EXHIBIT 10.10
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (the "Agreement") is made and entered
into this 24 day of April, 1998 and is by and between CRC-XXXXX PIPELINE
INTERNATIONAL, INC., a Delaware corporation (the "Purchaser") and TULSA PIPELINE
EQUIPMENT & SUPPLY, INC., an Oklahoma corporation ("Tulsa Pipeline Equipment &
Supply"), XXXXXXXX HEAVY EQUIPMENT, INC., a Texas corporation ("Xxxxxxxx Heavy
Equipment"), and XXXXX XXXXXXXX, individually and doing business as HHC
INTERNATIONAL ("Xxxxxxxx"), (collectively, Tulsa Pipeline Equipment & Supply,
Xxxxxxxx Heavy Equipment, and Xxxxxxxx are sometimes hereinafter referred to as
the "Seller").
WHEREAS, the Seller is engaged primarily in the pipeline equipment
business (the "Business"); and
WHEREAS, the Purchaser desires to purchase and/or otherwise assume from
the Seller, and the Seller desires to sell and/or otherwise transfer to the
Purchaser, the Business and certain assets utilized in the conduct of the
Business and certain of the liabilities of the Business on and subject to the
terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, and intending to be legally bound hereby, the Purchaser
and the Seller hereby agree as follows:
1. PURCHASE AND SALE. On and subject to the terms and conditions of this
Agreement, (a) at the Closing, the Purchaser will purchase from the Seller, and
the Seller will sell, convey, transfer, assign and deliver to the Purchaser, or
cause to be sold, conveyed, transferred, assigned and delivered to the
Purchaser, all of the Acquired Assets, free and clear of any encumbrances other
than the Permitted Encumbrances; (b) at the Closing, the Purchaser will assume
and become directly and solely responsible for the payment, performance or
discharge, as the case may be, of all of the Assumed Liabilities; (c) at the
Closing, the Purchaser will pay to the Seller the Purchase Price with such
payment to be made as herein provided; and (d) at the Closing, the Purchaser
shall execute and deliver the Consulting Agreement described in ANNEX 1 attached
hereto between Xxxxxxxx and the Purchaser.
2. ACQUIRED ASSETS. For purposes hereof, "Acquired Assets" means all of
the properties, rights, interests and other assets, owned or otherwise held by
the Seller as described in SCHEDULE 2 attached hereto.
3. ASSUMED LIABILITIES. For purposes hereof, "Assumed Liabilities" means
the obligations and liabilities of the Seller as described in SCHEDULE 3
attached hereto. Notwithstanding
1
anything herein contained to the contrary, the only liabilities which the
Purchaser will assume are those described in SCHEDULE 3 attached hereto.
4. PURCHASE PRICE. The "Purchase Price" means, as of the Closing Date, the
sum of $5,747,689.00, subject to adjustments as hereinafter provided. At the
Closing, the Purchaser shall pay the Purchase Price as follows:
(a) Ninety percent of the Purchase Price after adjustments for
inventory valuation as described in Paragraph 5(a), less $400,000.00, by means
of a wire transfer of immediately available funds to an account designated by
the Seller.
(b) The sum of $400,000.00, be evidenced by the Purchaser's
promissory note in the form described in ANNEX 2 attached hereto (the
"Promissory Note"). (c) The remaining portion of the Purchase Price, after
determination of the adjustments to the Purchase Price described hereinafter in
Paragraph 5(b), shall be paid by the Purchaser no later than 45 days after the
Closing by means of a wire transfer of immediately available funds to an account
designated by the Seller.
5. ADJUSTMENTS TO THE PURCHASE PRICE.
(a) Within two days before the Closing, the parties will conduct an
inventory of the parts which comprise part of the Acquired Assets. An adjustment
will be made to the Purchase Price based on the difference in the inventory
value of such parts from the value shown in SCHEDULE 2.
(b) At the Closing, the Purchaser will take possession of the
Acquired Assets located in Broken Arrow, Oklahoma. However, with respect to the
Acquired Assets located in Xxxxxx County, Texas and Nisku, Alberta, Canada, the
final inventory value will be determined when such portion of the Acquired
Assets located in Xxxxxx County, Texas and Nisku, Alberta, Canada are loaded for
delivery to the Purchaser. Adjustments will be made to the Purchase Price based
on any changes to the Acquired Assets shown in SCHEDULE 2 as revised to show
inventory as being on-hand at the Closing. The basis for valuation of any
shortages or agreed additions shall be the value shown in SCHEDULE 2, or in the
case of agreed additions, 40 percent of the April 1, 1997 price list of the
Purchaser. In the case of newly manufactured equipment added after March 1,
1998, the value shall be the manufacturing cost. Any adjustments to the parts
inventory shall be made at book value. The Purchase Price shall be further
adjusted upon the failure of the Seller to deliver to the Purchaser within 45
days following the Closing any of the Acquired Assets which were not complete
and assembled to the Purchaser's reasonable satisfaction as of the Closing Date,
except as otherwise noted. If following all of the adjustments to the :Purchase
Price as herein provided, the adjustments total more than 10 percent of the
Purchase Price, the Seller shall immediately refund to the Purchaser the amount
in excess of such 10 percent by means of wire transfer of immediately available
funds to an account designated by the Purchaser.
