time that such party has authorized dissemination of the
Memorandum, and at the time the Registration Statement and each amendment
and supplement thereto, if any, become effective under the Securities Act,
contain any untrue statement of a material fact or omit to
CSI Purchase and Sale Agreement/Page 22
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state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. Sellers and the Companies, respectively, shall
agree with Buyer as to the information and documents supplied by them for
inclusion in the Registration Statement and each shall indicate such
information and documents in a letter (the "Information Letter") to be
jointly prepared by Buyer, the Sellers and the Companies and delivered (i)
within fifteen days after the filing of the Registration Statement with the
SEC and (ii) prior to filing any amendment to the Registration Statement
with the SEC (other than any prospectus filed with the SEC pursuant to Rule
424(b)).
(c) Further Information. Sellers and the Companies, respectively,
shall promptly upon request, furnish Buyer with all information concerning
itself and such other matters as may be reasonably requested by Buyer in
connection with the preparation of the Memorandum, the Registration
Statement and each amendment or supplement thereto, or any other statement,
filing, notice or application made by or on behalf of each such party to
any governmental entity in connection with the transactions contemplated by
this Agreement.
(d) Indemnification. Buyer will indemnify and hold harmless Sellers,
each of the Companies, and each of their respective directors, officers and
other persons, if any, who control any of the Companies within the meaning
of the Securities Act from and against any losses, claims, damages,
liabilities or judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or any state securities or
blue sky laws or otherwise, insofar as such losses, claims, damages,
liabilities, or judgments (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Memorandum or Registration Statement, or in
any amendment or supplement thereto, or in any state application for
qualification, permit, exemption or registration as a broker/dealer, or in
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such person for any legal expenses
reasonably incurred by such person in connection with investigating or
defending any such action or claim; provided, however, that Buyer shall not
be liable, in any such case, to the extent that any such loss, claim,
damage, liability, or judgment (or action in respect thereof) arises out of
or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in the Memorandum or Registration
Statement, or any such amendment or supplement thereto, or in any such
state application, or in any amendment or supplement thereto, in reliance
upon and in conformity with information furnished in writing to Buyer by or
on behalf of the Companies or the Sellers for use therein.
4.11 CERTAIN TAX MATTERS.
(a) Tax Periods Ending on or Before the Closing Date. Buyer shall
prepare or cause to be prepared and file or cause to be filed all returns,
declarations, reports, claims for refund, or information returns or
statements relating to Taxes, including any schedule,
CSI Purchase and Sale Agreement/Page 23
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attachment, or amendment thereto ("Tax Returns") for each Company and each
of the Company Subsidiaries for all periods ending on or prior to the
Closing Date which are filed after the Closing Date. Buyer shall permit
Sellers to review and comment on each such Tax Return described in the
preceding sentence prior to filing and shall make such revisions to such
Tax Returns as are reasonably requested by Sellers.
(b) Cooperation on Tax Matters.
(i) Buyer, Company (and its Company Subsidiaries) and Sellers
shall cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns pursuant to this
Section and any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon the other
party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
Company (and its Subsidiaries) and Sellers agree: (A) to retain all books
and records with respect to Tax matters pertinent to Company (and its
Subsidiaries) relating to any taxable period beginning before the Closing
Date until the expiration of the statute of limitations (and, to the extent
notified by Buyer or Sellers, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered
into with any taxing authority; and (B) to give the other party reasonable
written notice prior to transferring, destroying or discarding any such
books and records and, if the other party so requests, Company (and its
Subsidiaries) or Sellers, as the case may be, shall allow the other party
to take possession of such books and records.
(ii) Buyer and Sellers further agree, upon request, to use their
best efforts to obtain any certificate or other document from any
governmental authority or any other person as may be necessary to mitigate,
reduce or eliminate any Taxes that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
(c) Tax Sharing Agreements. All tax sharing agreements or similar
agreements with respect to or involving each Company (and each of the
Company Subsidiaries) shall be terminated as of the Closing Date and,
after the Closing Date, none of the Companies (nor any of the Company
Subsidiaries) shall be bound thereby or have any liability thereunder.
4.12 Satisfaction of Conditions.
(a) The Companies and the Sellers, respectively, shall (i) use their
reasonable efforts to obtain, as soon as possible, all governmental approvals
required to be obtained by the Companies and make, as soon as possible, all
filings with any governmental authority required on the part of the Companies
to consummate the transactions contemplated hereby, (ii) use their reasonable
efforts to obtain, as soon as possible, all other consents to and approvals
required to be obtained by the Companies to consummate the transactions
contemplated hereby, and (iii) otherwise use their
CSI Purchase and Sale Agreement/Page 24
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reasonable efforts to satisfy the conditions set forth in Article 5 of the
Agreement to the extent that such satisfaction is within their control;
provided, however, that this Section 4.12 shall not be construed to limit the
rights of Sellers to terminate this Agreement as provided in Article 6 of the
Agreement.
