SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
December 4, 1998
(Date of earliest event reported)
Tower Tech, Inc.
(Exact name of registrant as specified in its charter)
Oklahoma 1-12556 73-1210013
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
11935 South I-44 Service Road, Oklahoma City, Oklahoma 73173
(Address of principal executive offices) (Zip Code)
(405) 290-7788
Registrant's telephone number, including area code
<PAGE>
Item 1. Changes in Control of Registrant.
Not Applicable.
Item 2. Acquisition or Disposition of Assets.
On December 4, 1998, the Company consummated the sale of its
industrial modular cooling tower rental division (the "Division") to
Aggreko Inc., an unrelated party, for $13,500,000, with $12,150,000
paid in cash at closing and the remaining $1,350,000 paid by delivery
of Aggreko Inc.'s promissory note (the "Note"). The Note bears
interest at 1% above prime. The outstanding principal balance of the
Note, together with accrued interest, is due and payable on December
4, 1999. The assets sold included the modular cooling tower rental
division fleet, other rental division fleet equipment, and certain
assets used in the operation of the rental division. The Company will
continue to operate its businesses of building factory-assembled
cooling towers and field-erected cooling towers.
The purchase price for the assets sold was determined based upon the
results of arm's length negotiations between representatives of the
Company and Aggreko Inc.
In connection with the sale of assets described above, Aggreko Inc.,
the Company, and Harold D. Curtis, the Company's Chief Executive
Officer, entered into a Noncompetition Agreement. The Noncompetition
Agreement generally prohibits the Company and Mr. Curtis from
conducting any business in competition with the Division, as well as
hiring or contacting certain of the Company's prior employees who
worked in the Division.
Additionally, in connection with the sale of assets described above,
the Company and Aggreko Inc. entered into a License Agreement and a
Supply Agreement. The License Agreement grants to Aggreko Inc. an
exclusive license to use for a limited time period the patents,
trademarks, trade names and other proprietary rights related to the
Division. The Supply Agreement describes the terms upon which the
Company has agreed to sell to Aggreko Inc., and Aggreko Inc. has
agreed to purchase from the Company, all modular cooling tower units
and replacement parts necessary for future operations of the
Division.
This description of the Asset Purchase Agreement, the Note, and the
related documents described above, and the transactions provided for
in such documents, is not complete. It is qualified by reference to
the Asset Purchase Agreement, a copy of which has been filed as
Exhibit 99.1 to this Current Report, and the other agreements filed
as exhibits to this Current Report.
Item 3. Bankruptcy or Receivership.
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not Applicable.
Item 5. Other Events.
Not Applicable.
Item 6. Resignations of Registrant's Directors.
Not Applicable.
Item 7. Financial Statement and Exhibits.
(a) Financial statements of business acquired.
None.
(b) Pro forma financial information.
Attached.
(c) Exhibits.
99.1 Asset Purchase Agreement dated as of December 4, 1998
between the Company and Aggreko Inc.
10.26 Promissory Note dated as of December 4, 1998 to the
Company from Aggreko Inc.
10.27 Noncompetition Agreement dated as of December 4, 1998
between the Company, Harold D Curtis and Aggreko Inc.
10.28 License Agreement dated as of December 4,1998 between
the Company and Aggreko Inc.
10.29 Supply Agreement dated as of December 4, 1998 between
the Company and Aggreko Inc.
Item 8. Change in Fiscal Year.
Not Applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
Not Applicable.
<PAGE>
TOWER TECH, INC.
INTRODUCTION TO PRO FORMA
CONDENSED FINANCIAL INFORMATION (UNAUDITED)
In December 1998, Tower Tech, Inc. consummated the sale of certain
assets constituting its rental division to Aggreko Inc. The Unaudited Condensed
Pro Forma Statements of Operations for the year ended November 30, 1997, and for
the nine months ended August 31, 1998, presents the results of operations of
Tower Tech, Inc. assuming the sale of the rental division had been consummated
as of the beginning of the period presented.
The Unaudited Condensed Pro Forma Balance Sheet as of August 31, 1998
reflects the assets, liabilities and the capitalization of Tower Tech, Inc.,
assuming the sale occurred on August 31, 1998, after giving effect to the
elimination of the disposed assets of the rental division and receipt of
the sale proceeds.
The pro forma information does not purport to be indicative of the
results of operations or the financial position which would have actually been
obtained if the disposition transactions had been consummated as above
described. In addition, the pro forma financial information does not
purport to be indicative of results of operations or financial position
which may be obtained in the future.
The pro forma financial information should be read in conjunction with
Tower Tech, Inc.'s historical Financial Statements and Notes thereto contained
in the 1997 Annual Report of Form 10-KSB, and Form 10-QSB for the period ending
August 31, 1998.
<PAGE>
TOWER TECH, INC.
UNAUDITED CONDENSED PRO FORMA BALANCE SHEET
As of August 31, 1998
<TABLE>
<CAPTION>
(Dollars in thousands)
<S> <C> <C> <C>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
Assets
Current assets $ 14,305 $ 13,500 A $ 20,274
(7,531) B
Property and equipment, net 21,727 (6,865) A 14,862
Other assets 2,338 (775) A 1,523
(40) B
--------- ----------- ----------
Total assets $ 38,370 $ (1,711) $ 36,659
========= =========== =========
Liabilities and stockholders equity
Current liabilities $ 16,222 $(7,531) B $ 8,691
Income taxes 1,971 A 1,971
Long term debt 15,487 15,487
Stockholders' equity 6,661 3,889 A 10,510
(40) B
Total liabilities and stockholders'
equity $ 38,370 $ (1,711) $ 36,659
========= ========== =========
Pro forma adjustments:
A) To record the sale of rental division assets for $13.5 million and
recognize related tax effect, including reduction of $775 deferred tax
asset related to utilization of NOL carryforward.
B) To record the use of proceeds to pay off the Company's line of credit
facility and write off related debt issue costs.
</TABLE>
<PAGE>
TOWER TECH, INC.
UNAUDITED CONDENSED PRO FORMA STATEMENT OF OPERATIONS
For The Nine Months Ended August 31, 1998
<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
Total revenues $ 17,979 $ (5,030) A $ 12,949
Cost of goods sold and constructed 14,397 (613) A 13,784
---------- ------------ ---------
Gross profit 3,582 (4,417) (835)
General, administrative, selling,
and research and development 3,692 (22) A 3,670
--------- ----------- ---------
Operating loss (110) (4,395) (4,505)
Interest expense (727) 209 B (518)
Other income 87 87
---------- ---------- ---------
Loss before income taxes (750) (4,186) (4,936)
Income tax benefit 300 1,675 C 1,975
---------- ---------- ---------
Net loss $ (450) $ (2,511) $ (2,961)
=========== =========== =========
Weighted average shares outstanding -
basic and diluted 3,532,355 3,532,355
========= =========
Net loss per common share -
basic and diluted $ (0.13) $ (0.84)
=========== ===========
Pro forma adjustments:
A) To eliminate the rental division operations.
B) To eliminate interest expense related to the rental division.
C) To record the income tax effect of the pro forma adjustments at a
statutory rate of 40%.
</TABLE>
<PAGE>
TOWER TECH, INC.
UNAUDITED CONDENSED PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended November 30, 1997
<TABLE>
<CAPTION>
(Dollars in thousands except per share amounts)
<S> <C> <C> <C>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
Total revenues $ 19,551 $ (1,214) A $ 18,337
Cost of goods sold and constructed 13,843 (436) A 13,407
--------- ------------ ---------
Gross profit 5,708 (778) 4,930
General, administrative, selling,
and research and development 3,680 (21) A 3,659
-------- ----------- ---------
Operating income 2,028 (757) 1,271
Interest expense (647) 57 B (590)
Other income 66 66
--------- ------------ ---------
Income before income taxes 1,447 (700) 747
Income tax benefit 616 280 C 896
--------- ------------ ---------
Net income $ 2,063 $ (420) $ 1,643
=========== =========== ==========
Weighted average shares outstanding -
basic and diluted 3,538,113 3,538,113
========= =========
Net income per common share -
basic and diluted $ 0.58 $ 0.46
========== ==========
Pro forma adjustments:
A) To eliminate the rental division operations.
B) To eliminate interest expense related to the rental division.
C) To record the income tax effect of the pro forma adjustments at a
statutory rate of 40%.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOWER TECH, INC.
Date: December 18, 1998 By:ss/CHARLES D. WHITSITT
------------------------
Charles D. Whitsitt
Chief Financial Officer
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 4th day of December, 1998, by and between AGGREKO INC., a
Louisiana corporation ("Purchaser") and TOWER TECH, INC., an Oklahoma
corporation ("Seller").
WITNESSETH:
WHEREAS, Seller is currently engaged in the business of, among other
things, leasing and renting industrial modular cooling towers (the "Business");
WHEREAS, in consideration of certain payments to be made to Seller by
Purchaser and the assumption of certain liabilities by Purchaser, Seller desires
to sell to Purchaser and Purchaser desires to purchase from Seller, upon the
terms and subject to the conditions hereinafter set forth, the Business as an
ongoing concern, together with substantially all of the properties and assets,
tangible or intangible, of Seller used in connection with the Business (except
for the Retained Assets, as defined in Section 1.02 hereof); and
WHEREAS, Seller will derive certain substantial benefits from the
transactions contemplated by this Agreement and in connection therewith is
willing to (i) deliver to Purchaser certain agreements not to compete with
Purchaser and the Business for a reasonable period of time in a specific
geographic area, and (ii) make certain representations, warranties, covenants
and agreements set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants hereinafter contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Purchaser and Seller, on the basis of, and in reliance upon, the respective
representations, warranties, covenants, obligations, indemnities and agreements
set forth in this Agreement, and upon the terms and subject to the conditions
contained herein, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.01 Assets to be Purchased. Subject to the terms and conditions
hereinafter set forth, and except for the Retained Assets, Seller hereby agrees
to sell, assign, transfer, convey and deliver, or cause to be sold, assigned,
transferred, conveyed and delivered, to Purchaser, and Purchaser agrees to
purchase, accept and acquire from Seller, on the Closing Date (as defined in
Section 3.01 hereof), on a going concern basis, all of the assets, properties,
rights and interests of every kind and description, personal or mixed, tangible
or intangible, used by Seller in connection with the Business (all of which
assets, properties, rights and interests are hereinafter collectively referred
to as the "Acquired Assets"), including, without limitation, the following:
<PAGE>
(a) Tangible Personal Property. All of Seller's modular
cooling tower rental fleet, equipment inventories, including pumps,
electrical distribution panels, heat exchangers, pipings, fittings and
other inventoried items (collectively, the "Rental Equipment"), shop
equipment, tools, operating supplies, and other tangible personal
property used in connection with the Business, including, without
limitation, those assets listed on Schedule 1.01(a) to this Agreement.
(b) Books, Records and Written Materials. All books of
account, records, files, invoices, customer lists, supplier lists,
promotional and advertising materials, plans, designs and other
drawings, catalogs, brochures, manuals and handbooks and other similar
data reduced to writing or other storage media and used by Seller in
connection with the Business or any Acquired Asset (collectively, the
"Documentary Information").
(c) Third Party Warranties. All rights and benefits of Seller
under any and all manufacturer's, merchant's, repairmen's and other
third-party warranties, guaranties and service or replacement programs
relating to the Business or any Acquired Asset, including, without
limitation, those assets listed on Schedule 1.01(c) to this Agreement
(collectively, the "Warranties").
(d) Personal Property Leases. All of Seller's right, title and
interest in and to those personal property leases (collectively, the
"Personal Property Leases") listed on Schedule 1.01(d) to this
Agreement (collectively, the "Leased Personal Property").
(e) Acquired Contracts. All rights and benefits of Seller in,
to or under those written agreements, contracts, sales commitments,
purchase orders, customer commitments, security agreements or
instruments and undertakings entered into in the ordinary course of the
Business which have been (i) entered into on or before the date hereof
and are listed on Schedule 1.01(e) to this Agreement or (ii) are
entered into after the date hereof, are related exclusively to the
Business and satisfy the requirements of Section 6.02(c) hereof
(collectively, the "Acquired Contracts").
(f) Permits and Approvals. All of the licenses, permits,
approvals, variances, rights, waivers or consents (collectively, the
"Permits") issued to Seller by any federal, state, county, parish,
local or foreign governmental entity or municipality or subdivision
thereof or any authority, arbitrator, department, commission, board,
bureau, body, agency, court or instrumentality thereof (collectively,
"Governmental Authorities") and used by Seller exclusively in
connection with the operations of the Business, including, without
limitation, the Permits listed on Schedule 1.01(f) to this Agreement.
(g) Goodwill. The goodwill associated with the Business.
<PAGE>
1.02 Retained Assets. Notwithstanding anything contained in Section
1.01 hereof to the contrary, Seller shall, and hereby does, expressly retain all
of Seller's right, title and interest in and to the following assets,
properties, rights and interests, including, without limitation, certain assets
related to the Business which are expressly described herein (all of which
assets, properties, rights and interests are hereinafter collectively referred
to as the "Retained Assets"):
(a) cash, cash equivalents, certificates of deposit and other
investments in marketable securities of third-party issuers;
(b) all receivable for goods and/or services rendered by
Seller with respect to the Business prior to the Closing Date;
(c) assets, properties and rights related exclusively to
affiliates, divisions or operations of Seller other than the Business;
(d) all intellectual property of any and all kinds owned or
licensed by or to Seller (it being understood that Purchaser shall have
the right to use certain intellectual property of Seller as and to the
extent provided in the License Agreement referred to in Section 3.07);
and
(e) any and all rights to the name "Tower Tech" and any
derivation thereof; provided, however, that, without payment of
additional consideration, Purchaser shall be permitted a transition
period from the Closing Date until March 31, 1999 or such later date
mutually agreed to in writing as shall be required to utilize and phase
out all items or printed materials bearing the "Tower Tech" name
included in the Acquired Assets.
1.03 Assignability and Consents. To the extent that the assignment of
any Acquired Contract, Warranties, Permits, Documentary Information, Leased
Personal Property or other Acquired Asset to be assigned to Purchaser as
provided herein shall require the consent or waiver of any third party or any
Governmental Authority (each a "Required Consent"), Seller shall use its best
efforts to obtain the consent or waiver of each such third party or Governmental
Authority to such assignment, in each case in form and substance satisfactory to
Purchaser, on or prior to the Closing Date. Schedule 1.03 to this Agreement sets
forth a list of all of the Required Consents.
1.04 Assumed Liabilities and Obligations. On the Closing Date,
Purchaser shall assume and agree to pay, perform and discharge as and when due
only the following obligations and liabilities of Seller:
(a) All executory obligations with respect to the Business
accruing exclusively, and based upon events occurring, after the
Closing Date under (i) the Personal Property Leases, and (ii) the
Acquired Contracts.
All of the foregoing to be assumed by Purchaser hereunder are
collectively referred to herein as the "Assumed Liabilities".
<PAGE>
1.05 Retained Liabilities and Obligations. Notwithstanding any other
provision of this Agreement or doctrine of law, Seller shall retain, and
Purchaser shall not assume or be liable with respect to, any liability or
obligation of Seller ("Retained Liabilities"), except those expressly described
in, and only to the extent specifically assumed by Purchaser pursuant to,
Section 1.04 hereof.