6. COVENANT NOT TO COMPETE. It is recognized by the Seller that the
business of the Seller and the Purchaser and the affiliates of the Purchaser
that provide similar products and services is and will continue to be
international in scope and that geographical limitations on the
2
below described covenant not to compete and the non-solicitation covenant are
therefore not appropriate.
Consequently, a period of five years from the Closing Date, on a world-wide
basis, no party constituting the Seller shall:
(a) Canvas, solicit, or accept any business for any other person,
partnership, firm, corporation or other legal entity from any present or past
customer of the Seller or the Purchaser, in connection with any activity the
same as that engaged in by the Seller and the Purchaser on the date of this
Agreement.
(b) Give any other person, partnership, firm, corporation or other
legal entity the right to canvas, solicit or accept any business for any other
business, from any present or past customer of the Seller or the Purchaser, in
connection with any activity the same as that engaged in by the Seller and the
Purchaser on the date of this Agreement.
(c) Directly or indirectly request or advise any past, present or
future customer of the Purchaser to withdraw, curtail or cancel its business for
any other business, from any present or past customer of the Seller or the
Purchaser, in connection with any activity the same as that engaged in by the
Seller and the Purchaser on the date of this Agreement.
(d) Directly or indirectly disclose to any other person,
partnership, firm, corporation or other legal entity the names of past, present
or future customers of the Seller or the Purchaser, in connection with any
activity the same as that engaged in by the Seller and the Purchaser on the date
of this Agreement.
(e) Directly or indirectly induce, or attempt to influence any
employee of the Purchaser to terminate his employment.
(f) Without the written consent of the Purchaser, directly or
indirectly employ or attempt to employ any person, who, on the date of this
Agreement or at any time during the two years before the date of this Agreement,
is or was an employee of the Seller or the Purchaser, whether full or part-time.
(g) Directly or indirectly own, manage, operate, join or participate
in, or be connected as an officer, director, shareholder, employee, partner or
otherwise with any business under any name similar to Tulsa Pipeline Equipment &
Supply, Inc. or the Purchaser's name.
(h) Directly or indirectly compete with, or become interested in any
competitor of the Seller in any activity the same as that engaged in by the
Seller or the Purchaser on the date of this Agreement.
As used herein, the business of the Purchaser shall include, but not be
limited to the design, manufacturing, sale, rental of and providing of services
pertaining to specialized equipment for the construction, rehabilitation,
corrosion and weight coating, and automatic welding of pipelines.
The Seller acknowledges that the remedy at law for any breach by it of the
foregoing covenant not to compete will be inadequate, and that the Purchaser
shall be entitled, in addition to
3
any other legal remedy available to it, to an injunction after the posting of a
bond in the amount of $100.00, the issuance of which the Seller hereby consents,
restraining the Seller from any breach or threatened breach thereof. This
covenant on the part of the Seller shall be construed as an agreement
independent of any other provision of this Agreement and the existence of any
claim or cause of action by the Seller against the Purchaser, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Purchaser of this covenant.
Provided, however, notwithstanding anything herein contained to contrary,
Xxxxxxxx may buy, sell or rent Caterpillar tractors and other items of general
construction equipment, and may participate as a passive 50 percent owner of
Rocky Mountain Pipe Equipment, Inc. of Edmonton, Alberta, Canada ("Rocky
Mountain"). Xxxxxxxx shall not participate in the management of Rocky Mountain
or provide additional capital to Rocky Mountain or provide equipment for the use
or sale by Rocky Mountain. Any permitted activities pertaining to Rocky Mountain
shall be for business in Canada only. Moreover, Xxxxxxxx agrees to assist the
Company in its efforts to acquire the capital stock of Rocky Mountain.
7. CONFIDENTIALITY. The Seller shall act in good faith to maintain on a
confidential basis Confidential Information about the Purchaser obtained by the
Seller hereunder, but in no event shall the Seller be faulted in connection
therewith except for intentional or gross misconduct on the part of the Seller.
The Seller's confidentiality obligations of non-disclosure shall not apply to
the extent such information (a) was or becomes in the public domain through
disclosures by the Purchaser or others, (b) was in the Seller's possession
before the Purchaser's disclosure thereof to the Seller, (c) if legally acquired
by the Seller from a third party in the absence of a secrecy commitment, or (d)
to the extent that disclosure to governmental agencies is required by law, or
disclosure is required by a court order with proper jurisdiction, in which case
the Seller will use reasonable efforts to maintain confidentiality of
non-publicly known information involved therein.