(b) The Buyer shall (i) use its reasonable efforts to obtain, as soon
as possible, all governmental approvals required to be obtained by the Buyer
and make, as soon as possible, all filings with any governmental authority
required on the part of the Buyer to consummate the transactions contemplated
hereby, (ii) use its best reasonable efforts to obtain, as soon as possible,
all other consents to and approvals required to be obtained by the Buyer to
consummate the transactions contemplated hereby, and (iii) otherwise use its
reasonable efforts to satisfy the conditions set forth in Article 5 of the
Agreement to the extent that such satisfaction is within its control; provided,
however, that this Section 4.12 shall not be construed to limit the rights of
Buyer to terminate this Agreement as provided in Article 6 of this Agreement.
4.13 Buyer's IPO. Buyer shall use its best efforts to cause the
Registration Statement to become effective, and to complete its IPO, as soon as
practicable. To the extent permitted by applicable law, Buyer shall keep the
Companies informed regarding the status of Buyer's IPO.
4.14 Financing. Buyer shall use its best efforts to obtain a commitment
from a lender for approximately $25,000,000 in senior indebtedness. Buyer
shall keep the Companies informed regarding Buyer's efforts to obtain such
financing.
4.15 Indemnification of Directors and Officers of the Companies.
(a) From and after the Closing Date, Buyer agrees to indemnify, defend
and hold harmless the former directors and officers of each of the Companies
(an "Indemnified Person") from and against all losses, claims, damages,
liabilities and judgments (and related expenses including, but not limited to,
attorney's fees and amounts paid in settlement), and any action or other
proceeding in respect thereof, to which any Indemnified Person becomes subject,
based upon or arising out of actions or omissions or alleged actions or
omissions of such persons occurring (or alleged to have occurred) at or prior
to the Closing Date, to the fullest extent permitted under the Delaware
General Corporation Law or the Louisiana Business Corporation Law, as
applicable, or the certificate of incorporation, bylaws or other governing
documents of such Company as in effect on the date of this Agreement, whichever
is greater.
(b) From and after the Closing Date, Buyer shall not amend, alter or
repeal those provisions of the certificate of incorporation, bylaws or other
governing documents of any of the Companies relating to liability or
indemnification of directors and officers, except as required by law, if the
effect of such amendment, alteration or repeal would be to increase the
potential liability of a director or officer of a Company to such Company or to
its stockholders for monetary damages for breach of fiduciary duty, or to
lessen or otherwise adversely affect the indemnification rights of directors
and officers of such Company as provided in such certificate of incorporation,
bylaws or other governing documents as in effect on the date of this Agreement.
CSI Purchase and Sale Agreement/Page 25
32
(c) The rights granted to the Indemnified Persons hereby shall be
contractual rights inuring to the benefit of all Indemnified Persons and shall
survive this Agreement and the Closing.
4.16 Availability of Rule 144. With a view to making available to Sellers
the benefit of Rule 144 promulgated under the Securities Act, or any successor
or other rule or regulation of the SEC which may at any time permit Sellers to
resell shares of TMS Common Stock to the public exempt from registration, Buyer
agrees (i) if TMS Common Stock has been registered under Section 12 of the
Exchange Act, and such registration is not then withdrawn or suspended, or TMS
Common Stock has been registered under the Securities Act and Buyer is subject
to the periodic reporting requirements of the Exchange Act pursuant to Section
15(d) thereof, to use its best efforts to file with the SEC in a timely manner
all reports and other documents required to be filed by an issuer of securities
registered under the Exchange Act, so as to maintain the availability of Rule
144 to Sellers; (ii) at its sole expense, upon any Seller's request, to deliver
to such Seller a certificate, signed by one of Buyer's principal officers,
stating (A) the number of shares of TMS Common Stock outstanding as shown by
the most recent report or statement published by Buyer, (B) whether Buyer has
filed the reports required to be filed under the Exchange Act for a period of
at least ninety (90) days prior to the date of such certificate and in addition
has filed the most recent annual report required to be filed thereunder, and
(C) such other or additional information as shall be reasonably necessary to
make available to such Seller the ability to offer and sell the maximum number
of shares under Rule 144; and (iii) when Rule 144 is being complied with or the
holding period applicable to any Seller under Rule 144 shall have expired, to
reissue promptly upon such Seller's request certificates evidencing shares of
TMS Common Stock held by such Seller not bearing any legend restricting
transfer of such securities (to the extent then permitted by rules, or
interpretations of the staff, of the SEC).
ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions Precedent to the Obligations of the Buyer. The obligations
of the Buyer under this Agreement are subject to the satisfaction in all
material respects of each of the following conditions, unless waived by the
Buyer:
(a) Accuracy of Representations and Warranties. Except for such
changes as are permitted pursuant to Section 4.3 of this Agreement, the
representations and warranties of Sellers and the Companies contained in
this Agreement, in Disclosure Schedules of this Agreement by each of the
Companies or in any closing certificate or document delivered to Buyer
pursuant hereto shall be correct and complete in all material respects at
and as of the Closing Date and the Escrow Closing Date as though made at
and as of such dates, other than such representations and warranties as are
specifically made as of another date, and Sellers and the Companies shall
each have delivered to Buyer a certificate to that effect.