ARTICLE II
PURCHASE PRICE
2.01 Payment. As full payment for the Acquired Assets, the
Noncompetition Agreement (as defined in Section 3.06 hereof), the License
Agreement (as defined in Section 3.07 hereof) and the Supply Agreement (as
defined in Section 3.08 hereof), at the Closing Purchaser shall (a) assume the
Assumed Liabilities, and (b) shall pay and/or deliver to Seller:
(i) the sum of Twelve Million One Hundred Fifty Thousand
Dollars ($12,150,000.00), by wire transfer of immediately available funds to
such accounts as shall be designated in writing by Seller at least three (3)
business days prior to the Closing Date (the "Cash Portion"); and
(ii) the Purchaser's promissory note in the principal amount
of One Million Three Hundred Fifty Thousand Dollars ($1,350,000.00) and
substantially in the form attached hereto as Exhibit A (the "Note").
2.02 Allocation of Purchase Price. The Purchase Price and the Assumed
Liabilities represent the amount agreed upon by the parties to be the value of
the Acquired Assets, the Noncompetition Agreement, the License Agreement and the
Supply Agreement, it being further agreed that the Purchase Price and the
Assumed Liabilities shall be allocated among the Acquired Assets, the
Noncompetition Agreement, the License Agreement and the Supply Agreement in
accordance with the allocation set forth on Schedule 2.02. Purchaser and Seller
shall report the purchase and sale of the Acquired Assets, the Noncompetition
Agreement, the License Agreement and the Supply Agreement in their respective
federal, state, local or foreign tax returns in accordance with the allocation
set forth on such Schedule 2.02.
ARTICLE III
CLOSING
3.01 Date, Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Seller located at two miles east on Highway 62, Chickasha, Oklahoma 73023 at
12:00 a.m., local time, on December 4, 1998, or as promptly as practicable
thereafter as soon as the conditions set forth in Article VIII are satisfied, or
at such other date, time or place fixed by mutual written consent of Purchaser
and Seller, but in no event later than December 18 , 1998. All proceedings to
take place at the Closing shall take place simultaneously, and no delivery shall
be considered to have been made until all such proceedings have been completed
(the time and date of such Closing is referred to herein as the "Closing Date").
<PAGE>
3.02 Conveyance of Assets. At the Closing, Seller shall deliver or
cause to be delivered to Purchaser for the purpose of transferring the Acquired
Assets to Purchaser such documents, bills of sale, certificates of title,
endorsements, assignments and instruments necessary, advisable or desirable to
vest in Purchaser good and marketable title to all of the Acquired Assets being
transferred by Seller to Purchaser hereunder (such documents and instruments
hereinafter collectively referred to as the "Transfer Documents"), such Acquired
Assets shall be free and clear of any and all liens, prior assignments, security
interests, charges, pledges, claims or encumbrances whatsoever (collectively,
"Liens"), except Liens relating to the Assumed Liabilities.
3.03 Assumption Instrument. At the Closing, Purchaser shall, at the
request of Seller, execute and deliver to Seller the assumption agreement with
respect to the Assumed Liabilities, in substantially the form attached hereto as
Exhibit B (the "Assumption Instrument").
3.04 Payment of Purchase Price. At the Closing, Purchaser shall pay to
Seller the Purchase Price by delivering to Seller the Cash Portion as
contemplated by Section 2.01(b)(i) and the Note.
3.05 Taxes, Charges and Fees.
(a) Sales, Use and Transfer Taxes. At the Closing, Purchaser
shall pay all transfer taxes, documentary stamp taxes, recording
charges and other taxes imposed by any Governmental Authority in
connection with the sale and, transfer of the Acquired Assets.
Notwithstanding the foregoing sentence, Seller shall remain solely
responsible for any and all taxes imposed by any Governmental Authority
in connection with the use or rental of the Acquired Assets on or prior
to the Closing Date. In addition, Seller shall have the sole
responsibility of representing its position in any future audit by any
Governmental Authority with respect to any tax periods during which the
Seller owned the Acquired Assets or operated the Business.
(b) Payment of Personal Property Taxes. Personal property
taxes associated with the Acquired Assets that are imposed on a
periodic basis and are payable for a tax period ending on or before
December 31, 1998 shall be paid by Seller and Seller shall have the
sole responsibility of such taxes (and any payments due on account of
such taxes).In addition, Seller acknowledges and agrees that Seller
shall remain solely responsible for all other Taxes (as defined in
Section 4.15) and any payments due on account of such Taxes arising on
or prior to the Closing Date. Purchaser shall have the sole
responsibility for the payment of personal property taxes associated
with the Acquired Assets (and any payments due on account of such
taxes) which are payable for a tax period beginning on or after January
1, 1999.
3.06 Noncompetition Agreement. At the Closing, Seller, Harold D. Curtis
and Purchaser shall enter into a Noncompetition Agreement (herein so called) in
substantially the form attached hereto as Exhibit C.
<PAGE>
3.07 License Agreement. At the Closing, Seller and Purchaser shall
enter into a License Agreement (herein so called) in substantially the form
attached hereto as Exhibit D.
3.08 Supply Agreement. At the Closing, Seller and Purchaser shall enter
into a Supply Agreement (herein so called) in substantially the form attached
hereto as Exhibit E.
3.09 Other Documents. All other documents, certificates, consents,
approvals and notations, confirmations and papers required by Article VIII
hereof as conditions to Closing, and all appropriate receipts, shall be
delivered to Seller and to Purchaser, as the case may be, at the Closing.
3.10 Covenants and Further Assurance. Seller shall, at any time and
from time to time after the Closing Date, upon request of Purchaser and without
further cost or expense to Purchaser, execute and deliver such instruments of
conveyance and assignment and shall take such action as Purchaser may reasonably
request to more effectively transfer to and vest in Purchaser, and to put
Purchaser in possession of, any and all of the Acquired Assets, free and clear
of any and all Liens, or otherwise carry out the transactions contemplated by
this Agreement. Purchaser shall, at the time and from time to time after the
Closing Date, upon request of Seller and without further cost or expense to
Seller, execute and deliver such instruments of assumption and shall take such
other action as Seller may reasonably request to more effectively evidence or
effect the assumption by Purchaser of the Assumed Liabilities or otherwise carry
out the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
In order to induce the Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller hereby represents and
warrants as of the date hereof as follows:
4.01 Organization and Good Standing; Power and Authority. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Oklahoma. Seller has full corporate power and authority to
execute and deliver this Agreement and to perform Seller's obligations hereunder
and to consummate the transactions contemplated hereby, to operate the Business
as it is now being conducted and to own or lease the Acquired Assets. Seller is
qualified to do business and is in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse effect upon the
Business, the Acquired Assets or Seller.
<PAGE>
4.02 Corporate Authorization. The execution, delivery and performance
of this Agreement and all other agreements and instruments executed and
delivered by Seller in connection herewith and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been, and the other agreements and instruments to be executed and
delivered by Seller in connection herewith will be, on or prior to the Closing
Date, duly executed and delivered by Seller, and constitute, or upon execution
and delivery will constitute, the valid, legal and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms.
4.03 Conflicts: Defaults. The execution and delivery of this Agreement
and the other agreements and instruments executed or to be executed in
connection herewith by Seller do not, and the performance by Seller of its
obligations hereunder and thereunder and the consummation by Seller of the
transactions contemplated hereby or thereby, will not (i) violate, conflict
with, or constitute a breach or default under any of the terms of Seller's
Articles of Incorporation or Bylaws, or except for the Required Consents, any
Permit, patent, trademark, copyright or other intellectual property right of
Seller, Warranties, Documentary Information, Acquired Contract or Personal
Property Lease or any other obligation under or with respect to the Acquired
Assets, (ii) result in the creation or imposition of any Liens in favor of any
third party upon any of the Acquired Assets or the Business, (iii) violate or
require any authorization, approval, consent or other action by, or
registration, declaration or filing with or notice to, any Governmental
Authority pursuant to any law, statute, judgment, decree, injunction, order,
writ, rule or regulation of any Governmental Authority affecting the Business or
the Acquired Assets; or (iv) except as set forth on Schedule 4.03, conflict with
or result in a breach of, create an event of default (or event that, with the
giving of notice or lapse of time or both, would constitute an event of default)
under, or give any third party the right to terminate, cancel or accelerate any
obligation under, any contract, agreement, note, bond, guarantee, deed of trust,
loan agreement, mortgage, license, lease, indenture, instrument, order,
arbitration award, judgment or decree to which Seller is a party or by which
Seller or any of its assets or properties are bound or affected, including,
without limitation, the Acquired Assets. There is no pending or, to the best
knowledge of Seller , threatened action, suit, claim, proceeding, inquiry or
investigation before or by any Governmental Authority, involving or to restrain
or prevent the consummation of the transactions contemplated by this Agreement
or that might reasonably be expected to affect the right of Purchaser to acquire
or own the Acquired Assets or the right of Purchaser to operate the Business in
substantially the manner in which it currently is operated.
4.04 Absence of Undisclosed Information. The Business and the Acquired
Assets are not subject to (i) any liabilities or obligations of any nature,
fixed or contingent, or any facts that might give rise to any such liabilities
or obligations, which would materially adversely affect the business, business
prospects, assets, financial condition or results of operations of the Business,
or (ii) to the best knowledge of Seller, any liabilities or adverse claims
against or relating to the Acquired Assets or the Business.
<PAGE>
4.05 Financial Statements. (a) Seller has heretofore delivered to
Purchaser true and correct copies of the Seller's audited balance sheet as at
November 30, 1997, and related statements of operations, retained earnings and
cash flows for the twelve month period ending November 30, 1997, together with
the notes relating thereto (collectively, the "Audited Financial Statements").
The Audited Financial Statements: (A) have been prepared in accordance with the
books and records of Seller; (B) have been prepared in accordance with generally
accepting accounting principles consistently applied with Seller's financial
statements for its business; (C) reflect and provide adequate reserves and
disclosures in respect of all liabilities of the Business, including without
limitation, all contingent liabilities, as of November 30, 1997 to the extent
required by generally accepted accounting principles consistently applied; and
(D) present fairly the financial condition of the Business at such date and the
results of operations and cash flows of the Business for the period then ended.
(b) Seller has heretofore delivered to Purchaser true and correct
copies of the Seller's unaudited balance sheet as at August 31, 1998, and
related statements of operations, retained earnings and cash flows for the nine
month period ending August 31, 1998, together with the notes relating thereto
(collectively, the "Unaudited Financial Statements"). The Unaudited Financial
Statements: (A) have been prepared in accordance with the books and records of
Seller; (B) have been prepared in accordance with generally accepting accounting
principles consistently applied with Seller's financial statements for its
business; (C) reflect and provide adequate reserves and disclosures in respect
of all liabilities of the Business, including without limitation, all contingent
liabilities, as of August 31, 1998 to the extent required by generally accepted
accounting principles consistently applied; and (D) present fairly the financial
condition of the Business at such date and the results of operations and cash
flows of the Business for the period then ended.
(c) Seller has heretofore delivered to Purchaser true and correct
copies of the Seller's unaudited balance sheet as at October 31, 1998, and
related statements of operations, retained earnings and cash flows for the
eleven month period ending October 31, 1998, together with the notes relating
thereto with respect to Seller's Rental Division (collectively, the "Rental
Division Financial Statements"). The Rental Division Financial Statements: (A)
have been prepared in accordance with the books and records of Seller; (B) have
been prepared in accordance with generally accepting accounting principles
consistently applied with Seller's financial statements for the Rental Division;
(C) reflect and provide adequate reserves and disclosures in respect of all
liabilities of the Rental Division, including without limitation, all contingent
liabilities, as of October 31, 1998 to the extent required by generally accepted
accounting principles consistently applied; and (D) present fairly the financial
condition of the Rental Division at such date and the results of operations and
cash flows of the Rental Division for the period then ended.
<PAGE>
4.06 Adequacy of Acquired Assets. Seller has good and marketable title
to all of the Acquired Assets and the Acquired Assets are, or will be, upon
consummation of the transactions contemplated by this Agreement on the Closing
Date, free and clear of all Liens. The Acquired Assets include all assets and
properties of Seller of every kind and description, personal or mixed, tangible
or intangible, the use of which is reasonably necessary to enable Purchaser to
conduct the Business as it has been conducted by Seller prior to the date hereof
and all such property is in good operating condition and in a state of
reasonable maintenance and repair. There are no unpaid liabilities, claims or
obligations arising from the ownership, use or operation of the Acquired Assets
or the Business which could give rise to any mechanic's, materialman's or other
statutory lien against the Acquired Assets, or for which Purchaser could be held
responsible. All industrial modular cooling towers included in the Rental
Equipment are capable of performing at the capacity levels defined in this
Section 4.06. For the purposes of defining capacity, one (1) nominal ton equals
fifteen thousand (15,000) British Thermal Units (BTU) per hour. The modular
cooling tower rental fleet units are constructed in 6'x6' modules where each
module is rated with a capacity of one hundred (100) tons. For example, a Model
360 measures 12' x 30' and consists of 10-6'x6' modules, thus having a rated
capacity of one thousand (1000) tons. This rated capacity is only applicable to
operating conditions of 95(Degree) F Hot Water Temperature (HWT), 85(Degree)F
Cold Water Temperature (CWT), 76(Degree)F Wet Bulb (WB), and 3 gallons per
minute (gpm) per ton of water flow rate. The charts set forth on Schedule 4.06
shall be used to verify capacity where capacity multiples for altitude, wet bulb
and entering water temperatures vary from the above conditions.
4.07 Personal Property Leases. Schedule 1.01(d) to this Agreement sets
forth as of the date of this Agreement a list and brief description of each
lease or other agreement or right, whether written or oral (including in each
case the rental, the expiration date thereof and a brief description of the
property covered), under which Seller is lessee of, or holds or operates any
machinery, equipment, vehicle or other tangible personal property owned by a
third party and used in connection with the Business. All personal property
leases to which Seller is a party either as lessor or lessee with respect to the
Acquired Assets are valid and enforceable in accordance with their respective
terms, and there is not under any of such leases any material breach or default
on the part of Seller or, to the knowledge of Seller, on the part of any other
party thereto, or any condition or event that, with the giving of notice or
lapse of time or both, would constitute such a material breach or default on the
part of Seller or, to the knowledge of Seller, on the part of any other party
thereto.
4.08 Intellectual Property. (i) Schedule 4.08 to this Agreement sets
forth a true and accurate description of all intellectual property and all
registrations and applications for any of the foregoing owned or used by Seller
in connection with the conduct of the Business (the "Intellectual Property").
(ii) Seller is the owner of all right, title and interest in
and to the Intellectual Property free and clear of all Liens and
without obligation to make any royalty, license or other payment with
respect thereto, including, without limitation, any royalty, license or
other payment resulting from any infringement of any third party
rights.
(iii) There have not been any claims, actions or judicial or
other adversary proceedings involving Seller concerning any item of the
Intellectual Property; there is no basis for any such action or
proceeding; and to the best knowledge of Seller no such action or
proceeding is threatened.
4.09 Contracts and Commitments. Except as set forth in Schedule 4.09 to
this Agreement, Seller is not, with respect to the Business or the Acquired
Assets, a party to any written or oral:
(i) contract not made in the ordinary course of business,
other than this Agreement, under which the total outstanding obligation
is in excess of Ten Thousand Dollars ($10,000.00);
<PAGE>
(ii) consulting agreement or contract for the employment of
any, employee or other person on a full-time, part-time or consulting
basis that is not terminable upon notice of thirty (30) days or less
without cost or other liability resulting solely from such termination;
(iii) agreement relating to the lease of any property, real or
personal, whether as lessor or lessee that involves future obligations
of more than Ten Thousand Dollars ($10,000.00);
(iv) contract for the purchase or sale of real property or
capital or fixed assets that involves future obligations of more than
Ten Thousand Dollars ($10,000.00); or
(v) contracts and other agreements containing covenants under
which the Business may not compete in any line of business or with any
person in any geographic area.