As used herein, the term "Confidential Information" includes, without
limitation, information and knowledge pertaining to products, inventions,
innovations, designs, ideas, plans, trade secrets, proprietary information,
manufacturing, packaging, advertising, distribution and sales methods and
systems, sales and profit figures, customer and client lists, and relationships
between the Purchaser and its affiliates and dealers, distributors, customers,
clients, suppliers and others who have had or will have had business dealings
with the Purchaser and its affiliates.
8. THE SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller hereby
represents and warrants to the Purchaser as follows:
(a) ORGANIZATION AND EXISTENCE. Tulsa Pipeline Equipment & Supply
is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Oklahoma, and is
qualified to do business in the State of Texas. Likewise,
Xxxxxxxx Heavy Equipment is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Texas.
(b) POWER AND AUTHORITY. The Seller has full corporate power and
authority to execute, deliver, and perform this Agreement and
all other agreements, certificates or documents to be
delivered in connection herewith, including,
4
without limitation, the other agreements, certificates and
documents contemplated hereby (collectively the "Other
Agreements"). The Seller has full corporate power and
authority to own, lease and operate its assets, including, but
not limited to, the Acquired Assets, and to conduct its
businesses, including, but not limited to, the Business, as
same are currently being conducted.
(c) AUTHORIZATION. The execution, delivery and performance of this
Agreement and all of the Other Agreements by the Seller have
been duly authorized by all requisite shareholder and
corporate action.
(d) BINDING EFFECT. Upon execution and delivery by the Seller,
this Agreement and the Other Agreements will be and constitute
the valid, binding and legal obligations of the Seller,
enforceable against the Seller in accordance with the terms
hereof and thereof, except as the enforceability hereof or
thereof may be subject to the effect of (i) any applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally, and
(ii) general principles of equity (regardless of whether such
enforceability is considered a proceeding in equity or at
law).
(e) OWNERSHIP OF THE ACQUIRED ASSETS. The Seller is the record
owner of the Acquired Assets and is duly authorized and
empowered to and shall execute and deliver to the Purchaser at
the Closing bills of sale and such other forms of conveyance
which will convey good, absolute and indefeasible title to the
Acquired Assets being so sold to the Purchaser hereunder, free
and clear of all liens, encumbrances, charges, escrows,
equities, and other restrictions, except as may be otherwise
permitted hereunder.
(f) CONDITION OF THE ACQUIRED ASSETS. As of the Closing Date, the
Acquired Assets will be complete and assembled, except as
otherwise noted, to the Purchaser's reasonable satisfaction,
with no known significant defects, and suitable for their
intended use, reasonable wear and tear excepted. The Purchaser
acknowledges that, except as otherwise set forth in this
Agreement, the Seller has made no representations or
warranties of any kind, express or implied, with respect to
the physical condition, performance, merchantability or
fitness for a particular purpose of any of the Acquired
Assets, it being understood and agreed to by the Purchaser
that the same are being purchased "as is, where is."
Notwithstanding anything herein contained to the contrary, if
as of the Closing any of the Acquired Assets are not complete
or assembled, to the Purchaser's reasonable satisfaction, the
Seller shall have 45 days or other agreed period in which to
complete or assemble any of such Acquired Assets, with no
known significant defects, and suitable for their intended
use, reasonable wear and tear excepted. To the extent that the
Seller fails to so complete and assemble to the Purchaser's
reasonable satisfaction any of such Acquired Assets, except as
otherwise noted, the Purchase Price shall be further adjusted
by the value of any such Acquired Assets which the Seller has
failed to so complete and assemble
5
pursuant to the terms hereof. Any parts which are included
with the Acquired Assets which are new shall be valued at book
value. Any such parts included within the Acquired Assets
which are not new must be usable by Purchaser and shall be
valued as agreed upon by the parties.
(g) NO DEFAULT. Neither the execution and delivery of this
Agreement or the Other Agreements nor full performance by the
Seller of its obligations hereunder or thereunder will violate
or breach, or otherwise constitute or give rise to a default
under, the terms or provisions of the Articles of
Incorporation or Bylaws of Tulsa Pipeline Equipment & Supply
and Xxxxxxxx Heavy Equipment or, subject to obtaining any and
all necessary consents, of any contract, commitment or other
obligation included in the Acquired Assets or necessary for
the operation of the Business following the Closing or any
other material contract, commitment, or other obligation to
which the Seller is a party, or create or result in the
creation of any encumbrance on any of the Acquired Assets.
(h) NO CONSENTS. No consent, approval or authorization of, or
registration, declaration or filing with any third party,
including, but not limited to, any governmental departments
agency, commission or other instrumentality, will, except such
consents, if any, delivered or obtained on or prior to the
Closing, be obtained or made by the Seller prior to the
Closing to authorize the execution, delivery and performance
by the Seller of this Agreement.