(b) Performance of Covenants. Sellers and the Companies shall each
have performed and complied with all covenants of this Agreement to be
performed or complied with by them at or prior to the Closing Date and the
Escrow Closing Date (except where
CSI Purchase and Sale Agreement/Page 26
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the failure to so perform or comply would not have a material adverse
effect on Buyer or prevent the Companies, Sellers or Buyer from
consummating the transactions contemplated hereby), and Sellers and the
Companies shall each have delivered to Buyer a certificate to that effect.
(c) Legal Actions or Proceedings. No legal action or proceeding
shall have been instituted after the date hereof against Sellers or any of
the Companies, or against Buyer arising by reason of the acquisition of the
Companies pursuant to this Agreement, which is reasonably likely (1) to
restrain, prohibit or invalidate the consummation of the transactions
contemplated by this Agreement, (2) to have a material adverse effect on
the Companies or (3) to have a material adverse effect on the results of
operations or financial condition of Buyer and its subsidiaries, taken as a
whole, after giving effect to the consummation of the transactions
contemplated by this Agreement; and Sellers and the Companies shall each
have delivered to Buyer a certificate to their knowledge to that effect.
(d) Approvals. The Companies and Sellers shall have procured all of
the consents, approvals and waivers specified in Section 3.1(b) of this
Agreement, Sections 3.2(e) of Exhibit 3.2, Section 3.3(e) of Exhibit 3.3,
and Section 3.4(e) of Exhibit 3.4, and Sellers and the Companies shall each
have delivered to Buyer a certificate, to their knowledge, to that effect.
(e) CSI Reorganization. Sellers and the Companies shall have
consummated the CSI Reorganization to the reasonable satisfaction of Buyer,
and the Sellers shall provide Buyer with such documents or information as
Buyer may reasonably request to evidence the consummation of the CSI
Reorganization.
(f) Policies of Title Insurance. If Title Insurance Policies have
been requested by Buyer pursuant to Section 4.9(c) hereof, and it has
complied with the requirements of Section 4.9(f) hereof, Sellers shall
deliver Policies of Title Insurance insuring the ownership or leasehold
interest of the Companies in the Title Insurance Property.
(g) Executive Employment Agreements. The individuals designated in
Schedule 1.4 hereto shall each execute and deliver an Executive Employment
Agreement in substantially the form attached as Exhibit 1.4 hereto.
(h) Shareholder Lock-up Agreements. Sellers each shall have executed
and delivered any lock-up agreement reasonably requested by the managing
underwriter of Buyer's IPO which restricts the sale or other disposition of
TMS Common Stock (to the extent any such shares are being delivered
pursuant to this Agreement) for a reasonable and customary period (no
longer than 365 days) following the effectiveness of the Registration
Statement.
(i) Completion of Buyer's IPO. Buyer's initial public offering of
TMS Common Stock, as described in the Registration Statement, shall have
closed.
CSI Purchase and Sale Agreement/Page 27
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(j) Lender Approval. Buyer shall have secured a commitment for
approximately $25,000,000 in senior indebtedness.
(k) Opinion of Counsel for the Companies and Sellers. Buyer shall
have received the opinion of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ dated the Closing Date,
substantially in the form and to the effect set forth in Exhibit 5.1
hereto.
(l) Resignations of Directors and Officers. Sellers will deliver to
Buyer (i) the resignations, effective as of the Closing Date, of all the
Sellers who are officers and directors of the Company; (ii) a complete and
general release of all claims by the Sellers against the Companies except
as otherwise provided in Sections 4.8 and 4.15 hereof; (iii) on or before
the Closing Date evidence of the resignation from or final removal from
office, effective on the Closing Date, of all officers and directors of the
Companies; and (iv) to the extent then available, the corporate records and
books of each of the Companies, including the minute books, the stock
transfer books, and the corporate seal of each Company.
(m) All Proceedings to be Satisfactory. All actions to be taken by
Sellers and the Companies in connection with the consummation of the
transactions contemplated in Article 1 hereof and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in form
and substance to Buyer and its counsel.
5.2 Conditions Precedent to the Obligations of Sellers and the Companies.
The obligations of Sellers and the Companies under this Agreement are subject
to the satisfaction in all material respects or waiver by Sellers prior to or
on the Closing Date of each of the following conditions:
(a) Accuracy of Representations and Warranties. Except for such
changes as are permitted pursuant to Section 4.3 of this Agreement, the
representations and warranties of Buyer contained in this Agreement or in
any closing certificate or document delivered to Sellers or the Companies
pursuant hereto shall be correct and complete in all material respects on
and as of the Closing Date and the Escrow Closing Date as though made at
and as of such dates other than such representations and warranties as are
specifically made as of another date, and Buyer shall have delivered to
Sellers and each of the Companies a certificate to that effect.