Except as set forth in Schedule 4.09 to this Agreement, Seller is not in breach
of or in default under any of the contracts, agreements or arrangements set
forth in Schedule 4.09 to this Agreement, and no event has occurred that, with
the giving of notice or lapse of time or both, would constitute such a breach or
default. True and complete copies of such contracts, agreements or instruments
have been delivered to Purchaser.
4.10 Inventory. Except as set forth in Schedule 4.10 to this Agreement,
Seller has good title to all inventory included in the Acquired Assets, free and
clear of all Liens. The inventory is adequate for the conduct of the Business
and contains no items of obsolete inventory, and inventory levels are not in
excess of the normal operating requirements of the Business in the ordinary
course of business consistent with past practices.
4.11 Customers and Suppliers. Except as set forth on Schedule 4.11,
Seller is not involved in any material controversy with any of the customers or
suppliers of the Business. Schedule 4.11 to this Agreement lists all customers
or suppliers which, during the twelve (12) months ended October 31, 1998,
accounted for five percent (5%) or more of the purchases or sales of the
materials, products, supplies, equipment or parts used in connection with the
Business or five percent (5%) or more of the revenues of the Business.
4.12 Compliance with Law. Seller is in compliance with all federal,
state, local or foreign laws, statutes, ordinances, regulations, orders and
other requirements of Governmental Authorities having jurisdiction over the
Acquired Assets or the conduct of the Business.
<PAGE>
4.13 Compliance with Permits. Schedule 1.01(f) to this Agreement
contains a true, correct and complete list of all Permits issued to Seller
relating exclusively to the Business or any Acquired Asset currently used by it
in the operation of the Business. Such Permits constitute all franchises,
licenses, permits, certificates and other authorizations from any Governmental
Authorities that are necessary for the conduct of the Business. All such Permits
are in full force and effect, no violations are or have been recorded in respect
of any of the Permits (except those which have been remedied and no proceeding
is pending or, to the best knowledge of Seller, threatened to revoke, withdraw
or limit any such Permit and to the best knowledge of Seller, there is no fact,
error or admission relevant to any such Permit that would permit the revocation,
withdrawal or limitation or result in the threatened revocation, withdrawal or
limitation of any such Permit.
4.14 Litigation. There is no pending or, to the best knowledge of
Seller, threatened litigation, action, suit, proceeding, claim, investigation,
or administrative proceeding against or affecting Seller, by or before any
Governmental Authority, involving or relating to the Business or the Acquired
Assets.
4.15 Taxes. (i) Seller has, or by the Closing Date will have, (A)
timely filed all Tax (as defined in clause (v) of this Section 4.15) returns,
schedules and declarations (including any withholding and information returns)
required to be filed by any jurisdiction to which it is or has been subject, all
of which Tax returns, schedules and declarations are or will, when filed, be
true, complete, accurate and correct in all material respects, (B) paid in full
all Taxes due and payable (or claimed to be due and payable by any federal,
state, local or foreign Taxing authority), (C) paid or finally settled all Tax
deficiencies asserted or assessed against it, and (D) made timely payments to
the proper Governmental Authorities of the Taxes required to be deducted and
withheld from the wages paid to its employees.
(ii) Seller (A) is not delinquent in the payment of any Tax,
(B) has not been granted an extension of time to file any Tax return
prior to or on the Closing Date which has expired, or will expire, on
or before the Closing Date without such return having been filed, and
(C) has not granted to any other person or entity a power of attorney
or similar authorization with respect to the settlement of its
liability for Taxes.
(iii) No deficiencies for any Tax has been claimed, proposed
or assessed (whether or not finally or tentatively, orally or in
writing), no requests for waivers of the time to assess any deficiency
for any Taxes are pending, and there are no pending or threatened Tax
audits, investigations or claims for or relating to (A) the assessment
or collection of Taxes, or (B) a claim for refund made with respect to
Taxes previously paid. There are no matters under discussion or dispute
with any Governmental Authorities with respect to Taxes that may have
been raised, nor are there any issues Seller believes will be raised in
the future, by any Taxing authority with respect to Taxes accruing on
or prior to the Closing Date.
(iv) There are, and as of the Closing Date there will be, no
Liens for Taxes upon the Acquired Assets except for statutory Liens for
Taxes not yet due or delinquent. Purchaser will take title to the
Assets free and clear of any such Liens.
<PAGE>
(v) As used in this Agreement, "Taxes" (and all derivations
thereof) means all federal, state, local and foreign sales, use,
property, payroll and other taxes imposed by any Governmental Authority
with respect to the ownership, operation, transfer, or use of the
Business or the Acquired Assets, or in any other way relating to the
Business or the Acquired Assets.
4.16 Employee Agreements. Schedule 4.16 contains a list of the names
and current aggregate annual cash compensation and identifies the other material
benefits of each employee of the Business and any employment contracts,
confidentiality agreements or non-compete agreements to which Seller is a party.
Except as set forth on Schedule 4.16 to this Agreement, no labor organization,
collective bargaining representative or group represents or claims to represent
any of the Business' present employees.
4.17 Place of Property. Seller represents that all of the items
comprising the Acquired Assets (other than those Rental Equipment items covered
by the leases listed on Schedule 4.17) are located either at the Seller's
facilities located in Chickasha, Oklahoma or in Oklahoma City, Oklahoma. In
addition, Seller represents that all of the items covered by the leases listed
on Schedule 4.17 are located where specified in such leases. Seller shall not
remove any of such property from such locations without the prior written
consent of the Purchaser, except as may be required in the ordinary course of
the Business.
4.18 Bulk Sales. The aggregate book value of the Rental Equipment, shop
equipment, tools, operating supplies, and other personal property included in
the Acquired Assets on the date hereof is, and on the Closing Date shall be,
less than twenty-five percent (25%) of the aggregate book value of the
equipment, shop equipment, tools, operating supplies and other personal property
owned by Seller on each such date. At least fifty-one percent (51%) of the
aggregate book value of the Rental Equipment, shop equipment, tools, operating
supplies and other personal property owned by the Seller and utilized in
connection with the Business is located in Oklahoma.
4.19 Brokers, Finders and Agents. Seller is not directly or indirectly
obligated to anyone as a broker, finder, agent or in any other similar capacity
in connection with this Agreement or the transactions contemplated hereby.
4.20 Other Information. The information provided and to be provided by
Seller to Purchaser in this Agreement or in the Schedules or in any other
writing pursuant hereto (including, without limitation, the representations and
warranties contained in this Article IV) does not and will not contain any
untrue statement of a material fact and does not and will not omit to state a
material fact required to be stated herein or therein or necessary to make the
statements contained herein or therein, in light of the circumstances in which
they are made, not false or misleading. Copies of all financial statements,
reports, documents and other materials heretofore or hereafter delivered or made
available to Purchaser pursuant hereto and thereto were or will be at the time
of their delivery to Purchaser true, complete and accurate copies of such
financial statements, reports, documents and other materials.
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
In order to induce Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, the Purchaser hereby represents
and warrants as of the date hereof as follows:
5.01 Organization and Good Standing: Power and Authority. Purchaser is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Louisiana. Purchaser has full corporate power and authority
to execute and deliver this Agreement, and to perform Purchaser's obligations
hereunder and to consummate the transactions contemplated hereby. Purchaser is
qualified to do business and is in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse affect upon Purchaser.
5.02 Corporate Authorization. The execution, delivery and performance
of this Agreement and all other agreements and instruments executed and
delivered by Purchaser in connection herewith and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been, and the other agreements and instruments to be executed and
delivered by Purchaser in connection herewith will be, on or prior to the
Closing Date, duly executed and delivered by Purchaser, and constitute, or upon
execution and delivery will constitute, the valid, legal and binding obligations
of Purchaser, enforceable against Purchaser in accordance with their respective
terms.
5.03 Conflicts; Defaults. The execution and delivery of this Agreement
and the other agreements and instruments executed or to be executed in
connection herewith by Purchaser do not, and the performance by Purchaser of its
obligations hereunder and thereunder and the consummation by Purchaser of the
transactions contemplated hereby or thereby, will not (i) violate, conflict
with, or constitute a breach or default under any of the terms of Purchaser's
Articles of Incorporation or Bylaws; (ii) violate or require any authorization,
approval, consent or other action by, or registration, declaration or filing
with or notice to, any Governmental Authority pursuant to any law, statute,
judgment, decree, injunction, order, writ, rule or regulation of any
Governmental Authority; or (iii) conflict with or result in a breach of, create
an event of default (or event that, with the giving of notice or lapse of time
or both, would constitute an event of default) under, or give any third party
the right to terminate, cancel or accelerate any obligation under, any contract,
agreement, note, bond, guarantee, deed of trust, loan agreement, mortgage,
license, lease, indenture, instrument, order, arbitration award, judgment or
decree to which Purchaser is a party or by which Purchaser or any of its assets
or properties are bound or affected. There is no pending or, to the best
knowledge of Purchaser, threatened action, suit, claim, proceeding, inquiry or
investigation before or by any Governmental Authorities, involving or to
restrain or prevent the consummation of the transactions contemplated by this
Agreement or that might reasonably be expected to affect the right of Purchaser
to purchase the Acquired Assets.
<PAGE>
5.04 Brokers. Finders and Agents. Purchaser is not directly or
indirectly obligated to anyone as a broker, finder, agent or in any other
similar capacity in connection with this Agreement or the transactions
contemplated hereby.
ARTICLE VI
COVENANTS OF SELLER
Seller hereby covenants to Purchaser that:
6.01 Access and Information. Seller shall afford to Purchaser and
Purchaser's accountants, counsel and other representatives full and reasonable
access from time to time during normal business hours throughout the period from
the date hereof until the Closing Date to Seller's properties, books, contracts,
commitments, personnel and records relating to the Business and the Acquired
Assets, and, during such period, Seller will (or will cause its representatives
to) furnish to Purchaser and Purchaser's accountants, counsel and other
representatives copies of such documents and all such other information
concerning the Acquired Assets, the Retained Assets, the Assumed Liabilities,
the Retained Liabilities and the business, properties and personnel of the
Business as Purchaser may reasonably request.
6.02 Conduct of the Business Pending Closing. Prior to the earlie
of the Closing or termination of this Agreement:
(a) Ordinary Course of Business. From the date hereof through
the Closing Date, Seller shall use all reasonable efforts to preserve
the business organization of the Business intact, to keep available to
the Business the services of all current officers and employees and to
preserve for Purchaser the goodwill of the suppliers, distributors,
customers, employees and others having business relations with the
Business.
(b) Operation of Business. From the date hereof through the
Closing Date, except as otherwise permitted by this Agreement or
consented to in writing by Purchaser, Seller shall continue the
operation of the Business in the ordinary course and consistent with
past practices, and maintain the assets, properties and rights of the
Business (including, without limitation, the Acquired Assets) in at
least as good order and condition as exists on the date hereof, subject
to ordinary wear and tear.
(c) Material Contracts. Seller shall not enter into any
contract, purchase order or other commitment directly or indirectly
affecting the Acquired Assets or the Business, except contracts and
commitments entered into the ordinary course of business consistent
with past practices that are terminable on no more than thirty (30)
days notice without penalty or obligation, and that do not call for
aggregate payments by, or have an estimated cost of performance to
Seller in excess of Five Thousand Dollars ($5,000.00) under any single
contract or series or in the aggregate of Fifteen Thousand Dollars
($15,000.00) without the prior written consent of Purchaser.
<PAGE>
(d) Material Adverse Change. Seller shall give prompt written
notice (but not later than five (5) days after the occurrence thereof)
to Purchaser of any (i) material adverse change in the business,
business prospects, assets, financial condition or results of operation
of the Business; and (ii) change that would render any representation
or warranty made by Seller hereunder untrue or incomplete in any
material respect as of the date of such change.
(e) Compliance with Representations and Warranties. Without
limiting the foregoing, except as otherwise expressly provided in this
Agreement, Seller shall not take any action or permit to occur any
event, directly or indirectly within the control of Seller, that would
cause any representation or warranty contained herein to be inaccurate
or untrue on or before the Closing Date.
6.03 Exclusivity. From and after the date hereof to and including the
Closing Date, neither Seller nor any of its shareholders, officers, directors,
employees, or agents, shall, directly or indirectly, solicit, initiate or engage
in or continue (including without limitation, furnishing any information
concerning the Acquired Assets or the Business) discussions, inquiries or
proposals, or enter into any negotiations for the purpose or with the intention
of leading to any proposal, concerning the acquisition or purchase by any other
party of the Seller, the Business or any part thereof or any Acquired Asset
(except, in the later case, for the purchase of inventory in the ordinary course
of the Business).
ARTICLE VII
ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER
7.01 Employee Matters.
(a) Employment. Seller agrees to cooperate with Purchaser and
give Purchaser access to employee information and assistance with
employee communications in connection with Purchaser's potential
employment of the current employees of the Business. Seller will also
cooperate and assist Purchaser in connection with any pre-employment
screening, interviewing, physicals or drug testing, with respect to
Seller's employees, that Purchaser desires to conduct, as well as
distribution of communication materials and enrollment forms for
Purchaser's employee benefit plans. However, Purchaser shall be under
no obligation to (i) hire any employees of the Business; (ii) maintain
any of Seller's employees which it does hire at the same position,
title, or level or responsibility that they had with Seller; (iii)
grant seniority or service credit to any such employee; or (iv) pay any
specified level of compensation or benefits to any such employee.
<PAGE>
(b) Employment Liabilities. Purchaser does not assume, and
Seller hereby retains, any and all employment related costs,
obligations, and liabilities of the Business incurred on or prior to
Closing or which relate to events, occurrences, conditions, actions, or
inactions which took place or were in effect on or prior to Closing
(whether or not reported, filed, billed, or paid for on or prior to
Closing), including, without limitation, costs, obligations and
liabilities relating to severance rights of employees of the Business,
employment discrimination, unfair labor practices, wage and hour laws,
health and safety, workers compensation, wrongful discharge,
compensation, fringe benefits, insurance, employee benefit plans,
pensions, retiree medical, severance pay, vacations, torts, accidents,
disabilities, injuries, sickness, exposure to harmful conditions,
breach of oral or written employment contracts or collective bargaining
agreements, or breach of law, statute, judgment, decree, injunction,
order, writ, rule or regulation of any Governmental Authority. The
entire liability for continuing acts or conditions (such as exposure to
harmful conditions or continuing discrimination) shall be assumed by
Seller if any material portion of the act or condition occurred on or
prior to Closing.
(c) COBRA. Purchaser does not assume, and Seller agrees to be
solely responsible for, any and all liabilities relating to health care
continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") which relate to, or
arise out of or in connection with, this transaction or the events
contemplated by this Agreement.
7.02 Product Warranties. Seller warrants that each item constituting
part of the Rental Equipment conforms to the statements appearing on containers,
labels and in Seller's technical literature. Seller agrees that Purchaser shall
be entitled to Seller's warranties as described on Schedule 7.02 with respect to
each item constituting part of the Rental Equipment.
7.03 Storage of Rental Equipment. Seller hereby grants Purchaser the
right to store some or all of the Rental Equipment on Seller's premises in
Oklahoma City, Oklahoma for a period of up to one (1) year after the Closing
Date, at a nominal cost to Purchaser , in accordance with the Land Lease
Agreement (herein so called) in substantially the form attached hereto as
Exhibit F, to be executed by Seller and Purchaser at Closing.