(i) CORPORATE RECORDS. True and correct copies of the Articles of
Incorporation and Bylaws of Tulsa Pipeline Equipment & Supply
and Xxxxxxxx Heavy Equipment, and all amendments thereto, have
been delivered to the Purchaser for review, copies of which
are set forth on SCHEDULE 7(I) hereto.
(j) LITIGATION. Except as otherwise disclosed on SCHEDULE 7(J)
hereto, there presently exists no litigation, proceedings,
actions, claims or investigations pending in law or in equity,
nor, to the Seller's knowledge, are there any of the foregoing
which are threatened in writing, which would, in the
aggregate, have a material adverse effect on the Acquired
Assets or the Business.
(k) ACCESS TO RECORDS. The Seller shall cause the Seller to afford
the Purchaser access, during normal business, to all of its
business operations, properties, books, files, and records
related to the pipeline equipment business being acquired
hereunder, and will cooperate in the Purchaser's examination
thereof. No such examination, however, shall constitute a
waiver or relinquishment by the Purchaser of its right to rely
upon the Seller's covenants, representations, and warranties
made herein or pursuant hereto. Until the Closing hereunder or
the termination of this Agreement, whichever shall occur
first, and after the termination of this Agreement in the
event this Agreement does not close, the Purchaser will hold
in confidence all information so obtained by the Purchaser as
a result of such examination.
6
(l) CONTRACT RIGHTS. Each of he Contract Rights included within
the Acquired Assets was entered into in the ordinary course of
business.
(m) PAYMENT OF TAXES: TAX LIENS. All tax returns and all documents
whether federal, state or local, required to be filed by the
Seller with respect to the Seller and the Business have been
or will be filed on or before the date on which such tax
returns or other documents are required to be filed. The
Acquired Assets are not and will not be encumbered by any
liens arising out of or relating to unpaid taxes for which the
Seller is responsible hereunder.
(n) ASSISTANCE AFTER THE CLOSING. After the Closing, the Seller
shall assist the Purchaser in the loading of all of the
Acquired Assets for shipment to a location determined by the
Purchaser.
(o) RELIANCE. The foregoing representations and warranties are
made by the Seller with the knowledge and expectation that the
Purchaser is placing complete reliance thereon.
(p) NO UNTRUE STATEMENTS. No representation or warranty by the
Seller in this Agreement or in any writing furnished or to be
furnished pursuant hereto, contains or will contain any untrue
statement of a material fact, or omits, or will omit to state
any material fact required to make the statements herein or
therein contained not misleading.
9. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Purchaser hereby
represents and warrants to the Seller as follows:
(a) ORGANIZATION AND EXISTENCE. The Purchaser is a corporation
duly organized, validly existing, and in good standing under
the laws of the State of Delaware and is duly qualified to do
business as a foreign corporation in all other states where
the nature of the Purchaser's business requires such
qualification, including the State of Texas.
(b) POWER AND AUTHORITY. The Purchaser has full corporate power
and authority to execute, deliver and perform this Agreement
and the Other Agreements.
(c) AUTHORIZATION. The execution, delivery and performance of this
Agreement and the Other Agreements any the Purchaser have been
duly authorized by all requisite corporate action.
(d) BINDING EFFECT. Upon execution and delivery by the Purchaser,
this Agreement and the Other Agreements will be and constitute
the valid, binding and legal obligations of the Purchaser
enforceable against the Purchaser in accordance with the terms
hereof and thereof, except as the enforceability hereof and
thereof may be subject to the effect of (i) any applicable
bankruptcy, in solvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally, and
(ii) general
7
principles of equity regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(e) NO DEFAULT. Neither the execution and delivery of this
Agreement or the Other Agreements nor full performance by the
Purchaser of its obligations hereunder or thereunder will
violate or breach, or otherwise constitute or give rise to a
default under, the terms or provisions of the Purchaser's
Certificate of Incorporation or Bylaws or of any material
contract, commitment, or other obligation to which the
Purchaser is a party.
(f) RELIANCE. The foregoing representations and warranties are
made by the Purchaser with the knowledge and expectation that
the Seller is placing complete reliance thereon.
(g) NO UNTRUE STATEMENTS. No representation or warranty by the
Purchaser in this Agreement or in any writing furnished or to
be furnished pursuant hereto, contains or will contain any
untrue statement of a material fact, or omits, or will omit to
state any material fact required to make the statements herein
or therein contained not misleading.