(b) Performance of Covenants. Buyer shall have performed and
complied with all covenants of this Agreement to be performed or complied
with by it at the Closing Date and the Escrow Closing Date (except where
the failure to so perform or comply would not have a material adverse
effect on Sellers or the Companies or prevent any of the Companies, Sellers
or Buyer from consummating the transactions contemplated hereby), and Buyer
shall have delivered to Sellers and the Companies a certificate to such
effect.
CSI Purchase and Sale Agreement/Page 28
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(c) Approvals. Buyer shall have procured all of the consents,
approvals and waivers specified in Section 3.5(f), and Buyer shall deliver
to Sellers and the Companies a certificate to that effect.
(d) Release from Guarantees. Buyer shall have caused the release of
Sellers from any and all personal guarantees of each Company's
indebtedness and performance bonds in accordance with Section 4.7 above
effective as of the Closing Date.
(e) Executive Employment Agreements. CSI or such other appropriate
Company shall execute and deliver an Executive Employment Agreement with
the individuals listed in Schedule 1.4 hereto and each such Executive
Employment Agreement shall be in substantially the form attached as Exhibit
1.4.
(f) Registration Rights Agreements. Buyer shall have executed and
delivered a Registration Rights Agreement, substantially in the form of
Exhibit 1.5, to the Sellers receiving TMS Common Stock pursuant to this
Agreement.
(g) Lender Approval; Performance Bonds. Sellers and Buyer shall have
obtained the consent of each Company's lenders with respect to the
assumption or prepayment of approximately $5,500,000 of indebtedness by
Buyer, and the release of Sellers and their respective affiliates, heirs,
successors and assigns with respect to such indebtedness and with respect
to each Company's performance bonds effective as of the Closing Date.
(h) Receipt of Memorandum. Sellers and their counsel shall have
received the Memorandum describing Buyer and the TMS Common Stock, if any,
to be delivered as a part of the Purchase Price together with all such
counterpart originals or certified or other copies of all documents
relating to Buyer or incident to the transactions contemplated hereby as
Sellers or such counsel may reasonably request.
(i) Opinion of Counsel for the Buyer. Sellers and the Companies
shall have received the opinion of Chamberlain, Hrdlicka, White, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, counsel for Buyer, dated the Closing Date, substantially in the
form and to the effect set forth in Exhibit 5.2 hereto.
(j) Legal Actions or Proceedings. No legal action or proceeding
shall have been instituted that is reasonably likely to restrain, prohibit,
violate or otherwise affect the consummation of the transactions
contemplated hereby.
(k) All Proceedings to be Satisfactory. All actions to be taken by
Buyer in connection with the consummation of the transactions contemplated
in Article 1 hereof and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby shall be
reasonably satisfactory in form and substance to Sellers and their counsel.
CSI Purchase and Sale Agreement/Page 29
36
ARTICLE 6
TERMINATION
6.1 Termination of Agreement. The Parties may terminate this Agreement as
provided below:
(a) Mutual Consent. The Buyer and the Sellers may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(b) Termination by Buyer. The Buyer may terminate this Agreement by
giving written notice to the Sellers at any time prior to the Closing (1)
in the event any of the Sellers has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect,
the Buyer has notified the Sellers of the breach, and the breach has
continued without cure until the earlier of 20 days after the notice of
such breach or the Closing Date, whichever is earlier, or (2) if the
Closing Date shall not have occurred on or before the earlier of 75 days
after receipt by Buyer of comments from the SEC with respect to Buyer's
initial filing of its Registration Statement or December 31, 1997, by
reason of the failure of any condition precedent under Section 5.1 hereof
(unless the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(c) Termination by Sellers. Sellers may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing (1) in
the event the Buyer has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, any of the
Sellers has notified the Buyer of the breach, and the breach has continued
without cure until the earlier of 20 days after the notice of such breach
or the Closing Date, whichever is earlier, or (2) if the Closing Date
shall not have occurred on or before the earlier of 75 days after receipt
by Buyer of comments from the SEC with respect to Buyer's Registration
Statement or December 31, 1997, by reason of the failure of any condition
precedent under Section 5.2 hereof (unless the failure results primarily
from any of the Sellers themselves breaching any representation, warranty,
or covenant contained in this Agreement). Buyer shall promptly provide
written notice to Sellers and the Companies at such time as Buyer has
reason to know that it cannot purchase the CSI Shares in accordance with
the terms of this Agreement, including, without limitation, the inability
of Buyer to complete an IPO or obtain financing for the contemplated
transactions by the earlier of 75 days after receipt by Buyer of comments
from the SEC with respect to Buyer's Registration Statement or December 31,
1997.
(d) After the Escrow Closing Date. This Agreement shall terminate
after the Escrow Closing only as follows:
CSI Purchase and Sale Agreement/Page 30
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(1) Termination of Underwriting Agreement. If, prior to the
successful completion of the IPO, there shall occur a
termination of the agreement between Buyer and certain investment
banking firms (the "Underwriting Agreement") under which such
firms agree to purchase shares of TMS Common Stock from Buyer on
a firm commitment basis for resale to the public initially at the
IPO Price, this Agreement shall terminate automatically and
without action on the part of any party;
(2) Automatic Termination. This Agreement shall terminate
automatically and without action on the part of any party hereto
if both the Buyer's IPO and the Closing shall not have been
consummated within four (4) business days after the Escrow
Closing; or
(3) Section 4.3. If this Agreement is terminated pursuant to
Section 4.3.