7.04 Office Lease. Seller hereby authorizes Purchaser to utilize
certain office space of Seller, in accordance with the Office Lease Agreement
(herein so called) in substantially the form attached hereto as Exhibit G, to be
executed by Seller and Purchaser at Closing.
ARTICLE VIII
CONDITIONS OF CLOSING
8.01 Obligation of Purchaser. The obligation of Purchaser to consummate
the purchase contemplated by the provisions of this Agreement shall be subject
to the fulfillment on or prior to the Closing Date of the following conditions
(any of which may be waived in writing, in whole or in part, by Purchaser):
<PAGE>
(a) Representations and Warranties; Performance. The
representations and warranties of Seller set forth in this Agreement
shall be true, correct and complete as of the Closing Date (as though
such representations and warranties were made anew at and as of such
date) except with respect to the effect of transactions specifically
permitted by the provisions of this Agreement, and Seller shall have
duly performed in all material respects all agreements and covenants
herein required to be performed by Seller on or before the Closing
Date.
(b) Officer's Certificates. Seller shall have furnished
Purchaser with a certificate, executed on behalf of Seller by one of
its executive officers and dated the Closing Date, confirming the
matters expressed in Section 8.01(a) hereof.
(c) Certificate of Authorities. Seller shall have furnished to
Purchaser (i) certificates of the Secretary of State of Oklahoma, dated
as of a date nor more than five (5) business days prior to the Closing
Date, attesting to the organization and good standing of Seller, (ii) a
copy certified by the Secretary of State of Oklahoma, as of a date not
more, than five (5) business days prior to the Closing Date, of
Seller's Articles of Incorporation and all amendments thereto, (iii) a
copy certified by the Secretary of Seller, of the Bylaws of Seller, as
amended and in effect as of the Closing Date, and (iv) a copy,
certified by the Secretary of Seller, of resolutions duly adopted by
the Board of Directors of Seller duly authorizing the transactions
contemplated in this Agreement.
(d) Consents and Approvals. All material consents, approvals
and novations, on terms satisfactory to Purchaser, of third parties and
Governmental Authorities (including, without limitation, the Required
Consents) that shall be (i) required to consummate the transactions
contemplated hereby or (ii) reasonably necessary to permit Purchaser to
operate the Business, shall have been obtained.
(e) Transfer Documents. Purchaser shall have received
the Transfer Documents as contemplated in Section 3.02 hereof.
(f) Receipt of Opinion of Counsel. Purchaser shall have
received an opinion, dated as of the Closing Date, of counsel to
Seller, in substantially the form attached hereto as Exhibit H.
(g) Noncompetition Agreement. Purchaser shall have
received the Noncompetition Agreement executed by Seller and Harold D.
Curtis.
(h) License Agreement. Purchaser shall have received the
License Agreement executed by Seller.
(i) Supply Agreement. Purchaser shall have received the Supply
Agreement executed by Seller.
<PAGE>
(j) Land Lease Agreement. Purchaser shall have received the
Land Lease Agreement executed by Seller.
(k) Office Agreement. Purchaser shall have received the Office
Lease Agreement executed by Seller.
(l) Rental Equipment. The Rental Equipment shall consist of,
among other items, (i) a minimum of one hundred and sixty-seven (167)
cooling towers with an aggregate minimum rated capacity of one hundred
twenty-five thousand four hundred and fifty (125,450) tons, (ii)
fifty-seven (57) pumps, (iii) thirty-two (32) electrical distribution
panels, (iv) four (4) heat exchangers, (v) one (1) centrifugal
separator and (vi) one (1) fre-dox unit.
8.02 Obligation of Seller. The obligation of Seller to consummate the
sale contemplated by the provisions of this Agreement shall be subject to the
fulfillment on or prior to the Closing Date of the following conditions (any of
which may be waived in writing, in whole or in part, by Seller):
(a) Representations and Warranties; Performance. The
representations and warranties of Purchaser set forth in this Agreement
shall be true, correct and complete as of the Closing Date (as though
such representations and warranties were made anew at and as of such
date) except with respect to the effect of transactions specifically
permitted by the provisions of this Agreement, and Purchaser shall have
duly performed in all material respects all agreements and covenants
herein required to be performed by Purchaser on or before the Closing
Date.
(b) Officer's Certificates. Purchaser shall have furnished
Seller with a certificate, executed on behalf of Purchaser by one of
its executive officers and dated the Closing Date, confirming the
matters expressed in Section 8.02(a) hereof.
(c) Certificate of Authorities. Purchaser shall have furnished
to Seller (i) certificates of the Secretary of State of Louisiana,
dated as of a date nor more than five (5) business days prior to the
Closing Date, attesting to the organization and good standing of
Purchaser, (ii) a copy certified by the Secretary of State of
Louisiana, as of a date not more, than five (5) business days prior to
the Closing Date, of Purchaser's Articles of Incorporation and all
amendments thereto, (iii) a copy certified by the Secretary of
Purchaser, of the Bylaws of Purchaser, as amended and in effect as of
the Closing Date, and (iv) a copy, certified by the Secretary of
Purchaser, of resolutions duly adopted by the Board of Directors of
Purchaser duly authorizing the transactions contemplated in this
Agreement.
(d) Consents and Approvals. All material consents, approvals
and novations, on terms satisfactory to Seller, of third parties and
Governmental Authorities (including, without limitation, the Required
Consents) that shall be (i) required to consummate the transactions
contemplated hereby or (ii) reasonably necessary to permit Purchaser to
operate the Business, shall have been obtained.
<PAGE>
(e) Assumption Instrument. Seller shall have received from
Purchaser the Assumption Instrument as contemplated by Section 3.03
hereof.
(f) License Agreement. Seller shall have received the License
Agreement executed by Purchaser.
(g) Supply Agreement. Seller shall have received the Supply
Agreement executed by Purchaser.
(h) Land Lease Agreement. Seller shall have received the Land
Lease Agreement executed by Purchaser.
(i) Office Lease Agreement. Seller shall have received the
Office Lease Agreement executed by Purchaser.
(j) Taxes, Charges, and Fees. Seller shall have received
verification from Purchaser, in form and substance satisfactory to
Seller, that Purchaser has paid, or caused to be paid, any taxes,
charges and fees required to be paid by Purchaser pursuant to Section
3.05(a).
ARTICLE IX
TERMINATION OF AGREEMENT
9.01 Termination of Agreement. This Agreement and the transactions
contemplated hereby may be terminated and abandoned at any time on or prior to
the Closing as follows:
(a) by the written consent of Purchaser and Seller;
(b) by Purchaser, (i) if there is or occurs an inaccuracy in
any material respect in the representations and warranties of Seller
set forth in this Agreement, which inaccuracy is not capable of being
cured by December 18, 1998, (ii) if there has been a breach in any
material respect of a covenant of Seller, or a failure in any material
respect on the part of Seller to comply with its obligations hereunder,
and such breach or failure is not capable of being cured by December
18, 1998, or (iii) if any of the conditions set forth in Section 8.01
hereof are not satisfied on or before December 18, 1998;
(c) by Seller, (i) if there is or occurs an inaccuracy in any
material respect in the representations and warranties of Purchaser set
forth in this Agreement, which inaccuracy is not capable of being cured
by December 18, 1998, (ii) if there has been a breach in any material
respect on the part of Purchaser to comply with its obligations
hereunder, and such breach or failure is not capable of being cured by
December 18, 1998, or (iii) if any of the conditions set forth in
Section 8.02 hereof are not satisfied on or before December 18, 1998;
or
<PAGE>
(d) by Purchaser or Seller if the Closing Date shall not have
occurred before December 18, 1998, for any reason other than the
failure of the party seeking to terminate this Agreement to perform in
any material respect its obligations hereunder or the breach or
inaccuracy in any material respect of a representation or warranty made
by such party.
9.02 Obligations Upon Termination. Except for obligations provided in
Section 11.02 hereof, in the event that this Agreement is terminated pursuant to
the provisions of Section 9.01(a) or (d) hereof, Seller shall have no obligation
to Purchaser and Purchaser shall have no obligation to Seller. In the event that
Seller or Purchaser shall terminate this Agreement pursuant to Section 9.01(b)
or (c) hereof, respectively, the right of Purchaser or Seller, as the case may
be, to pursue any and all rights it may have at law or equity or hereunder shall
survive unimpaired.
ARTICLE X
INDEMNIFICATION
10.01 Indemnification by Purchaser. From and after the Closing Date,
Purchaser shall indemnify, defend and hold Seller harmless from and against and
reimburse Seller for any and all claims, losses, liabilities, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees)
(collectively, "Liabilities") that may be incurred by, imposed upon or asserted
against Seller arising from: (i) any failure of Purchaser to assume, pay,
perform and discharge the Assumed Liabilities; (ii) any action, claim, judicial
or other proceeding asserted by any third party against Seller with respect to
any of the Assumed Liabilities; and (iii) any inaccuracy in or breach of any
representation, warranty, covenant, obligation or agreement of Purchaser
contained herein or in any document or instrument delivered pursuant hereto.
10.02 Indemnification by Seller . From and after the Closing Date,
Seller shall indemnify, defend and hold Purchaser harmless from and against and
reimburse Purchaser for any and all Liabilities that may be incurred by, imposed
upon or asserted against Purchaser arising from or relating to: (i) any failure
of Seller to assume, pay, perform and discharge the Retained Liabilities; (ii)
any action, claim, judicial or other proceeding asserted by any third party
against Purchaser with respect to any of the Retained Liabilities; (iii) any
inaccuracy in or breach of any representation, warranty, covenant, obligation or
agreement of Seller contained herein, or in any document or instrument delivered
pursuant hereto; (iv) the operation of the Business or the ownership, use or
sale of the Acquired Assets by Seller prior to the Closing Date (including,
without limitation, any contractual, tax, product, warranty, tort or other
Liability whatsoever); and (v) any failure of Seller to comply with any bulk
sales laws, bulk transfer laws or similar laws of any applicable jurisdiction in
connection with the transactions contemplated by this Agreement. Purchaser may
withhold from Seller any payment otherwise due to Seller pursuant to the Note in
accordance with the provisions of Section 10.05 hereof. Upon the final
determination of any claim for indemnification hereunder, Purchaser may offset
the full amount of such claim for indemnification against the amount due to
Seller pursuant to the Note in accordance with Section 10.05 hereof.
<PAGE>
10.03 Notification of Claim. Each indemnified party under this Article
X will promptly, and within ten (10) days after notice to such indemnified party
of any claim as to which it asserts a claim for indemnification, notify the
indemnifying party of such claim and the amount thereof; provided, however, that
the failure to give such notification shall not relieve the indemnifying party
from any liability which it may have pursuant to the provisions of this Article
X as long as the failure to give such notice within such time is not prejudicial
to the indemnifying party. Notice to an indemnified party for the purpose of the
preceding sentence shall mean the filing of any legal action, receipt of any
claim in writing or similar form of actual notice.
10.04 Defense of Claim. If any claim for indemnification by any
indemnified party arises out of a claim by a person other than such indemnified
party, the indemnifying party may, by written notice to the indemnified party,
undertake to conduct any proceedings or negotiations in connection therewith or
necessary to defend the indemnified party and take all other steps or
proceedings to settle or contest such claim, including, but not limited to, the
employment of counsel; provided, however, that the indemnifying party shall
reasonably consider the advice of the indemnified party as to the defense and
settlement of such claim and the indemnified party shall have the right to
participate, at its own expense, in such defense, but control of such litigation
and settlement shall remain with the indemnifying party. The indemnified party
shall provide all reasonable cooperation in connection with any such defense by
the indemnifying party. Counsel and auditor fees, filing fees and court fees of
all proceedings, contests or lawsuits with respect to any such claim shall be
borne by the indemnifying party. If any such claim is made hereunder and the
indemnifying party elects not to undertake the defense thereof by written notice
to the indemnified party, the indemnified party shall be entitled to
indemnification with respect thereto pursuant to the terms of this Article X. To
the extent that the indemnifying party undertakes the defense of such claim by
written notice to the indemnified party and diligently pursues such defense at
its expense, the indemnified party shall be entitled to indemnification
hereunder only to the extent that such defense is unsuccessful as determined by
a final judgment of a court of competent jurisdiction, or by written
acknowledgment of the parties. If any claim for indemnification by Purchaser
arises out of a claim by Purchaser, then Purchaser shall be entitled to
immediate indemnification hereunder pursuant to Section 10.05 hereof.
10.05 Offset. In the event that Purchaser shall exercise its right to
offset provided in Section 10.02 any such offset shall be collected by reducing
the amount owed by Purchaser to Seller in the following manner (i) first, to the
extent of the principal amount outstanding on the Note, then (ii) to the extent
of any accrued interest on the Note.
ARTICLE XI
MISCELLANEOUS
<PAGE>
11.01 Survival of Representations and Warranties. All representations
and warranties contained in this Agreement, any Exhibit of Schedule hereto or
any certificate, agreement or document delivered in connection with the
transactions contemplated hereby shall survive the consummation of the
transactions contemplated by this Agreement and any investigation on the part of
the parties hereto and shall continue in full force and effect after the Closing
for a period of two (2) years from the Closing Date at which time they shall
expire and Seller shall no longer be liable with respect thereto, except as to
claims made in respect thereof in writing by Purchaser or any other indemnitee
on or before the expiration of such two-year period; provided, however, that the
representations and warranties contained in Sections 4.06, 4.12 and 4.15 shall
survive indefinitely. The covenants and agreements of the parties hereto set
forth in this Agreement shall not be affected by the expiration of any
representation or warranty pursuant to this Section 11.01 and shall survive
indefinitely.
11.02 Expenses. Regardless of whether the transactions contemplated by
this Agreement are consummated, each of the parties hereto shall pay the fees
and expenses of its own counsel, accountants or other experts, and all expenses
incurred by such party incident to the negotiation, preparation, execution,
consummation, and performance of this Agreement and the transactions
contemplated hereby.
11.03 Notices. All notices, requests and other communications under
this Agreement shall be in writing (including a writing delivered by facsimile
transmission) and shall be deemed to have been duly given if delivered
personally, or sent by either certified or registered mail, return receipt
requested, postage prepaid, by overnight courier guaranteeing next day delivery,
or by facsimile, addressed as follows:
(a) If to Seller :
Tower Tech, Inc.
11935 South I-44 Service Road.
P.O. 1838
Oklahoma City, OK 73173
Attn: Harold D. Curtis, Chief Executive Officer
Facsimile: (405) 979-2131
With a required copy to:
Holloway, Dobson, Hudson, Bachman,
Alden, Jennings & Holloway, P.C.
One Leadership Square, Suite 900
211 N. Robinson
Oklahoma City, Oklahoma 73102
Attn: B. Wayne Dabney
Facsimile No.: (405) 235-1707
or at such other address or facsimile number as Seller may have advised
Purchaser in writing; and
<PAGE>
(b) If to Purchaser:
Aggreko Inc.
4607 W. Admiral Doyle Drive
New Iberia, LA 70560
Attn: Terry Dressel, Vice President Finance
Facsimile No.: (318) 367-0870
With a required copy to:
Henry, Meier & Jones, L.L.P.
1700 Pacific Avenue, Suite 2700
Dallas, Texas 75201
Attn: William W. Meier, III
Facsimile: (214) 954-9701
or at such other address or facsimile number as Purchaser may have advised
Seller in writing.
All such notices, requests and other communications shall be deemed to have been
received on the date of delivery thereof, if delivered by hand, on the third day
after the mailing thereof, if mailed, on the next day after the sending thereof,
if by overnight courier, and when receipt is acknowledged, if faxed.
11.04 Waivers and Amendments. No amendment or waiver of any provision
of this Agreement, nor consent to any departure therefrom, shall be effective
unless the same be in writing and signed by each party hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law.