10. CONDITIONS PRECEDENT TO PERFORMANCE BY THE PURCHASER. The obligations
of the Purchaser to consummate the transactions contemplated by this Agreement
and to pay the Purchase Price, are subject to the satisfaction, at or before the
Closing Date, of all the following conditions, any one or more of which may be
waived in writing by the Purchaser:
(a) OPINION OF COUNSEL. The Seller shall have delivered at the
Closing to the Purchaser an opinion of the Seller's counsel
dated as of the Closing Date in form and substance reasonably
satisfactory to the Purchaser to the effect that: (i) Tulsa
Pipeline Equipment & Supply and Xxxxxxxx Heavy Equipment are
validly organized and existing corporations in good standing
under the laws of the states in which they were incorporated,
with full corporate power to carry on the business in which
they are engaged, and are duly qualified to do business in the
State of Texas; (ii) the performance of this Agreement and the
consummation of the transactions contemplated herein will not
result in any breach or violation of any terms or provisions
of or cause a default under the Articles of Incorporation as
amended, or Bylaws, as amended, of Tulsa Pipeline Equipment &
Supply and Xxxxxxxx Heavy Equipment, or to said counsel's
knowledge and belief any order, rule, or regulation of any
court, governmental agency or body having jurisdiction over
the Seller; (iii) no provision of the Articles of corporation,
as amended, Bylaws, as amended, minutes or share certificates
of Tulsa Pipeline Equipment & Supply and Xxxxxxxx Heavy
Equipment prevents the Purchaser from purchasing the Acquired
Assets to be sold as contemplated by this Agreement or
performing its obligations under this Agreement; (iv) to said
counsel's knowledge and belief, the Seller has the power and
right to execute and deliver and perform its obligations under
this Agreement, and any other agreement or undertaking called
for hereunder; (v) this Agreement and the Other
8
Agreements constitute the binding obligation of the Seller,
enforceable against the Seller in accordance with their
respective terms, subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and that the
remedy of specific performance or of other equitable relief is
subject to the discretion of the court before which any
proceeding therefor is brought; and (vi) said counsel has no
knowledge of any litigation, proceeding, or governmental
investigation or labor dispute pending or threatened against
or relating to the Seller, its properties or businesses,
except as set forth herein or in said opinion.
(b) CERTIFICATES OF GOOD STANDING. The Seller shall have delivered
to the Purchaser certificates or telegrams issued by
appropriate governmental authorities evidencing the good
standing of Tulsa Pipeline Equipment & Supply and Xxxxxxxx
Heavy Equipment as of a date not more than 10 days prior to
the Closing Date, in the States of Oklahoma and Texas,
respectively, and that Tulsa Pipeline Equipment & Supply is
qualified to do business in the State of Texas as a foreign
corporation.
(c) CHANGE OF NAME. Before the Closing, Tulsa Pipeline Equipment &
Supply shall change its name to a name reasonably approved in
advance by the Purchaser. At the Closing, the Seller shall
deliver to the Purchaser evidence of such change in the name
of Tulsa Pipeline Equipment & Supply.
(d) RESOLUTIONS. The Purchaser's counsel shall have received
certified resolutions of a stockholder's meeting of the Seller
pursuant to which this Agreement and the transactions
contemplated hereby were duly and validly approved, adopted
and ratified by the stockholders of the Seller all in form and
content reasonably Satisfactory to such counsel, authorizing
(i) the execution, delivery and performance of this Agreement,
(ii) such other documents and instrument as shall be necessary
to consummate the transactions contemplated hereby and
thereby, and (iii) all actions to be taken by the Seller
hereunder.
(e) ACCESS TO RECORDS. With respect to the Business only, the
Seller shall afford the Purchaser access, during normal
business hours, to all of the Seller's business operations,
properties, books, files, and records, and will cooperate in
the Purchaser's examination thereof. No such examination,
however, shall constitute a waiver or relinquishment by the
Purchaser of its right to rely upon the covenants,
representations, and warranties made herein or pursuant hereto
by the Seller. Until the Closing hereunder or the termination
of this Agreement, whichever shall occur first, and after the
termination of this Agreement in the event this Agreement does
not close, the Purchaser will hold in confidence all
information so obtained by the Purchaser as a result of such
examination.
9
(f) COMPLIANCE. The Seller shall cause its officers and employees
to comply with all applicable provisions of this Agreement.
(g) INSURANCE. From the date hereof, until the Closing, the Seller
shall keep all of the Acquired Assets insured in accordance
with the present practice, and maintain, preserve and keep the
Acquired Assets in reasonably good condition and state of
repair, reasonable wear excepted.