6.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 6.1, this Agreement shall forthwith become void and
there shall be no liability on the part of any party hereto, except that (1)
Section 4.4, Section 10.1, Section 10.6, Section 10.7, Section 10.8 and Section
10.10 hereof shall survive such termination and (2) nothing herein shall
relieve any party from liability for any willful breach of any other provision
hereof.
ARTICLE 7
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1 Survival of Representations and Warranties. Except as provided
hereafter, the respective representations and warranties of the parties
contained in this Agreement (except for Sections 3.2(m), (o) and (u) of Exhibit
3.2, Sections 3.3(m), (o) and (u) of Exhibit 3.3 and Sections 3.4(m), (o) and
(u) of Exhibit 3.4) shall survive the Closing Date and shall expire and
terminate on the last day of the 18th month after the Closing Date. The
representations and warranties contained in Section 3.2(u) of Exhibit 3.2,
Section 3.3(u) of Exhibit 3.3 and Section 3.4(u) of Exhibit 3.4 hereof shall
not terminate until the expiration of the applicable statute of limitations
(including any extension thereof) for any claim by a taxing authority for any
taxes, penalties or interest. With respect to Section 3.2(m) of Exhibit 3.2,
Section 3.3(m) of Exhibit 3.3 and Section 3.4(m) of Exhibit 3.4, no
representation or warranty that any property is in good condition or repair or
otherwise fit for the purposes for which the property is intended shall survive
the Closing Date. The representations and warranties contained in Section
3.2(o) of Exhibit 3.2, Section 3.3(o) of Exhibit 3.3 and Section 3.4(o) of
Exhibit 3.4 shall not survive the Closing Date.
7.2 Indemnification by Sellers. Sellers hereby agree to indemnify and
hold harmless the Companies and Buyer in respect of any losses, claims,
damages, liabilities or related expenses
CSI Purchase and Sale Agreement/Page 31
38
(including, but not limited to, reasonable attorney's fees and expenses, which
the Companies or the Buyer incurs in excess of $500,000 in the aggregate as a
result of the breach of any of the representations, warranties and covenants
made by Sellers in or pursuant to this Agreement; provided that Sellers'
indemnification obligations under this Agreement shall not exceed $5,000,000
(the "Indemnification Cap"). The indemnification obligations of Sellers under
this Section 7.2 shall survive the Closing and will terminate at the time
specified in Section 7.1, except with respect to any indemnity claim or claims
pending on the date of such termination.
7.3 Indemnification by Buyer. Buyer agrees to indemnify and hold harmless
Sellers in respect of any losses, claims, damages, liabilities or related
expenses (including, but not limited to, reasonable attorney's fees and
expenses) which Sellers incur in excess of $500,000 in the aggregate as a
result of the breach of any of the representations, warranties and covenants
made by Buyer in or pursuant to this Agreement; provided that Buyer's
indemnification obligations under this Agreement shall not exceed the
Indemnification Cap. The indemnification obligations of Buyer under this
Section 7.3 shall survive the Closing and will terminate at the time specified
in Section 7.1, except with respect to any indemnity claim or claims pending on
the date of such termination.
7.4 Indemnification Procedure.
(a) Promptly after any party hereto (the "Indemnified Party") has received
notice or has knowledge of the occurrence of any event which the Indemnified
Party asserts is an indemnifiable event or after the commencement of any
action, claim or proceeding commenced against the Indemnified Party by a third
party that might result in any claim for indemnity pursuant to this Agreement
(a "Third Party Claim"), the Indemnified Party shall, subject to the
Indemnification Cap, provide the party obligated to provide indemnification
hereunder (the "Indemnifying Party") written notice (the "Indemnification
Notice") of such claim, which notice shall identify the nature of such event,
claim, action or proceeding and the basis for the indemnification claim. If an
Indemnified Party shall fail to give prompt notice hereunder, and the
Indemnifying Party shall have been prejudiced in any material respect by such
failure so to notify the Indemnifying Party, the Indemnifying Party shall have
the right, but not the obligation, to set-off against any amounts payable or
that become payable by the Indemnifying Party under this Agreement the amount
by which the Indemnifying Party has been damaged as a result of the failure so
to notify the Indemnifying Party. The Indemnifying Party shall, within ten
business days of receipt of an Indemnification Notice, either: (i) acknowledge
the debt, liability or obligation for which indemnity is sought as a valid
claim and, subject to the Indemnification Cap, (x) forthwith pay the
Indemnified Party an amount sufficient to discharge such debt, liability or
obligation, or (y) assume the defense of, or permit the Indemnified Party to
defend, such Third Party Claim in accordance with Section 7.4(b) below; (ii) in
the event of a Third Party Claim which is not acknowledged by the Indemnifying
Party to be owing or with respect to which the Indemnifying Party disputes that
indemnification is owed to the Indemnified Party, notify the Indemnified Party
of its position with respect to such claim; or (iii) with respect to a claim
other than a Third Party Claim, in the event of a claim by the Indemnified
Party for indemnity hereunder which is challenged by the Indemnifying Party,
notify the Indemnified Party of such challenge.