11.05 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, legal
representatives, heirs and assigns. No party hereto shall assign any of its
rights hereunder or any interest herein without the prior written consent of the
other parties hereto.
11.06 Exhibits and Schedules. The Exhibits and Schedules attached
hereto or referred to herein are incorporated herein and made a part hereof for
all purposes. As used herein, the expression "this Agreement" means this
document and such Exhibits and Schedules.
11.07 Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICT OF LAWS.
<PAGE>
11.08 Arbitration. The parties shall use their respective best efforts
to settle amicably any disputes, differences or controversies arising between
the parties out of or in connection with or in respect of this Agreement.
However, if not so settled then the same shall be submitted to arbitration and
to the fullest extent permitted by law, be solely and finally settled by
arbitration, except as specifically provided otherwise in any agreement attached
as an Exhibit hereto. The arbitration proceeding shall be held in Dallas, Texas,
and shall be conducted in accordance with the commercial arbitration rules of
the American Arbitration Association and to the extent not inconsistent
therewith, the Texas General Arbitration Act, Title 10, Vernon's Ann. Civ. Stat.
Judgement upon the award rendered by the arbitrators may be entered in any court
having jurisdiction, or application may be made to such court for a judicial
acceptance of the award and any order of enforcement as the case may be.
11.09 Number and Gender. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
11.10 Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
11.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and 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 of its severance from this
Agreement.
11.12 Entirety. This Agreement contains the agreement and understanding
among the parties with respect to the matters addressed herein and supersedes
all prior representations, inducements, promises or agreements, oral or
otherwise, which are not embodied herein.
11.13 Publicity. Except as otherwise required by law, until the
existence of this Agreement is publicly disclosed, no party hereto shall issue
any press release or make any other public statement, in either case relating to
or connected with or arising out of this Agreement or the matters contained
herein, without obtaining the prior written approval of the other parties to the
contents and the manner of presentation and publication thereof, which approval
shall not be unreasonably withheld.
<PAGE>
11.14 Attorneys' Fees. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the party to such action, proceeding
or arbitration may receive as part of any award, judgment, decision or other
resolution of such action, proceeding or arbitration its costs and attorneys'
fees as determined by the person or body making such award, judgment, decision
or resolution. Should any claim hereunder be settled short of the commencement
of any such action or proceeding, including arbitration, the parties in such
settlement shall be entitled to include as part of the damages alleged to have
been incurred reasonable costs of attorneys or other professionals in
investigation or counseling on such claim.
11.15 Third Party Beneficiaries. Nothing contained herein, express or
implied, is intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assigns any rights or
remedies under or by reason of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
PURCHASER: AGGREKO INC.
By:ss/GEORGE P. WALKER
------------------------------------
Printed Name: George P. Walker
Title: Executive Vice President
By ss/TERREL P. DRESSEL, JR.
-----------------------------------
Printed Name: Terrel P. Dressel, Jr.
Title: Vice President Finance
SELLER: TOWER TECH, INC.
By:ss/HAROLD D. CURTIS
---------------------------------
Printed Name: Harold D. Curtis
Title: Chief Executive Officer
<PAGE>
EXHIBIT A
PROMISSORY NOTE
<PAGE>
EXHIBIT B
ASSUMPTION AGREEMENT
<PAGE>
EXHIBIT C
NONCOMPETITION AGREEMENT
<PAGE>
EXHIBIT D
LICENSE AGREEMENT
<PAGE>
EXHIBIT E
SUPPLY AGREEMENT
<PAGE>
EXHIBIT F
LAND LEASE AGREEMENT
<PAGE>
EXHIBIT G
OFFICE LEASE AGREEMENT
<PAGE>
EXHIBIT H
LEGAL OPINION
<PAGE>
SCHEDULE 1.01(a)
Tangible Personal Property
See Attached Description
<PAGE>
SCHEDULE 1.01(c)
Third Party Warranties
See Attachments
<PAGE>
SCHEDULE 1.01(d)
Personal Property Leases
None
<PAGE>
SCHEDULE 1.01(e)
Acquired Contracts
See Attachments
<PAGE>
SCHEDULE 1.01(f)
Permits and Approvals
None
<PAGE>
SCHEDULE 1.03
Required Consents
None
<PAGE>
SCHEDULE 2.02
Allocation of Purchase Price
See Attachment
<PAGE>
SCHEDULE 4.03
Conflicts; Defaults - List of License Agreements
1. License Agreement dated as of September 1, 1995 by and between Tower
Tech, Inc. and Shriram Cooling Towers Ltd.
2. License Agreement dated as of December 29, 1995 by and between Tower
Tech, Inc. and Ilmed Impianti S.r.L., as amended by that certain
License Extension and Amendment Agreement dated as of October 31, 1998.
3. License Agreement dated as of [September 10, 1997] by and between Tower
Tech, Inc. and Industrial Water Cooling (PTY) LTD.
<PAGE>
SCHEDULE 4.06
Rental Equipment Capacity
See Attachments
<PAGE>
SCHEDULE 4.08
Intellectual Property
I. PATENTS
Patents Issued:
(1) United States. U.S. Patent No. 5,143,657 (9/1/92, FLUID DISTRIBUTOR):
U.S. Patent No. 5,152,458 (10/6/92, AUTOMATICALLY ADJUSTABLE FLUID DISTRIBUTOR);
U.S. Patent No. 5,227,095 (7/13/93, MODULAR COOLING TOWER); U.S. Patent No.
5,457,849 (1/30/96, PULTRUDED COOLING TOWER CONSTRUCTION); U.S. Patent No.
5,457,531 (1/30/96, DUAL LAYERED DRAINAGE COLLECTION SYSTEM).
(2) Europe. European Patent No. 518,579 B1 (French Patent No. 0518579,
German Patent No. 69204913.4, Great Britain Patent No. 0518579, and Italian
Patent No. 0518579), all filed/issued 9/20/95 and directed to and resulting from
European Patent Application No. 92305209.6 and corresponding to U.S. Patent No.
5,143,657 (9/1/92, FLUID DISTRIBUTOR), and U.S. Patent No. 5,152,458 (10/6/92,
AUTOMATICALLY ADJUSTABLE FLUID DISTRIBUTOR).
Patents Pending:
(1) Europe. European Patent Application No. 93900675.5, filed/issued 11/24/92
and designating the countries of Germany, Great Britain, France, and Italy,
corresponding to PCT Application No. US92/10202 (11/24/92, MODULAR COOLING
TOWER); European Patent Application No. 95904756.4, filed/issued 11/29/94 and
designating the countries of Germany, Great Britain, France, and Italy,
corresponding to PCT Application No. US94/13618 (11/29/94, DUAL LAYERED DRAINAGE
COLLECTION SYSTEM).
(2) Patent Cooperation Treaty. PCT Application No. US95/15650, filed/issued
11/30/95 and corresponding to U.S. Patent No. 5,545,356 (8/13/96, INDUSTRIAL
COOLING TOWER/TILT-UP CONCRETE CONSTRUCTION METHOD).
(3) Australia. Australian Patent Application No. 13314/95, filed/issued 11/29/94
and corresponding to PCT Application No. US94.13618 (11/29/94, DUAL LAYERED
DRAINAGE COLLECTION SYSTEM).
(4) Brazil. Brazilian Patent Application No. PI-9408229, filed/issued 11/29/94
and corresponding to PCT Application No. US94/13618 (11/29/94, DUAL LAYERED
DRAINAGE COLLECTION SYSTEM).
(5) China. Chinese Patent Application No. 94-194834.X, filed/issued 11/29/94 and
corresponding to PCT Application No. US94/13618 (11/29/94, DUAL LAYERED DRAINAGE
COLLECTION SYSTEM).
<PAGE>
II. TRADEMARKS
III. TOWER TECH TRADE NAMES
Core-Trex
Water Collection System
Variable-Flow Rotary Spray Nozzle
FulFill 2000
Modular Fan Shroud
SmarTTower
SmarTTower
<PAGE>
SCHEDULE 4.09
Contracts and Commitments
1. License Agreement dated as of September 1, 1995 by and between Tower
Tech, Inc. and Shriram Cooling Towers Ltd.
2. License Agreement dated as of December 29, 1995 by and between Tower
Tech, Inc. and Ilmed Impianti S.r.L., as amended by that certain
License Extension and Amendment Agreement dated as of October 31, 1998.
3. License Agreement dated as of [September 10, 1997] by and between Tower
Tech, Inc. and Industrial Water Cooling (PTY) LTD.
<PAGE>
SCHEDULE 4.10
Inventory
None
<PAGE>
SCHEDULE 4.11
Customers and Suppliers
See Attachments
<PAGE>
SCHEDULE 4.16
Employee Agreements
<PAGE>
SCHEDULE 4.17
Place of Property
See Attachments
<PAGE>
SCHEDULE 7.02
Product Warranties
Seller warrants for a period of one (1) year from the Closing Date that
cooling tower workmanship and materials, excluding defects in pigmentation and
cosmetic deterioration of pultruded or injection-molded parts, shall be free of
defects with respect of any materials manufactured by, and any workmanship
performed by, Seller. Seller will replace or repair, at Seller's discretion, any
such defective workmanship or defective materials within thirty (30) days of a
valid warranty claim by Purchaser.
Seller's warranty is subject to the following conditions: (a) For any
warranty claim, Seller must receive from Purchaser within the warranty period
written notice describing the defect or defects. (b) Purchaser shall not have,
without Seller's written permission, attempted to correct the defect. (c)
Purchaser shall have operated and maintained the equipment in accordance with
Seller's published operating instructions. (d) The defect has been caused after
the Closing Date solely by such things as accident, erosion, corrosion, an
abnormally corrosive or abrasive use environment, normal wear and tear, or from
abuse or neglect. (e) All liability of Seller shall be limited, at Seller's sole
option, to the repair and replacement of defective parts and Seller shall have
no liability for consequential or other damages or for transportation charges
relating to repaired, replaced or defective parts. (f)This warranty is not
transferable. Seller makes no warranty for any materials and equipment
manufactured by parties other than Seller. Benefits to Seller, if any, with
respect to materials and equipment manufactured by other parties, including, but
not limited to, hardware, fans, drift eliminators fill media, float valves,
motors, basin heaters, electrical distribution and control panels, pumps, heat
exchangers, water filtration equipment, fan hubs, pipe and pipe fittings, but
furnished to Seller, are hereby assigned to Purchaser.
Seller's liability hereunder is expressly limited as follows: (a) The
warranties set forth above are Purchaser's exclusive remedies against Seller
with respect to the manufacture, operation or performance of the cooling towers
and are in lieu of any other warranties or guarantees, express or implied,
including the warranties of merchantability and fitness for a particular
purpose. (b) Seller shall not be liable to Purchaser for any consequential,
indirect or liquidated damages, including, but not limited to, loss of profits
or revenue, loss of use of equipment, costs of replacement cooling towers,
additional expenses incurred in the use of equipment or facilities, or claims of
customers of the Purchaser. The disclaimer shall apply to consequential damages
based upon any cause of action asserted against Seller, including claims arising
out of breach of warranty, expressed or implied, guarantee, product liability,
negligence, personal injury or any other clam pertaining to the performance or
non-performance of this contract by Seller. (c) Seller shall not be responsible
for handling or modification of the cooling tower by Purchaser. (d) Except as
otherwise set forth in this Agreement, no statement, remark , agreement,
representation, promise or understanding, oral or written, made by Seller or any
agent, representative or employee which is not contained herein will be
recognized or enforceable or binding upon Seller.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement") is made and entered into as
of the 4th day of December, 1998 by and between AGGREKO INC., a Louisiana
corporation ("Aggreko") and TOWER TECH, INC., an Oklahoma corporation ("Tower
Tech").
WITNESSETH:
WHEREAS, pursuant to that certain Asset Purchase Agreement (herein so
called), dated as of December 4, 1998 by and between Aggreko and Tower Tech,
Tower Tech has agreed to sell to Aggreko and Aggreko has agreed to purchase from
Tower Tech, substantially all of the properties and assets of Tower Tech
relating to the leasing and renting and servicing of industrial modular cooling
towers (the "Business");
WHEREAS, as contemplated by the Asset Purchase Agreement, Tower Tech
shall retain the ownership of certain patents, trademarks, trade names and other
proprietary rights which have been utilized in connection with the Business;
WHEREAS, Aggreko desires to obtain an exclusive license to use for a
limited time period of time such patents, trademarks, trade names and other
proprietary rights in its operation of the Business and Tower Tech is willing to
grant such license to Aggreko on the terms and conditions hereinafter provided;
and
WHEREAS, pursuant to Section 3.07 of the Asset Purchase Agreement,
Aggreko and Tower Tech have agreed to execute and deliver this Agreement on the
closing date contemplated by the Asset Purchase Agreement; and the mutual
execution and delivery of this Agreement is a condition precedent to the
obligations of Aggreko and Tower Tech to consummate the transactions
contemplated by the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the above premises, the mutual
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:
ARTICLE ONE
DEFINITIONS
1.1 Certain Definitions. The terms specified in this Section 1.1 shall,
for all purposes of this Agreement, have the meanings herein specified, unless
the context expressly or by necessary implication otherwise requires.
<PAGE>
"Affiliate" shall mean, with respect to any Person, any other Person
that, directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person.
"Cooling Tower", and collectively, "Cooling Towers," shall mean any and
all cooling towers models manufactured by or on behalf of Tower Tech, including,
without limitation those models described on Exhibit A as may be amended from
time to time by adding or deleting cooling towers, and in or to which Tower Tech
owns or holds Proprietary Rights, but specifically excluding all concrete
cooling towers.
"Cooling Tower Patent", and collectively, "Cooling Tower Patents",
shall mean any and all Patents specifically related to the Cooling Towers which
are owned or held by Tower Tech at any time during the Term.
"Cost," and collectively "Costs," shall mean any and all reasonable and
necessary expenses and other costs incurred or sustained regarding the subject
matter, including without limitation attorney fees, court costs, accountant or
bookkeeping fees, broker fees, filing, certificate, license or permit fees,
fabrication, shipping, handling, postage, long distance telephone, facsimile
transmission, photocopies, courier delivery, freight, travel, lodging and meals.
"Develop" or "Developed" or "Developing" or "Development" shall
collectively mean to design, plan, manufacture, assemble, produce, erect,
construct, install, or otherwise develop the Cooling Towers and any
Improvements, with or without the Licensor Technology.
"Effective Date" shall mean the date of this Agreement.
"Improvement", and collectively, Improvements, shall mean any and all
additions, alterations, modifications, design changes, and other improvements to
the Cooling Towers which are individually or jointly Developed by Tower Tech,
Aggreko, any Sublicensee or any third parties at any time during the Term, and
regardless whether Tower Tech owns or holds any Proprietary Rights therein or
thereto.
"Improvement Patent," and collectively, "Improvements Patents" shall
mean any and all Patents specifically related to the Improvements which are
owned or held by Tower Tech at any time during the Term.
"License," shall collectively mean any and all exclusive rights and
licenses which Tower Tech shall grant to Aggreko regarding the Proprietary
Rights within the License Territory pursuant to Article Two.
"License Territory," shall collectively mean anywhere in the world.
"Licensed Product," shall collectively mean (a) the Cooling Towers,
less and except any Nonproprietary Parts, (b) any Improvements, less and except
any Nonproprietary Parts, (c) the Proprietary Rights, (d) the Licensor
Technology and (e) any Materials.
<PAGE>
"Licensed Product Patent," and collectively, "Licensed Product Patents,"
shall mean any and all Cooling Tower Patents and Improvement Patents.