11. CONDITIONS PRECEDENT TO THE PERFORMANCE OF THE SELLER. The obligations
of the Seller to consummate the transactions contemplated by this Agreement are
subject to the satisfaction, at or before the Closing Date, of all of the
following conditions:
(a) OPINION OF COUNSEL. The Purchaser shall have delivered at the
Closing to the Seller an opinion of the Purchaser's counsel
dated as of the Closing Date in form and substance reasonably
satisfactory to the Seller to the effect that: (i) the
Purchaser is a validly organized and existing corporation in
good standing under the laws of the State of Delaware, with
full corporate power to carry on the business in which it is
engaged, and is duly qualified to do business in the State of
Texas; (ii) the performance of this Agreement and the
consummation of the transactions contemplated herein will not
result in any breach or violation of any terms or provisions
of or cause a default under the Certificate of Incorporation,
as amended, or Bylaws, as amended, of the Purchaser, or to
said counsel's knowledge and belief any order, rule, or
regulation of any court, governmental agency or body having
jurisdiction over the Purchaser; no provision of the
Certificate of Incorporation, as amended, Bylaws, as amended,
minutes or share, certificate of the Purchaser prevents the
Purchaser from purchasing the Acquired Assets to be sold as
contemplated by this Agreement or performing its obligations
under this Agreement; (iv) to said counsel's knowledge and
belief, the Purchaser has the power and right to execute and
deliver and perform its obligations under this Agreement, and
any other agreement or undertaking called for hereunder; (v)
this Agreement and the Other Agreements constitute the binding
obligation of the Purchaser, enforceable against the Purchaser
in accordance with their respective terms, subject to any
applicable Bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the rights of creditors
generally and that the remedy of specific performance or of
other equitable relief is subject to the discretion of the
court before which any proceeding therefor is brought; and
(vi) said counsel has no knowledge of any litigation,
proceeding, or governmental investigation or labor dispute
pending or threatened against or relating to the Purchaser,
its properties or businesses, except as set forth herein or in
said opinion.
(b) CERTIFICATES OF GOOD STANDING. The Purchaser shall have
delivered to the Seller certificates or telegrams issued by
appropriate governmental authorities evidencing the good
standing of the Purchaser as of a date not more than 10 days
prior to the Closing Date, in the State of Delaware and
foreign qualification in the State of Texas.
10
(c) RESOLUTIONS. The Seller shall have received certified
resolutions of the Board of Directors of the Purchaser, in
form reasonably satisfactory to counsel for the Seller,
authorizing execution, delivery and performance of this
Agreement by the Purchaser and all actions to be taken by the
Purchaser hereunder.
12. SATISFACTION OF LIENS AND ENCUMBRANCES. On or before the Closing Date,
the Seller shall take all such action as shall be legally required in order to
deliver to the Purchaser good and marketable title to all of the Acquired
Assets, free and clear of all liens, pledges, claims, security interests,
mortgages, encumbrances and restrictions of all types and nature whatsoever
(collectively the "Liens"), except only for such (i) permitted liens which have
been approved in advance by the Purchaser, and (ii) the terms and conditions of
the Contract Rights and the Other Contracts (collectively the "Permitted
Liens"). Such action shall include, without limitation, the payment in full of
all indebtedness for money borrowed by the Seller which is secured by the Liens
on the Acquired Assets (which payment may be made, in whole or in part, by
application and payment of all or a portion of the Purchase Price to the holders
of such indebtedness of the Seller), and, in connection therewith, to deliver to
the Purchaser and its counsel appropriate UCC form-3 or termination statements,
satisfactions of mortgages, and other documents which the Purchaser and its
counsel shall reasonably require to evidence the termination of all of the Liens
other than the Permitted Liens.
13. ACCESS TO FORMER BUSINESS RECORDS. For a period of seven years
following the Closing, the Purchaser will retain all business records
constituting part of the Acquired Assets and the Assumed Liabilities. During
such period, the Purchaser will afford authorized representatives of the Seller
free and full access to all of such records at reasonable times and during
normal business hours at the principal business office of the Purchaser, or at
such other location or locations at which such business records may be stored or
maintained from time to time, and will permit such representatives to make
abstracts from, or copies of, any of such records, or to obtain temporary
possession of any thereof as may be reasonably required by the Seller at the
Seller's sole cost and expense. During such period, the Purchaser will, at the
Seller's expense, cooperate with the Seller in furnishing information, evidence,
testimony, and other reasonable assistance in connection with any action,
proceeding, or investigation relating to the Seller's conduct of the Business
prior to the Closing. The Purchaser shall not be liable for destruction of any
such records which destruction is not the result of negligence or willful act.
14. EMPLOYMENT. Effective as of the Closing Date, the Seller may terminate
the employment of some or all of its employees (the " Employees"). Some or all
of the Employees may be offered employment by the Purchaser effective on the
Closing Date on such terms and conditions as may be determined by the Purchaser.
The Seller shall be solely responsible for and shall pay all benefits which may
be due to any of the Employees as a result of any such termination of employment
by the Seller.
15. PROPERTY TAXES. All property taxes with respect to the Acquired Assets
for the current taxation period shall be prorated among the parties hereto as of
the date of the Closing. The aggregate amount to be prorated shall be the actual
amount of taxes to be due for the year to which the proration applies or in the
absence thereof the good faith estimate of the parties as to the expected tax
xxxx for such year. At the Closing, the Purchase Price shall be credited with
any such
11
property taxes which are paid by the Purchaser relating to any period before the
Closing. If the Seller has prepaid any such property taxes before the Closing,
the Purchaser shall reimburse the Seller for any such property taxes so prepaid
which relate to a period after the Closing.
16. ACTIONS OF THE SELLER FOLLOWING THE CLOSING. Following the Closing,
the Seller shall refer to the Purchaser all communications intended for Tulsa
Pipeline Equipment & Supply.