CSI Purchase and Sale Agreement/Page 32
39
(b) At any time after the Indemnified Party gives notice to the
Indemnifying Party of a Third Party Claim being made against the Indemnified
Party for which a demand for indemnity is being asserted, to the extent that
such Third Party Claim is not being defended by any third party under the terms
of any applicable insurance policy or policies, the Indemnified Party shall
permit the Indemnifying Party, at the option and expense of the Indemnifying
Party, to assume the complete defense of such Third Party Claim with full
authority to conduct such defense and to settle or otherwise dispose of the
same (except as hereinafter provided). In order to assume such defense, the
Indemnifying Party must notify the Indemnified Party in writing of its election
to do so within ten (10) days following receipt of notice of the Third Party
Claim from the Indemnified Party; in the event that the Indemnifying Party does
not so notify the Indemnified Party within such ten (10) day period, the
Indemnifying Party shall be deemed to have elected not to assume such defense.
The Indemnifying Party will not, in defense of any such Third Party Claim,
except with the consent of the Indemnified Party, consent to the entry of any
judgment or enter into any settlement that does not include, as an
unconditional term thereof, the release by claimant or plaintiff of the
Indemnified Party from all claims and/or liability in respect thereof. After
notice to the Indemnified Party of the Indemnifying Party's election to assume
the defense of such Third Party Claim as provided above, the Indemnifying Party
shall be liable to the Indemnified Party for such legal or other expenses
subsequently incurred at the request of the Indemnifying Party by the
Indemnified Party in connection with the defense thereof. As to those Third
Party Claims with respect to which the Indemnifying Party does not elect to
assume control of the defense, (i) the Indemnified Party will afford the
Indemnifying Party an opportunity to participate in such defense, at the
Indemnifying Party's own cost and expense; and (ii) the Indemnified Party will
not settle or otherwise dispose of any such Third Party Claim without the
consent of the Indemnifying Party, which consent will not be unreasonably
withheld.
(c) Notwithstanding anything to the contrary contained herein, any amounts
owing from an Indemnifying Party to an Indemnified Party under the provisions
of this Agreement shall be reduced to the extent to which the Indemnified Party
or any other claimant actually receives any proceeds of any insurance policy
that are paid with respect to the event, action, claim, or proceeding that gave
rise to such indemnification.
(d) Notwithstanding the provisions of Section 7.2 and 7.3 hereof, the
Indemnifying Party shall not be liable for indemnification pursuant thereto to
the extent that any loss, claim, damage, liability or expense is found by a
court or arbitration panel of competent jurisdiction, after full hearing on the
merits, to have resulted from the dishonest, fraudulent, grossly negligent, bad
faith or criminal act or omission of the Indemnified Party or its officers,
directors, employees, agents or affiliates.
(e) Regardless of whether the defense of any Third Party Claim is being
undertaken by the Indemnified Party and the Indemnifying Party jointly or by
either of them alone as provided in Section 7.4(b) above, the Indemnified Party
and the Indemnifying Party each agree with the other to aid in the conduct of
such defense to any reasonable extent, including furnishing each other with
records or documents related to the Third Party Claim, permitting employees
connected with the Third Party Claim to testify at depositions or in court, and
complying with any other reasonable request made by the other party in the
furtherance of the defense of the Third Party Claim.
CSI Purchase and Sale Agreement/Page 33
40
(f) The indemnification obligations of Sellers and Buyer under this
Article 7 shall constitute the sole and exclusive remedy of Buyer and Sellers,
respectively, for the recovery of money damages with respect to the matters
described in Sections 7.2 and 7.3, respectively.
(g) Failure to respond within the appropriate time period following the
receipt of an Indemnification Notice hereunder shall be deemed acknowledgment
of the right to be indemnified and give rise to the immediate right in the
Indemnified Party to payment in full of the amount claimed, except in each case
as any such claim shall be limited by the Indemnification Cap.
ARTICLE 8
STOCK TRANSFER RESTRICTIONS
8.1 Compliance with Securities Laws. Sellers acknowledge and agree with
Buyer that the shares of TMS Common Stock issued pursuant to this Agreement
(the "Restricted Shares") to Sellers shall not be transferable except upon the
conditions specified in this Article 8, which conditions are intended, among
other things, to ensure compliance with the provisions of the Securities Act
and any applicable state securities laws in respect of the transfer of such
Restricted Shares. Sellers acknowledge and agree that the certificates
representing the Restricted Shares will contain a restrictive legend to the
effect that transfer of such shares is prohibited unless the shares are
registered under the Securities Act and applicable state securities laws, or in
the event that such transfer is, in the opinion of counsel to Buyer, exempt
from the registration provisions of the Securities Act and applicable state
securities laws.