"Licensor Technology," shall collectively mean any and all of Tower
Tech's engineering and technical processes, techniques, know-how, data,
information, and other technology specifically used to Develop the Cooling
Towers and any Improvements.
"Material," and collectively, "Materials" shall mean any and all Technology
Materials and Promotional Materials.
"Nonproprietary Part," and collectively, "Nonproprietary Parts," shall
mean any and all parts and components of the Cooling Towers and any
Improvements, in or to which Tower Tech does not own or hold any Proprietary
Rights at any time during the Term.
"Part," and collectively, "Parts" shall mean any and all Proprietary Parts
and Nonproprietary Parts.
"Party," and collectively, "Parties," shall mean either or both Tower
Tech and Aggreko.
"Patent," and collectively, "Patents," shall mean any and all patents,
corresponding letters patent, patents pending, and associated patent rights, any
subsequent patent applications and resulting issued patents claiming priority
from or based on the original patents, and all divisions, reissues, renewals,
extensions, and substitutions of the foregoing, which the holder owns or has a
right to grant licenses under pursuant to U.S.A. or foreign law.
"Person," shall mean an individual, corporation, partnership, trust,
unincorporated organization or a government or any agency or political
subdivision thereof.
"Promotional Material," shall collectively mean any and all of Tower
Tech's papers, brochures, pamphlets, documents, advertisements, displays, video
and audio presentations, and other tangible media and materials specifically
used to promote the Licensed Product, and regardless whether Tower Tech has any
Proprietary Rights therein or thereto.
"Proprietary Part," and collectively, "Proprietary Parts," shall mean
any and all parts and components of the Cooling Towers and any Improvements, in
or to which Tower Tech owns or holds any Proprietary Rights at any time during
the Term.
"Proprietary Right," and collectively, "Proprietary Rights," shall mean
any and all Licensed Product Patents, copyrights, and other proprietary rights,
titles and interest in or to the Cooling Towers, any Improvements, the
Materials, the Trademark, the Trade Name and the CTI certification number(s)
which Tower Tech owns, holds or has a right to grant licenses under at any time
during the Term, including without limitation those certain Licensed Product
Patents more particular described on Exhibit B.
"Royalty," and collectively, "Royalties," shall mean any and all
continuing percentage royalties payable to Tower Tech pursuant to this
Agreement.
"Sublicense," and collectively, "Sublicenses," shall mean any and all
sublicenses of the License granted by Aggreko to a Sublicensee pursuant to
Article Two.
<PAGE>
"Tax," and collectively, "Taxes," shall mean any and all fees,
impositions, premiums, duties, assessments, and other taxes of any nature
incurred or sustained regarding the subject matter, including without limitation
any imposed for sales, use, income, import, export, currency, exchange,
certificates, licenses and permits.
"Technology Material," and collectively, "Technology Materials," shall
mean any and all of Tower Tech's designs, drawings, blueprints, schematics,
documents, manuals, specifications, software, and other tangible materials
regarding the Licensor Technology which are specifically used to Develop the
Cooling Towers and any Improvements, whether or not copyrighted.
"Trademark," shall collectively mean those certain logos or trademarks
of Tower Tech more particularly described or displayed on Exhibit C, and any
other trademarks, service marks, logos, or other proprietary marks regarding the
Licensed Product in or to which Tower Tech shall have any right, title or
interest at any time during the Term.
"Trade Name," shall collectively mean those certain trade names of
Tower Tech more particularly described or displayed on Exhibit D, and any other
trade names or other proprietary names regarding the Licensed Product in or to
which Tower Tech shall have any right, title or interest at any time during the
Term
1.2 Other Definitions. In addition to the terms defined in Section 1.1
hereof, certain other terms are defined elsewhere in this Agreement, and
whenever such terms are used in this Agreement, they shall have their respective
defined meanings, unless the context expressly or by necessary implication
otherwise requires.
ARTICLE TWO
LICENSE; SUBLICENSES
2.1 Grant of License. Tower Tech hereby grants to Aggreko the License,
which shall be limited solely to the following rights and license, for the Term
and within the License Territory:
(a) an exclusive, nontransferable right and license to utilize the
Proprietary Rights in connection with the business of the leasing and rental of
the Cooling Towers and any Improvements within any geographic area of the
License Territory; and
(b) an exclusive, nontransferable right and license to utilize the
Trademark and Trade Name in connection with the business of the leasing and
rental of the Cooling Towers and any Improvements within any geographic area of
the License Territory.
Notwithstanding anything contained in this Article Two to the contrary,
Aggreko acknowledges and agrees that the License granted hereunder shall be
subject to the rights of those parties designated as "Licensees" in those
certain License Agreements listed on Exhibit E attached hereto (the "Existing
License Agreements"). Tower Tech specifically agrees that hereinafter it shall
not grant any license or similar right with respect to the Proprietary Rights,
the Trademark or the Trade Name which would impair or violate the exclusive
rights and licenses granted to Aggreko hereunder. In addition, Tower Tech agrees
to promptly use its best efforts to amend, modify and/or alter the Existing
License Agreements to clarify and specifically provide that the Licensees
thereunder do not have any right or license to utilize the Proprietary Rights,
the Trademark or the Trade Name in connection with the business of the leasing
and rental of the Cooling Towers and any Improvements.
2.2. Sublicenses. Aggreko shall have no authority or right to grant any
Sublicenses of any part of the License to Sublicensees within any part of the
License Territory; provided, that, Aggreko may grant Sublicenses to any of its
Affiliates anywhere in the License Territory. Aggreko shall provide Tower Tech
with written notice of any such Sublicense within thirty (30) days after
granting any such Sublicense.
ARTICLE THREE
ROYALTIES; PERIODIC STATEMENTS
3.1 Royalties. Commencing upon the Effective Date and no later than
forty-five (45) days after the end of each calendar quarter during the Term,
Aggreko shall pay to Tower Tech Royalties in an amount equal to three percent
(3%) of the revenue received by Aggreko or its Affiliates which is directly
derived from the leasing or rental of the Cooling Towers. Tower Tech
acknowledges and agrees that it shall not be entitled to any Royalty for amounts
received by Aggreko with respect to labor performed or any ancillary equipment
or services provided by Aggreko or its Affiliates in connection with the leasing
or rental of any Cooling Tower. In addition, Tower Tech shall be entitled to a
Royalty of three (3%) of the revenue received by Aggreko or its Affiliates from
the sale of any Cooling Tower, exclusive of all taxes collected by Aggreko. Any
such Royalties shall be due and payable within forty-five (45) days after the
end of the calendar quarter in which Aggreko or any of its Affiliates receives
the sales price with respect to any sale of a Cooling Tower.
3.2 Periodic Statements. During the Term, within forty-five (45) days
after the end of every calendar quarter, Aggreko shall furnish to Tower Tech a
written statement setting forth all calculations relating to the Royalty payable
with respect to such quarter, including, without limitation, the number of
Cooling Towers sold, leased or rented and the revenue received by Aggreko or its
Affiliates during such quarter from such sales, leases and rentals.
3.3 Books and Records. Aggreko shall keep at its principal executive
offices all such proper books of account and records as may be necessary to
enable the Royalties hereunder to be accurately ascertained and shall permit
Tower Tech or its duly authorized representative to audit and investigate the
same during Aggreko's regular business hours, at Tower Tech's own expense.
3.4 Taxes On Royalties. In event that any governmental authority shall
impose any Taxes on any of the Royalties required by this Agreement, and
requests Aggreko to withhold the amount thereof from such Royalties, then
Aggreko may so deduct them. Proper receipts indicating the payment or
withholding thereof on behalf of Tower Tech shall be promptly submitted to Tower
Tech. If requested by Tower Tech, Aggreko shall fully cooperate with Tower Tech
in a determination of the legality or propriety of any such Taxes, and in
pursuing any legal remedies available to Tower Tech, with the cost thereof to be
paid by Tower Tech.
<PAGE>
ARTICLE FOUR
PROPRIETARY RIGHTS; INDEMNIFICATION
4.1 Proprietary Rights. Tower Tech represents that , to the best of its
knowledge, it is the exclusive owner or holder of the Proprietary Rights as of
the Effective Date, that it will be such as to any subsequent Licensed Product
Patents as of their issue date, and that Tower Tech has the right to grant the
License to Aggreko. At all times during the Term, the Licensed Product Patents
shall be and remain the exclusive and separate property of Tower Tech, subject
to this Agreement and the License.
4.2 Patent Applications. At all times during the Term, Tower Tech shall
have the right and option, without obligation and in its sole discretion, to
prepare, file and prosecute any application for Licensed Product Patents within
the License Territory.
4.3 Infringement. At all times during the Term, and regardless whether
either Party will or may be adversely affected thereby, each Party shall
promptly notify the other in writing of any actual, potential or alleged
infringement regarding the Proprietary Rights, the Licensed Product, or the
License within the License Territory. Tower Tech shall have the first right and
option, without obligation and in its sole discretion, to take such appropriate
action as Tower Tech deems necessary regarding the infringement. If Tower Tech
shall fail or refuse to do so, then Aggreko shall have the second right and
option, without obligation and in its sole discretion, to take such appropriate
action as Aggreko deems necessary regarding the infringement. If any legal
proceedings are commenced by either or both Parties against a third party
alleging infringement of the Proprietary Rights, the Licensed Product, or the
License within the License Territory, then if Tower Tech shall have exercised
its aforesaid first option, any settlements, judgments, or Costs awarded to
either Party, including any ongoing payments of royalties or fees by the
infringer, shall be allocated and paid, first, to the Costs associated with the
legal proceedings and second, to the Party prosecuting the proceeding. If
Aggreko shall have exercised its aforesaid second option, all of the foregoing
shall be paid to Aggreko and all such Costs shall be paid by Aggreko.
<PAGE>
If any legal proceedings are commenced against either or both Parties
or the Licensed Product by a third party alleging infringement by the
Proprietary Rights, the Licensed Product, or the License of the rights or
property of such third party within the License Territory, then in the event
Aggreko receives written notice of any such legal proceedings Aggreko shall
promptly notify Tower Tech thereof (the "Infringement Notice"). Thereupon, Tower
Tech shall promptly take such action as may be necessary to protect and defend
Aggreko against any such claim by any third party and shall indemnify and hold
Aggreko harmless against any loss or Costs incurred by Aggreko in connection
therewith. If Tower Tech notifies Aggreko within ten (10) days of its receipt of
the Infringement Notice (the "Response Period") of its agreement to assume
responsibility for such legal proceeding and to indemnify and hold Aggreko
harmless against any loss or Costs incurred by Aggreko in connection therewith
and diligently pursues its obligations in this regard, then Aggreko shall have
no power or authority to settle or compromise any such claim by a third party.
Tower Tech shall have the right after considering the best interests of Aggreko
and diligently consulting with Aggreko thereon to defend, compromise or settle
any such claims at the sole cost and expense of Tower Tech, using attorneys of
its own choosing, and bearing always in mind Aggreko's best interest. Aggreko
agrees to cooperate at Tower Tech's sole cost and expense with Tower Tech in
connection with the defense or settlement of any such claim.
If, with respect to such third party claim, Tower Tech does not
acknowledge in writing as provided above within the Response Period or Tower
Tech disclaims in writing to Aggreko Tower Tech's obligation to indemnify
Aggreko pursuant hereto, Aggreko may defend against such claim or related legal
proceeding with such counsel and in such manner as it deems appropriate, and may
consent to the settlement or compromise or, consent to the entry of a judgement
arising from, such claim or legal proceeding without the consent of Tower Tech.
Aggreko shall have the right to discontinue the payment of Royalties to Tower
Tech during the period commencing upon the termination of the Response Period
and ending upon the termination of such proceedings, whether by settlement or
otherwise. In addition, upon the termination of such legal proceedings, whether
by settlement or otherwise, Aggreko shall be entitled to discontinue the payment
of Royalties to Tower Tech until such time as Aggreko shall have been reimbursed
for the Costs associated with such legal proceedings.
In every case, (a) the Party taking action shall do so in the name of
the real party in interest as determined by applicable law, (b) each Party shall
provide the other, its nominees and attorneys, with all available information
and documents regarding the infringement, and (c) the Parties shall fully
cooperate with each other and, if necessary, provide testimony or other evidence
in any legal proceedings.
4.4 Improvements. All Improvements Developed during the Term shall
become the separate and individual property of the Party or Parties Developing
them, and such Party or Parties shall own, hold or have the sole right to
acquire all Proprietary Rights therein or thereto. Immediately upon Development
by Tower Tech and issuance thereof, all Improvements and Improvements Patents
thereon shall automatically be deemed licensed to Aggreko during the Term.
4.5 Trademark and Trade Name. In any and all use of any Trademark and
any Trade Name for any promotion of the Licensed Product or otherwise, Aggreko
shall (a) acknowledge and recognize the Proprietary Rights therein or thereto,
and not do or permit any act or thing which will or may contest, impair or
otherwise adversely affect the same, (b) clearly disclose and indicate such
Proprietary Rights to all customers and other third parties, and not to in any
manner represent that Aggreko has any ownership or other interest in or to any
Trademark or any Trade Name, other than pursuant to this Agreement.
ARTICLE FIVE
TERM OF AGREEMENT
Subject to the terms of this Article Five, the Term shall be the ten
(10) year period commencing on the Effective Date. In the event either Party
fails to comply with any of the terms and conditions of this Agreement, the
non-breaching Party may give the breaching Party thirty (30) days' written
notice specifying the breach, and if such breach fails to be cured within such
period, the non-breaching Party may immediately terminate this Agreement
ARTICLE SIX
ARBITRATION
THE PARTIES SHALL USE THEIR RESPECTIVE BEST EFFORTS TO SETTLE AMICABLY
ANY DISPUTES, DIFFERENCES OR CONTROVERSIES ARISING BETWEEN THE PARTIES OUT OF OR
IN CONNECTION WITH OR IN RESPECT OF THIS AGREEMENT. HOWEVER, IF NOT SO SETTLED
THEN THE SAME SHALL BE SUBMITTED TO ARBITRATION AND TO THE FULLEST EXTENT
PERMITTED BY LAW, BE SOLELY AND FINALLY SETTLED BY ARBITRATION. THE ARBITRATION
PROCEEDING SHALL BE HELD IN DALLAS, TEXAS, AND SHALL BE CONDUCTED IN ACCORDANCE
WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION
AND TO THE EXTENT NOT INCONSISTENT THEREWITH, THE TEXAS GENERAL ARBITRATION ACT,
TITLE 10, VERNON'S ANN.CIV.STAT. JUDGEMENT UPON THE AWARD RENDERED BY THE
ARBITRATORS MAY BE ENTERED IN ANY COURT HAVING JURISDICTION, OR APPLICATION MAY
BE MADE TO SUCH COURT FOR A JUDICIAL ACCEPTANCE OF THE AWARD AND ANY ORDER OF
ENFORCEMENT AS THE CASE MAY BE.
ARTICLE SEVEN
MISCELLANEOUS
7.1 Notices. All notices, requests and other communications under this
Agreement shall be in writing (including a writing delivered by facsimile
transmission) and shall be deemed to have been duly given if delivered
personally, or sent by either certified or registered mail, return receipt
requested, postage prepaid, by overnight courier guaranteeing next day delivery,
or by facsimile, addressed as follows:
a) If to Tower Tech :
Tower Tech, Inc.
11935 South I-44 Service Rd.
P.O. 1838
Oklahoma City, OK 73173
Attn: Harold D. Curtis, Chief Executive Officer
Facsimile No.: (405) 979-2131
or at such other address or facsimile number as Tower Tech may have advised
Aggreko in writing; and
(b) If to Aggreko:
Aggreko Inc.