17. SURVIVAL OF WARRANTIES. All representations and warranties made by the
parties in this Agreement or in any agreement, document, statement or
certificate furnished hereunder or in connection with the negotiation, execution
and performance of this Agreement shall survive the Closing and any instrument
delivered as described herein for a period of 15 months after the Closing; all
covenants shall survive so long as applicable. Notwithstanding any investigation
or audit conducted before or after the Closing Date or the decision of any party
to complete the Closing, each party shall be entitled to rely upon the
representations, covenants, warranties and agreements set forth herein and
therein.
18. NO BROKERS. Each of the parties represents and warrants to the other
parties that all negotiations relative to this Agreement have been carried on by
such party directly and without the intervention of any person, firm,
corporation or entity who or which may be entitled to any brokerage or finder's
fee or other commission in respect of the execution of this Agreement or the
consummation of the transactions contemplated hereby, and each party shall
indemnify and hold harmless all of the other parties hereto against any and all
claims, losses, liabilities or expenses which may be asserted against any such
other party as a result of the dealings, arrangements or agreements of such
party or any of its affiliates with any such person, firm, corporation or
entity.
19. INDEMNIFICATION BY THE SELLER. The Seller agrees to indemnify and hold
harmless the Purchaser against any and all liability, damage, loss or expense
(including reasonable counsel fees), resulting from, arising out of, or
connected with:
(a) Any breach of the representations and warranties made by the
Seller in this Agreement or the Other Agreements, for the
period of survival of the breached representation and warranty
set forth in Paragraph 17 of this Agreement.
(b) The nonfulfillment of any agreement or covenant made by the
Seller in this Agreement or in the Other Agreements.
Notwithstanding the provisions of this Paragraph 19 of this Agreement, the
Purchaser agrees that it shall not seek indemnification under this Paragraph 19
until such time as the aggregate amount of the indemnifiable liability, damage,
loss or expense incurred by the Purchaser exceeds $25,000.00. In addition, the
aggregate liability of the Seller with respect to the aggregate amount of all
claims asserted under this Paragraph 19 shall in no event exceed the Purchase
Price.
20. INDEMNIFICATION BY THE PURCHASER. The Purchaser agrees to indemnify
and hold harmless the Seller against any and all liability damage, loss or
expense (including reasonable counsel fees), resulting from, arising out of, or
connected with:
12
(a) Any breach of the representations and warranties made by the
Purchaser in this Agreement or in the Other Agreements for the
period of survival of the breached representation and warranty
set forth in Paragraph 17 of this Agreement.
(b) The nonfulfillment of any agreement or covenant made by the
Purchaser in this Agreement or in the Other Agreements,
including the Assumption of Liabilities Agreement.
21. DESTRUCTION OF THE ACQUIRED ASSETS. If, on or before the Closing, any
substantial portion of the Acquired Assets shall suffer a loss due to fire,
flood, tornado, hurricane, earthquake, riot, accident or other calamity, whether
or not insured, to such an extent that in the opinion of the Purchaser there
will be a delay in repairing or replacing any of the Acquired Assets so lost,
then the Purchaser may, at its sole option, declare that this Agreement is null
and void, and thereafter, no party shall have any liability to any other party
hereunder or in connection with any other instrument executed in relation to the
transactions contemplated herein.
22. CLOSING. The Closing Date of the sale and purchase contemplated
hereunder shall be on the 29 day of May, 1998, subject to acceleration or
postponement from time to time as the Seller and the Purchaser mutually agree.
The Closing shall be held at the offices of the Purchaser located at 00000 Xxxxx
Xxxxxxx-Xxxxxxx Xxxx, Xxxxxxx Xxxxx 00000, at 10:00 a.m., Houston, Texas time,
on the Closing Date unless another hour or place is mutually agreed upon by the
Seller and the Purchaser.
23. DELIVERIES AT THE CLOSING BY THE SELLER.
(a) The bills of sale and any other required form of conveyance
covering the Acquired Assets to be sold hereunder as more
fully described in ANNEX 3 attached hereto, free and clear of
all liens, encumbrances, charges, escrows, equities, and other
restrictions, except as may be otherwise permitted hereunder.
(b) The Consulting Agreement executed by Xxxxxxxx as described in
ANNEX 1 attached hereto.
(c) The opinion of counsel in he form described in Paragraph 10(a)
hereof.
(d) The certificates of good standing as described in Paragraph
10(b) hereof.
(e) Evidence of the change of he name of Tulsa Pipeline Equipment
& Supply as described in Paragraph 10(c) hereof.
(f) The certified copies of various corporate resolutions as
described in Paragraph 10(d) hereof.
(g) Any other document which may be necessary to carry out the
intent of this Agreement.
13
24. DELIVERIES AT THE CLOSING BY THE PURCHASER.
(a) By wire transfer, the sum of ninety percent of the Purchase
Price, as adjusted for inventory on hand at Closing, less
$400,000.00.