8.2 Restrictions on Transfer.
(a) Each Seller understands and agrees that none of the Restricted
Shares may be transferred by such Seller unless (i) (A) such disposition is
pursuant to an effective registration statement under the Securities Act, (B)
the Seller shall have delivered to Buyer an opinion of counsel, which opinion
and counsel shall be reasonably satisfactory, to the effect that such
disposition is exempt from the provisions of Section 5 of the Securities Act,
or (C) a no-action letter from the SEC, reasonably satisfactory to counsel for
the Company, shall have been obtained with respect to such disposition, and
(ii) such disposition is pursuant to registration or qualification under any
applicable state securities laws or an exemption therefrom.
(b) Each Seller understands and agrees that except as provided in the
Registration Rights Agreement, Buyer is not obligated to furnish a registration
statement under the Act or any state securities laws covering the Restricted
Shares nor is Buyer under any obligation to aid Sellers in obtaining any
exemption from any such registration requirements. Each Seller also
acknowledges that except as provided in the Registration Rights Agreement, he
shall be responsible for compliance with all conditions of transfer of the
Restricted Shares imposed by any administrator of any state.
CSI Purchase and Sale Agreement/Page 34
41
(c) Each Seller understands and agrees that transfer of the
Restricted Shares may be effected only on the books of Buyer, and that stop
transfer instructions will be issued to the transfer agent of TMS Common Stock
in accordance with the legend on any certificate representing the Restricted
Shares. The transfer agent will not remove the legend from any certificate
representing the Restricted Shares without either registration of the
Restricted Shares under the Securities Act and applicable state securities laws
or an opinion of counsel reasonably acceptable to Buyer stating that the
transfer of the Restricted Shares is exempt from such registration requirements
and authorizing removal of the stop transfer instructions.
ARTICLE 9
FURTHER ASSURANCES
9.1 Further Assurances. At any time and from time to time on and after
the Closing Date (a) at the request of Buyer, Sellers shall deliver to Buyer
any records, documents and data possessed by Sellers and not previously
delivered to Buyer to which Buyer is entitled and execute and deliver or cause
to be executed and delivered all such deeds, assignments, consents, documents
and further instruments of transfer and conveyance, and take or cause to be
taken all such other actions, (provided that such actions shall be without cost
or expense to Sellers) as Buyer may reasonably deem necessary or desirable in
order to fully and effectively vest in Buyer, or to confirm its title to and
possession of, the CSI Shares or to assist Buyer in exercising rights with
respect thereto which Buyer is entitled to exercise pursuant to the terms of
this Agreement; and (b) at the request of Sellers, Buyer shall execute and
deliver or cause to be executed and delivered such further instruments and take
or cause to be taken such further actions (provided that such actions shall not
be without cost or expense to Buyer) as Sellers may reasonably deem necessary
or desirable to carry out the terms and provisions of this Agreement.
9.2 Books and Records.
(a) Buyer agrees that it shall preserve and keep all books and
records relating to the Companies in Buyer's possession until six months
following the expiration of the statute of limitations (including
extensions thereof) applicable to the tax returns filed by or with respect
to the Companies for taxable periods ending prior to or on the Closing Date
to which such books or records are relevant. After such time, before Buyer
shall dispose of any of such books and records, at least 90 calendar days'
prior written notice to such effect shall be given by Buyer to Sellers, and
Sellers shall be given an opportunity, at their sole cost and expense, to
remove all or any part of such books and records as Sellers may select.
Duly authorized representatives of Sellers shall, upon reasonable notice,
have access to such books and records during normal business hours to
examine, inspect and copy such books and records.
(b) In any instance in which any Seller or Buyer, as the case may be,
is required to prepare or file (or cause to be filed) tax returns which
cover a period that includes the Closing Date or to respond to an audit by
the Internal Revenue Service or other governmental
CSI Purchase and Sale Agreement/Page 35
42
agency with respect to a period prior to the Closing Date, each Seller or
Buyer, as the case may be, will furnish all information and records
reasonably available to it and reasonably requested of him, her or it and
necessary or appropriate for use in preparing such returns or responding to
such audit.
ARTICLE 10
MISCELLANEOUS
10.1 Expenses, etc. Whether or not the transactions contemplated by this
Agreement are consummated, none of the parties hereto shall have any obligation
to pay any of the fees and expenses of the other parties incident to the
negotiation, preparation and execution of this Agreement, including the fees
and expenses of counsel, accountants and other experts. Each of the Sellers,
the Companies and Buyer will indemnify the other parties, and hold them
harmless from and against any claims for finders' fees or brokerage commissions
in relation to or in connection with such transactions as a result of any
agreement or understanding between such indemnifying party and any third party.
Sellers shall pay and be responsible for any stock transfer Taxes arising from
the sale of CSI Shares and the Investments Interests hereunder. Buyers shall
pay and be responsible for any stock transfer taxes arising from the sale of
shares of TMS Common Stock hereunder.