4607 W. Admiral Doyle Drive
New Iberia, LA 70560
Attn: Terry Dressel, Chief Financial Officer
Facsimile No.: (318) 367-0870
or at such other address or facsimile number as Aggreko may have advised Tower
Tech in writing.
All such notices, requests and other communications shall be deemed to have been
received on the date of delivery thereof, if delivered by hand, on the third day
after the mailing thereof, if mailed, on the next day after the sending thereof,
if by overnight courier, and when receipt is acknowledged, if faxed.
7.2. Waivers and Amendments. No amendment or waiver of any provision of
this Agreement, nor consent to any departure therefrom, shall be effective
unless the same be in writing and signed by each party hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law.
7.3. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and there respective successors and
permitted assigns.
7.4 Assignment.
<PAGE>
Neither party shall have any right to transfer or assign its interest
or rights in this Agreement or delegate its obligations under this Agreement
without the prior written consent of the other party hereto.
7.5 Change in Control. In the event of the occurrence of a Change in
Control (as hereinafter defined) with respect to Tower Tech, Aggreko shall have
the right, in its sole discretion, to either (i) terminate this Agreement upon
providing Tower Tech with at least thirty (30) days written notice of Aggreko's
intention to terminate this Agreement, or (ii) continue the performance of this
Agreement; provided, that, the surviving or resulting entity or entities
involved in any such Change in Control transaction shall specifically assume, as
a co-obligor with Tower Tech and as a condition to the effectiveness of any such
Change in Control transaction, the obligations of Tower Tech hereunder.
For purposes of this Agreement, a Change in Control shall be deemed to
have occurred if (i) a majority of the voting capital stock in Tower Tech is
acquired by a third party or third parties, other than those persons holding
shares of Tower Tech's capital stock on the date of this Agreement, or their
respective affiliates, (ii) Tower Tech enters into a merger or consolidation
with another corporation or business entity in which Tower Tech is not the
surviving entity, (iii) Tower Tech becomes a majority-owned subsidiary of
another corporation, (iv) a change during any period of two consecutive years of
a majority of the members of the Board of Directors of Tower Tech for any
reason, unless the election, or the nomination for election by Tower Tech's
stockholders, of each director was approved by a majority vote of the directors
then still in office who were directors at the beginning of such period, or (v)
more than forty percent (40%) of the assets of Tower Tech are transferred or
sold.
7.6 GOVERNING LAW. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICT OF LAWS.
7.7 Number and Gender. Whenever herein the singular number is used, the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.
7.8 Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
7.9 Entirety. This Agreement contains the agreement and understanding
among the Parties with respect to the matters addressed herein and supersedes
all prior representations, inducements, promises or agreements, oral or
otherwise, which are not embodied herein.
7.10 Third Party Beneficiaries. Nothing contained herein, express or
implied, is intended to confer upon any person or entity other than the Parties
hereto and their successors in interest and permitted assigns any rights or
remedies under or by reason of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
AGGREKO: AGGREKO INC.
By:ss/GEORGE P. WALKER
-------------------------------
Printed Name: George P. Walker
Title: Executive Vice President
By: ss/TERREL P. DRESSEL, JR.
----------------------------------
Printed Name: Terrel P. Dressel, Jr.
Title: Vice President Finance
TOWER TECH: TOWER TECH, INC.
By:ss/HAROLD D. CURTIS
------------------------------
Printed Name: Harold D. Curtis
Title: Chief Executive Officer
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is made and entered
into as of the 4th day of December, 1998, by and among AGGREKO INC., a Louisiana
corporation ("Purchaser"),TOWER TECH, INC., an Oklahoma corporation ("Seller")
and HAROLD D. CURTIS, a resident of Cleveland County, Oklahoma ("Curtis").
WITNESSETH:
WHEREAS, Seller is currently engaged in the business of, among other
things, leasing and renting industrial modular cooling towers (the "Business");
WHEREAS, pursuant to that certain Asset Purchase Agreement (herein so
called) dated as of December 4, 1998, by and between Purchaser and Seller,
Seller has agreed to, among other things, sell to Purchaser and Purchaser has
agreed to, among other things, purchase from Seller, the Acquired Assets (as
such term is defined in the Asset Purchase Agreement) in order to acquire the
Business from Seller;
WHEREAS, Curtis owns a significant amount of the issued and outstanding
capital stock of Seller and will therefore, directly or indirectly, benefit and
receive substantial consideration from the sale of the Acquired Assets to
Purchaser;
WHEREAS, pursuant to the Asset Purchase Agreement, Seller and Curtis
have agreed to execute and deliver this Agreement as a condition to the purchase
by Purchaser of the Acquired Assets; and
WHEREAS, Purchaser desires to protect the value of the Acquired Assets
and the Business by obtaining from Seller and Curtis this Agreement to (i)
maintain the confidentiality of certain information concerning the Acquired
Assets and the Business, including, without limitation, trade secrets and other
confidential and/or proprietary information, and (ii) refrain from competing
with the Business and Purchaser for a reasonable period of time in the
Restricted Area (as defined in Section 2 below).
NOW, THEREFORE, in consideration of the foregoing premises and of the
respective representations and warranties hereinafter set forth, of the
covenants and agreements contained herein and in the Asset Purchase Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
<PAGE>
1. Disclosure of Information. Seller and Curtis agree that for a period
of five (5) years from the date hereof (the "Term"), neither of them nor any of
their respective Affiliates (as defined in Section 15 below) shall, without the
prior written consent of the Board of Directors of Purchaser, directly or
indirectly, reveal, divulge, disclose or otherwise communicate to any person,
firm, association, corporation or other entity in any manner whatsoever, or
otherwise make use of, confidential, proprietary or trade secret information of
any kind, nature or description concerning any matters affecting or relating to
Purchaser or the Business, including, without limitation: (a) the names of any
of the prior, present or prospective clients, customers or accounts of the
Business, (b) the prices for which the Business obtains or has obtained, or at
which it sells or has sold, or at which it leases or rents or has leased or
rented, the properties or services of the Business, (c) the names of the
personnel involved in the Business, (d) the financial affairs of the Business,
(e) the method of operating the Business, (f) the method of marketing, and
determining markets for, the Business, or (g) the processes, techniques,
methods, know-how, designs, design improvements, plans, trade secrets or other
data of any kind, nature or description whatsoever relating primarily to the
Business. Without regard to whether any or all of the foregoing matters would be
deemed confidential, material or important, the parties hereto stipulate that as
between them, the same are confidential, material and important and gravely
affect Purchaser's effective and successful conduct of the Business and its
goodwill. Notwithstanding anything contained in this paragraph to the contrary,
neither Seller nor Curtis nor any of their respective Affiliates shall be
prohibited from disclosing any information regarding the Business if such
information is required to be included in any filing with the Securities and
Exchange Commission, including financial statements included therewith, or is
ordered to be made available by any court of competent jurisdiction or any
governmental authority; provided, however, that Seller or Curtis shall provide
Purchaser with written notice of such court order or order by a governmental
authority prior to disclosing such information.
Notwithstanding the foregoing paragraph, neither the Seller nor Curtis
shall be liable pursuant to this Section 1 for disclosures as to (i) information
that is or becomes generally available to the public other than as a result of a
disclosure by Seller or Curtis, or (ii) information which is received from a
third party; provided, that, such source is not known by Seller or Curtis to be
bound by a confidentiality agreement, or other obligation of secrecy, to
Purchaser.
2. Covenant Not to Compete. Seller and Curtis agree that for the Term
of this Agreement, without the prior written consent of the Board of Directors
of Purchaser, neither of them nor any of their respective Affiliates shall,
directly or indirectly, through any corporation, organization or other entity
owned or controlled by Seller or Curtis, or as stockholder or holder of any
equity security (except for an equity interest in a public company that does not
exceed five percent (5%) of its total outstanding voting stock), partner or in
any other capacity whatsoever:
(a) call upon, solicit, divert, take away or attempt to call
upon, solicit, divert or take away any existing, clients, customers,
suppliers, businesses or accounts or potential clients, customers,
suppliers, businesses or accounts of the Business or any portion
thereof, or of Purchaser or any of its Affiliates in connection with
any business competitive with the Business or any portion thereof in
the Restrictive Area (as hereinafter defined) nor interfere or compete
with Purchaser or any of its Affiliates, or any portion of the Business
in connection with such clients, customers, suppliers, businesses and
accounts in the Restricted Area;
(b) hire, knowingly attempt to hire, contact or solicit with
respect to hiring any of those employees listed on Schedule A attached
hereto;
<PAGE>
(c) engage in, or give any advice to any Person engaged in,
any business competitive in any respect with the Business or any
portion thereof in the Restricted Area;
(d) lend credit, money or reputation for the purpose of
establishing or operating any business competitive with the Business or
any portion thereof in the Restricted Area; or
(e) participate in the ownership, management, operation or
control of any Person that is engaged in any business competitive with
the Business or any portion thereof in the Restricted Area.
The foregoing covenants are intended to restrict Seller, Curtis and
their respective Affiliates from competing in any manner with Purchaser or any
of its Affiliates in any business similar to the Business or any portion thereof
in the activities which have heretofore been carried on in connection with the
Business or any portion thereof. The parties hereto hereby agree that the
prohibitions set forth in this Section 2 shall be liberally interpreted so as to
carry out the intents and purposes of this Agreement.
If, during any period within the Term, Seller or Curtis is not in
compliance with the terms of this Section 2, the Purchaser shall be entitled to,
among other remedies, require compliance by Seller and Curtis with the terms of
this Section 2 for an additional period equal to the period of such
noncompliance. The term "Term" shall also include this additional period. Seller
and Curtis hereby acknowledge that the geographic boundaries, scope of
prohibited activities and the time duration of the provisions of this Section 2
are reasonable and are not broader than are necessary to maintain the goodwill
associated with the Business and to protect other legitimate business interests
of the Purchaser and its Affiliates.
For purposes of this Agreement, the term "Restricted Area" shall mean:
(i) anywhere in North America (including, without limitation,
the United States, Canada, Mexico, Puerto Rico and the U.S. Virgin
Islands), Central America, South America, Africa, Europe (including,
without limitation, Russia and the former Soviet states), Asia
(including, without limitation, China, Japan and India), Australia, New
Zealand and every province, district, state or territory of the
foregoing countries, in which the Business is currently conducted;
(ii) to the extent not the referred to in the foregoing,
anywhere in North America (including, without limitation, the United
States, Canada, Mexico, Puerto Rico and the U.S. Virgin Islands),
Central America, South America, Africa, Europe (including, without
limitation, Russia and the former Soviet states), Asia (including,
without limitation, China, Japan and India), Australia, New Zealand and
every province, district, state or territory of the foregoing
countries, in which Seller has or had operations in connection with the
Business; and
<PAGE>
(iii) to the extent not referred to in the foregoing, anywhere
in North America (including, without limitation, the United States,
Canada, Mexico, Puerto Rico and the U.S. Virgin Islands), Central
America, South America, Africa, Europe (including, without limitation,
Russia and the former Soviet states), Asia (including, without
limitation, China, Japan and India), Australia, New Zealand and every
province, district, state or territory of the foregoing countries.
(Seller hereby acknowledges that the Business as currently conducted
directly affects regional markets and as a consequence, extends beyond
the regions in which the Business directly operates).
3. Noncompetitive Activities. Notwithstanding anything to the contrary
contained in Section 1 or Section 2 hereof, the parties hereto understand and
agree that neither Seller's nor any of its Affiliate's involvement in the
following activities shall be deemed to be competition prohibited by Section 2
hereof:
(i) designing, engineering, manufacturing, marketing, selling or
servicing industrial modular cooling towers for non-rental or
non-leasing applications; and
(ii) utilizing a capital lease to finance the sale of an industrial
modular cooling tower for a non-rental application.
4. Enforcement of Covenants. Seller and Curtis acknowledge that a
violation or attempted violation, on its part or on the part of any of its
Affiliates, of any agreement in Sections 1 and 2 above will cause such damage to
Purchaser as will be irreparable and that the remedy at law will be inadequate.
Accordingly, Seller and Curtis agree that the Purchaser shall be entitled as a
matter of right to an injunction, without posting of a bond or any other
security, from any court of competent jurisdiction, restraining any further
violation of such agreements by Seller, Curtis or their respective Affiliates.
Any exercise by the Purchaser of its rights pursuant to this Section 4 shall be
cumulative and in addition to any other remedies to which Purchaser may be
entitled.
5. Reformation of Sections 1 and 2. Purchaser, Seller and Curtis agree
and stipulate that the agreements and covenants contained in Sections 1 and 2
hereof are fair and reasonable in light of all of the facts and circumstances of
the relationship between Purchaser and Seller and Curtis. However, the parties
are aware that in certain circumstances courts have refused to enforce certain
agreements not to compete. Therefore, in furtherance of, and not in derogation
of the provisions of Sections 1 and 2, Purchaser, Seller and Curtis agree that
in the event a court should decline to enforce the provisions of Sections 1 and
2, that Sections 1 and 2 shall be deemed to be modified or reformed to restrict
Seller's or Curtis' competition with Purchaser or its Affiliates to the maximum
extent, as to time, geography and business scope, which the court shall find
enforceable; provided, however, in no event shall the provisions of Section 1
and 2 be deemed to be more restrictive to Seller and Curtis than those contained
herein.
<PAGE>
6. Indemnification. From and after the date hereof, Seller and Curtis,
jointly and severally, shall indemnify, defend and hold the Purchaser harmless
from and against any and all claims, losses, damages, costs and expenses that
may be incurred by, imposed upon or asserted by or against Purchaser arising
from any breach of any provisions of this Agreement by Seller or Curtis if
Seller and/or Curtis is held to be in violation of this Agreement by a court of
competent jurisdiction.
7. Survival. Without affecting the time limitations set forth in
Section 1 and Section 2 hereof, the respective representations, warranties and
agreements of the parties hereto set forth herein shall survive consummation of
any transactions contemplated by the Asset Purchase Agreement.
8. Invalid Provisions. If any provision hereof (other than Sections 1
and 2) is held to be illegal, invalid or unenforceable under present or future
laws effective during the Term hereof, such provisions shall be fully severable;
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof; and the remaining
provisions hereof 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 hereof a provision as
similar in the terms, but in any event no more restrictive than, such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.
9. Waivers and Amendments. No amendment or waiver of any provision of
this Agreement, nor consent to any departure therefrom, shall be effective
unless the same be in writing and signed by of each party hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law.
10. Number and Gender. Whenever herein the singular number is used, the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.
11. Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way limit or amplify the
terms and provisions hereof.
12. Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICT OF LAWS.
13. Jurisdiction and Venue. Any judicial proceeding brought by or
against any of the parties to this Agreement on any dispute arising out of this
Agreement shall be brought in the state or federal courts of Dallas County,
Texas, and by execution and delivery of this Agreement, each of the parties
hereto accepts individually the exclusive jurisdiction and venue of the
aforesaid courts.
<PAGE>
14. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
heirs, successors and assigns. No party hereto shall assign any of its rights
hereunder or any interest herein without the prior written consent of the other
parties hereto.
15. Third Party Beneficiaries. Nothing contained herein, express or
implied, is intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assigns any rights or
remedies under or by reason of this Agreement.