(b) The Promissory Note in the amount of $400,000.00 as described
in ANNEX 2 attached hereto.
(c) The opinion of counsel in the form described in Paragraph
11(a) hereof.
(d) The certificates of good standing as described in Paragraph
11(b) hereof.
(e) The certified copies of the various corporate resolutions as
described in Paragraph 11(c) hereof.
(f) The Consulting Agreement as described in ANNEX 1 attached
hereto.
(g) The Assumption of Liabilities Agreement as described in ANNEX
4 attached hereto.
(h) Any other document which may be necessary to carry out the
intent of this Agreement, including SCHEDULE 2 revised to show
inventory on hand at Closing.
25. DELIVERIES FOLLOWING THE CLOSING BY THE SELLER. Within 45 days
following the Closing, the Seller shall deliver to the Purchaser any of the
Acquired Assets which were not complete and assembled to the Purchaser's
reasonable satisfaction as of the Closing. To the extent that the Seller fails
to deliver any of the Acquired Assets as described in this paragraph, the
Purchase Price shall be adjusted by the value of any such of the Acquired Assets
not so delivered.
26. DELIVERIES FOLLOWING THE CLOSING BY THE PURCHASER. Within 45 days
following the Closing, the Purchaser shall deliver the remainder of the Purchase
Price by means of a wire transfer of immediately available funds to an account
designated by the Seller, after making all adjustments to the Purchase Price as
called for herein.
27. PUBLIC ANNOUNCEMENTS. Except as otherwise required by law, no public
announcements shall be made by any party regarding the transactions contemplated
hereby without the prior approval of the other parties, which approval shall not
be unreasonably withheld.
28. ATTORNEY'S FEES. In the event that it should become necessary for any
party entitled hereunder to bring suit against the other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable attorney's fees and costs of court incurred by
the other party.
29. BENEFIT. All the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
14
30. NOTICES. All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or communicated by electronic transmission, or, if
mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, with postage prepaid and addressed to the
party to receive same, if to the Purchaser, addressed to Mr. M. Xxxxxxx Xxxxx at
00000 Xxxxx Xxxxxxx-Xxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000, telephone (281)
000-0000, and fax (000) 000-0000; and if to the Seller, addressed to Mr. Xxxxx
Xxxxxxxx at 0000 Xxxxxx Xxxx, Xxxxxxx, Xxxxx 00000, telephone (000) 000-0000,
and fax (000) 000-0000; provided, however, that if either party shall have
designated a different address by notice to the other given as provided above,
then any subsequent notice shall be addressed to such party at the last address
so designated.
31. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the successors of each of the parties hereto. The Purchaser may
assign this Agreement to any other entity as it may choose, without the prior
consent of the Seller.
32. NO THIRD PARTIES. This Agreement is not intended to, and shall not,
create any rights in or confer any benefit whatsoever upon any person other than
the parties hereto. The assumption of any liability or obligation by the
Purchaser pursuant to this Agreement and the exclusion of any liability or
obligation hereunder shall have effect and shall create enforceable rights only
as between the parties to this Agreement, and is not intended to and shall not
be enforceable by, create any rights of whatever nature in, or confer any
benefit whatsoever upon any person other than the parties to this Agreement.
33. CONSTRUCTION. Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
34. WAIVER. No course of dealing on the part of any party hereto or its
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
35. CUMULATIVE RIGHTS. The rights and remedies of any party under this
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
36. INVALIDITY. In the event any one or more of the provisions contained
in this Agreement or in any instrument referred to herein or executed in
connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
37. TIME OF THE ESSENCE. Time is of the essence of this Agreement.
15
38. MULTIPLE COUNTERPARTS. This Agreement may be exercised 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.
39. LAW GOVERNING. This Agreement hall be construed and governed by the
laws of the State of Texas, and all obligations hereunder shall be deemed
performable in Xxxxxx County, Texas.
40. PERFECTION OF TITLE. The parties hereto shall do all other acts and
things that may be reasonably necessary or proper, fully or more fully, to
evidence, complete or perfect this Agreement, and to carry out the intent of
this Agreement.
41. ENTIRE AGREEMENT. This instrument contains the entire understanding of
the parties and may not be changed orally, but only by an instrument in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the Purchaser and the Seller have each caused this
Agreement to be executed by their respective duly authorized officers, as of the
date first above written.
CRC-XXXXX PIPELINE
INTERNATIONAL, INC.
By:__________________________________
M. Xxxxxxx Xxxxx, Chief Executive
Officer
TULSA PIPELINE EQUIPMENT &
SUPPLY, INC.
By:__________________________________
Xxxxx Xxxxxxxx, President
XXXXXXXX HEAVY EQUIPMENT, INC.
By:__________________________________
Xxxxx Xxxxxxxx, President
______________________________________
XXXXX XXXXXXXX, individually and doing
business as HHC INTERNATIONAL
16