10.2 Execution in Counterparts. For the convenience of the parties, this
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
10.3 Notices. All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and delivered or mailed by registered or certified
mail postage prepaid, or sent by telex, telecopier, facsimile transmission or
telegraph as follows:
If to Sellers or any Company: With a copy to:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. If to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or any Company:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
2205 West Pinhook ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Professional
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Limited Liability Company
Facsimile: (318) 237-2281 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or any
Company:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Gelpi, Sullivan, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
CSI Purchase and Sale Agreement/Page 36
43
If to Buyer, to: With a copy to:
Transcoastal Marine Services, Inc. ▇▇▇▇▇ ▇. Spring, III
3535 Briarpark, Suite 210 Chamberlain, Hrdlicka, White, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇
Attention: Chief Executive Officer ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or addresses as any party hereto shall have designated by
notice in writing to the other parties hereto. Any notice or other
communication pursuant to this Agreement shall be deemed to have been duly
given or made and to have become effective upon the earliest of (a) when
delivered in hand to the party to which directed, or (b) if sent by first-class
mail postage prepaid, certified mail, return receipt requested, or by telex,
telecopier, facsimile transmission or telegraph and properly addressed as set
forth above, at the time when received by the addressee or (c) with respect to
delivery by certified mail, return receipt requested, when delivery thereof,
properly addressed as set forth above, is attempted by the U.S. Postal Service.
10.4 Waivers. Any party hereto (as to itself, but not as to other
parties without their consent) may, by written notice to the other parties
hereto, (a) extend the time for the performance of any of the obligations or
other actions of the other parties under this Agreement; (b) waive any
inaccuracies in the representations or warranties of another party contained in
this Agreement or in any document delivered pursuant to this Agreement; (c)
waive compliance with any of the conditions or covenants of another party
contained in this Agreement; or (d) waive performance of any of the obligations
of another party under this Agreement. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed a
waiver of any subsequent breach.
10.5 Amendments, Supplements, etc. At any time this Agreement may
be amended or supplemented by such additional agreements, articles or
certificates, as may be determined by the parties hereto to be necessary,
desirable or expedient to further the purposes of the Agreement, or to clarify
the intention of the parties hereto, or to add to or modify the covenants,
terms or conditions hereof or to effect or facilitate any governmental approval
or acceptance of this Agreement or to effect or facilitate the filing or
recording of this Agreement or the consummation of any of the transactions
contemplated hereby. Any such instrument must be in writing and signed by all
parties.
10.6 Entire Agreement. This Agreement, its Exhibits and Disclosure
Schedules and the documents executed on the Closing Date in connection
herewith, constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral and written, between the parties hereto with respect to
the subject matter hereof. No representation, warranty, promise, inducement or
statement of intention
CSI Purchase and Sale Agreement/Page 37
44
has been made by any party hereto which is not embodied in this Agreement or
such other documents, and no party hereto shall be bound by, or be liable for,
any alleged representation, warranty, promise, inducement or statement of
intention not embodied herein or therein.
10.7 Choice of Forum; Consent to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas. Any suit, action or proceeding arising with respect to the validity,
construction, enforcement or interpretation of this Agreement, and all issues
relating in any matter hereto, shall be brought in the United States District
Court for the Western District of Louisiana, or in the event that federal
jurisdiction does not pertain, in the state courts of the State of Louisiana in
Lafayette Parish. Each of the parties hereto hereby submits and consents to
the jurisdiction of such courts for the purpose of any such suit, action or
proceeding and hereby irrevocably waives (a) any objection which any of them
may now or hereafter have to the laying of venue in such courts, and (b) any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
10.8 Binding Effect, Benefits. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Notwithstanding anything contained in this Agreement
to the contrary, except with respect to Section 4.15 hereof, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
10.9 Assignability. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable by any party hereto without the prior
written consent of the other parties hereto.
10.10 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
rule or regulation, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof. The remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
10.11 Knowledge. As used in this Agreement and the Disclosure
Schedules, the phrase "to the knowledge" of the Company, CSI, ▇▇▇▇▇▇▇ or
Investments means to the actual knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or R. ▇▇▇▇ ▇▇▇▇▇▇, and the phrase "to the knowledge" of a
Seller means to the actual knowledge of such Seller.
CSI Purchase and Sale Agreement/Page 38
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the date first above written.
BUYER:
TRANSCOASTAL MARINE SERVICES, INC.
By: /s/ G. ▇▇▇▇▇ ▇▇▇▇
------------------------------------
G. ▇▇▇▇▇ ▇▇▇▇
Vice President
SELLERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE COMPANIES:
C.S.I. HYDROSTATIC TESTERS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Title: Chief Executive Officer
----------------------------------
▇▇▇▇▇▇▇ MOORING AND MARINE, INC.,
a Louisiana corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Title: Chief Executive Office
----------------------------------
▇▇▇▇▇▇▇ INVESTMENTS, L.L.C.,
a Louisiana limited liability company
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Title: Managing Member
----------------------------------
CSI Purchase and Sale Agreement/Page 39