16. Use of Certain Terms.
(a) As used in this Agreement, the term "Affiliate" shall mean
any Person that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such Person at any time on or after the date hereof,
including, without limitation, the officers and directors of any such
Person. For purposes of this definition, "control" shall mean the
power, directly or indirectly, to (i) vote ten percent (10%) or more of
the securities having ordinary voting power for the election of
directors of such Person, or (ii) direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
(b) As used in this Agreement, the term "Person" shall mean
any corporation, partnership, joint venture, trust, sole
proprietorship, individual or person or entity.
(c) As used in this Agreement, the words "herein," "hereby,"
"hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular section, subsection
or other subdivision.
17. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed collectively to be one agreement, but in making proof
hereof it shall only be necessary to exhibit one such counterpart.
18. Entirety. This Agreement contains the agreement and understanding
among the parties with respect to the matters addressed herein and supersedes
all prior representations, inducements, promises or agreements, oral or
otherwise, which are not embodied herein.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PURCHASER: AGGREKO INC.
By:ss/GEORGE P. WALKER
--------------------------------
Printed Name: George P. Walker
Title: Executive Vice President
By: ss/TERREL P. DRESSEL, JR.
------------------------------------
Printed Name: Terrel P. Dressel, Jr.
Title: Vice President Finance
SELLER: TOWER TECH, INC.
By: ss/HAROLD D. CURTIS
--------------------------------
Printed Name: Harold D. Curtis
Title: Chief Executive Officer
CURTIS: ss/HAROLD D. CURTIS
--------------------------------
Harold D. Curtis, Individually
<PAGE>
SCHEDULE A
LIST OF EMPLOYEES
Name Address Social Security
Billy W. Childers 2909 Carolina, Chickasha, OK 73018 ###-##-####
Jamie Boyd Curtis 2116 S. 13th St., Chickasha,OK 783018 ###-##-####
Kristi M. Solis P.O. Box 492, Chickasha, OK 73023 ###-##-####
Scott F. McMillan 1905 S. 14th St., Chickasha OK 73018 ###-##-####
David "Craig" Webb 212 W. Cherokee #3, Marlow, OK 73099 ###-##-####
PROMISSORY NOTE
U.S. $1,350,000.00 DALLAS, TEXAS December 4, 1998
FOR VALUE RECEIVED, the undersigned, AGGREKO INC., a Louisiana
corporation ("Maker"), unconditionally promises to pay to the order of TOWER
TECH, INC., an Oklahoma corporation ("Holder"), the principal sum of One Million
Three Hundred and Fifty Thousand Dollars ($1,350,000.00), in lawful money of the
United States and in immediately available funds, together with accrued but
unpaid interest, on the outstanding principal balance, in like money and funds,
at the rate per annum and on the dates provided below (provided that the
interest payable shall not exceed the Maximum Rate (as hereinafter defined)).
1. Asset Purchase Agreement. This Note has been executed and delivered
pursuant to that certain Asset Purchase Agreement dated as of December 4, 1998
by and between Maker and Holder (the "Agreement"), pursuant to which Holder has
sold to Maker the Acquired Assets. The capitalized terms used in this Note which
are not defined herein shall have the meanings ascribed to such terms in the
Agreement.
2. Interest. The unpaid principal balance of the outstanding balance
hereunder shall bear interest at the lesser of (i) the prime rate announced from
time to time by Citibank, N.A. (New York, N.Y. office), plus one percent (1%)
per annum, and (ii) the maximum rate per annum permitted by applicable law (the
"Maximum Rate"). All past-due principal under this Note shall bear interest at
the lesser of (i) eighteen percent (18%) per annum, and (ii) the Maximum Rate.
Interest paid or agreed to be paid shall not exceed the maximum amount
permissible under the applicable laws of the United States or the State of Texas
and, in any contingency whatsoever, if Holder shall receive anything of value
deemed interest under such laws which would exceed the amount of interest
permissible under those laws, the excessive interest shall be applied first to
the reduction of unpaid principal outstanding under this Note and the remainder
of such excessive interest shall then be refunded to Maker if such excessive
interest exceeds unpaid principal. All interest paid or agreed to be paid under
this Note shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal so that the interest hereon for such full period shall not
exceed the Maximum Rate. Interest shall be computed on the per annum basis of a
year of 360 days and for the actual number of days (including the first but
excluding the last day) elapsed.
3. Payment of Principal and Interest. The outstanding principal balance
of this Note, together with accrued interest thereon, shall be due and payable
on December 4, 1999.
4. Prepayment. This Note may be prepaid at any time, in whole or in
part, without premium or penalty, at the option of Maker.
<PAGE>
5. Transfer. Holder may not sell, transfer, pledge, hypothecate or
otherwise dispose of this Note or any interest herein without the prior written
approval of Maker, which may be granted or denied by Maker in its sole
discretion.
6. Events of Default. For purposes of this Note, an "Event of Default"
shall mean:
(a) Failure by Maker to pay any principal or interest on this
Note, or any renewal, extension, modification or rearrangement hereof,
when due or declared due; or
(b) Filing by Maker of a voluntary petition or any answer
seeking reorganization, arrangement, readjustment of its debts or for
any other relief under any applicable bankruptcy act or law, or under
any other insolvency act or consenting to, approving of or acquiescing
in any such petition or proceeding; the application by Maker for, or
the appointment by consent or acquiescence of, a receiver or trustee
for Maker or for all or a substantial part of the assets of Maker; the
making by Maker of an assignment for the benefit of creditors; or the
inability of Maker or admission by Maker, in writing, of its inability
to pay its debts as they mature (the term "acquiescence" as used in
this Section 6(b) shall mean the failure to file a petition or motion
in opposition to such petition or proceeding or to vacate or discharge
any order, judgment or decree providing for such appointment within
sixty (60) days after the appointment of a receiver or trustee); or
(c) Filing of an involuntary petition against Maker in
bankruptcy seeking reorganization, arrangement, readjustment of its
debts or for any other relief under any applicable bankruptcy act or
law, or under any other insolvency act or law, now or hereafter
existing, and such petition remains undismissed or unanswered for a
period of sixty (60) days from such filing; or the involuntary
appointment of a receiver or trustee for Maker or for all or a
substantial part of the assets of Maker, and such appointment remains
unvacated for a period of sixty (60) days or unopposed for a period of
ten (10) days from such appointment; or the issuance of a warrant of
attachment, execution or similar process against any substantial part
of the assets of Maker and such warrant remains unbonded or undismissed
for a period of fifteen (15) days from notice to Maker of its issuance.
7. Acceleration. Upon the occurrence of any Event of Default set forth
in Section 6, Holder may (but only if Maker has not cured such Event of Default
to Holder's reasonable satisfaction within fifteen (15) days after written
notice of such Event of Default is sent by Holder to Maker), in Holder's sole
and absolute discretion and upon Maker's receipt of written notice to such
effect, declare the principal of and interest accrued but unpaid under this
Note, if any, to be forthwith due and payable, whereupon the same shall become
due and payable without any presentment, acceleration, demand, protest, notice
of protest, notice of intent to accelerate, notice of acceleration or notice of
any kind, all of which are hereby waived.
8. Surrender. Upon payment in full of the principal amount, this Note
shall be surrendered by Holder to Maker for cancellation.
<PAGE>
-4-
9. Right of Offset. As provided in Article X of the Agreement, Maker
shall have the right to withhold payment and to offset against any amount due
hereunder the amount of any indemnification obligation of Holder. Should Maker
elect to exercise such right of offset, payment of principal of, or interest on,
this Note, shall immediately be reduced by the amount so offset and the amount
of interest due hereunder shall be reduced by the amount of interest that has
accrued on the amount of any principal so offset from the date Maker shall
notify Holder of such indemnification obligation. The exercise of this right of
offset shall be deemed a payment of principal of, or interest on, this Note, in
the amount of the offset, and in no event shall the exercise of this right of
offset ever be deemed nonpayment of principal of, or interest on, this Note.
10. Notices. Unless otherwise provided herein, all notices, requests,
consents and demands shall be in writing and shall be delivered to the following
addresses:
If intended for Holder, to:
Tower Tech, Inc.
11935 South I-44 Service Road
P.O. Box 1838
Oklahoma City, OK 73173
Attn: Harold D. Curtis, Chief Executive Officer
If intended to Maker, to:
Aggreko Inc.
4607 W. Admiral Doyle Drive
New Iberia, LA 70580
Attn: Terry Dressel,Vice President Finance
or to such other person or address as either party shall designate to the other
from time to time in writing forwarded in like manner. All such notices,
requests, consents and demands shall be in writing and deemed to have been given
or made when (i) delivered personally; (ii) sent by first-class U.S. mail,
postage prepaid; or (iii) sent by overnight courier, guaranteeing two-day
delivery.
11. Waiver. No waiver or consent by Holder with respect to any act or
omission of Maker on one occasion shall constitute a waiver or consent with
respect to any other act or omission by Maker on the same or any other occasion,
and no failure on the part of Holder to exercise and no delay in exercising any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by Holder of any right hereunder preclude any other further
right of exercise thereof or the exercise of any other right.
12. Parties in Interest. All covenants and agreements contained in this
Note shall bind and inure to the benefit of the respective legal
representatives, heirs, successors and assigns of the parties hereto, except
that neither Holder nor Maker may assign its rights hereunder without the prior
written consent of the other party.
<PAGE>
13. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF TEXAS, WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
14. Jurisdiction and Venue. Any jurisdictional proceeding brought by or
against any of the parties to this Note, on any dispute arising out of this Note
or any matter related hereto shall be brought in the courts of Dallas County,
State of Texas, and, by execution and delivery of this Note, each of the parties
to this Note accepts for itself the exclusive jurisdiction and venue of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Note after exhaustion of all appeals (or by the
appropriate appellate court if such appellate court renders judgment).
15. Severability. If any provision of this Note is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Note, such provision shall be fully severable; this Note shall be
construed and enforced as if such illegal, invalid and unenforceable provision
had never comprised a part hereof and this Note shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this Note.
16. Modification. No modification or waiver of any provision of this
Note shall be effective unless such modification or waiver shall be in writing
and executed by both Holder and Maker.
17. No Demand, Presentment. Except as provided in Section 7 hereof, the
undersigned and all parties now or hereafter liable for the payment hereof,
whether as endorser, guarantor, surety or otherwise, severally waive demand,
presentment for payment, notice of dishonor, notice of intention to demand or
accelerate payment hereof, protest and notice of protest and diligence on
collecting or bringing suit against any party hereof, and agree to all
extensions, renewals, indulgences, releases or changes which from time to time
may be granted by Holder and to all partial payments hereon, with or without
notice, before or after maturity.
18. Attorneys' Fees. If this Note is placed in the hands of an attorney
for collection, or if it is collected through bankruptcy or other judicial
proceedings, Maker agrees to pay all expenses of collection, including, but not
limited to, attorneys' fees, incurred by the Holder.
<PAGE>
IN WITNESS WHEREOF, Maker has caused this Note to be executed in its
corporate name by a duly authorized representative as of the date first set
forth above.
MAKER: AGGREKO INC.
By: ss/GEORGE P. WALKER
----------------------------
Printed Name: George P. Walker
Title: Executive Vice President
By:ss/TERREL P. DRESSEL, JR.
-----------------------------------
Printed Name: Terrel P. Dressel, Jr.
Title: Vice President Finance
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") is made and entered into as of
the 4th day of December, 1998 by and between AGGREKO INC., a Louisiana
corporation ("Aggreko") and TOWER TECH, INC., an Oklahoma corporation ("Tower
Tech").
WITNESSETH:
WHEREAS, pursuant to that certain Asset Purchase Agreement (herein so
called), dated as of December 4, 1998 by and between Aggreko and Tower Tech,
Tower Tech has agreed to sell to Aggreko and Aggreko has agreed to purchase from
Tower Tech, the Acquired Assets (as such term is defined in the Asset Purchase
Agreement);
WHEREAS, Aggreko and Tower Tech are executing this Agreement to set
forth the terms under which after the closing of the Asset Purchase Agreement
Tower Tech will sell to Aggreko, and Aggreko will purchase from Tower Tech,
certain products then constituting Tower Tech's industrial modular cooling tower
line, which product line is currently described on Exhibit A attached hereto
(collectively, as modified in the future, the "Modular Cooling Tower Line"), in
accordance with the terms, conditions and provisions set forth in this
Agreement; and
WHEREAS, pursuant to Section 3.08 of the Asset Purchase Agreement,
Aggreko and Tower Tech have agreed to execute and deliver this Agreement on the
same date the closing of the sale of the Acquired Assets as contemplated by the
Asset Purchase Agreement is to occur; and the mutual execution and delivery of
this Agreement is a condition precedent to the obligations of Aggreko and Tower
Tech to consummate the purchase and sale of the Acquired Assets as contemplated
by the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the above premises, the mutual
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Sale and Purchase. Subject to the terms and conditions of this
Agreement, during the Term hereof (as such term is defined in Section 6 hereof),
Tower Tech will supply and sell to Aggreko, and Aggreko will purchase from Tower
Tech, units, or replacement parts currently or hereinafter offered for such
units, of the Modular Cooling Tower Line. Aggreko shall not be committed to
purchase any goods or services except in such quantity and at such price as may
be set forth in a Purchase Order Form (as hereinafter defined).To the extent
that Tower Tech is able to produce industrial modular cooling towers which meet
Aggreko's specifications and are available in the quantities and in the time
frames required by Aggreko, Aggreko will purchase all of its requirements for
such products from Tower Tech.
<PAGE>
(a) Purchase/Release Order: Acceptance. Aggreko shall deliver binding
purchase orders in substantially the form of Aggreko's standard form of purchase
order attached hereto as Exhibit B, (collectively with any successor forms, the
"Purchaser Order Forms") for Modular Cooling Tower units, subject to such
changes as may be mutually agreed to by the parties. Notwithstanding anything
contained in this Agreement to the contrary, in the event that there is any
inconsistency between this Agreement and any Purchase Order Form, the terms set
forth in this Agreement shall be applied.
Such Purchase Order Forms shall also indicate the date Aggreko desires
to receive shipment of the Modular Cooling Tower Line units in such orders.
Within a reasonable time after Tower Tech's receipt of each particular Purchase
Order Form, but not to exceed fourteen (14) days after receipt thereof, Tower
Tech will acknowledge in writing its receipt of such Purchase Order Form and
provide Aggreko with the estimated shipment date (the "Order Verification").
(b) Filling Orders. Tower Tech shall make reasonable efforts to fill
any and all Purchase Order Forms for units of the Modular Cooling Tower Line
received from Aggreko. If non-routine engineering or special order materials are
required for any Purchase Order Form, the purchase price shall be that which is
consistent with the normal pricing of Tower Tech and the estimated shipment date
shall be based upon lead times published from time to time by Tower Tech.
(c) Substitutions; Extras. No substitution of materials may be made
without Aggreko's written consent. No charges for extras will be allowed unless
such extras have been ordered in writing by Aggreko and the price agreed upon by
the parties.
2. Shipping Dates Estimated. Tower Tech shall notify Aggreko in writing
of any delay or change in a shipment time as soon as practicable after Tower
Tech becomes aware of any such delay or change in shipment time. If Tower Tech
becomes unable to ship the Modular Cooling Tower Line units ordered within
thirty (30) days of the original scheduled shipment date as reflected in the
Order Verification therefor, Tower Tech will so notify Aggreko as soon as Tower
Tech becomes aware that it will be unable to ship the Modular Cooling Tower Line
unit(s) on the scheduled shipment date, but not later than five (5) days prior
to the scheduled shipment date, and Aggreko may cancel the order for such units
at any time within ten (10) days of its receipt of written notice of such delay.
3. Shipping. The Modular Cooling Tower Line units shall be shipped by
Tower Tech to Aggreko in accordance with the shipping instructions contained in
the Purchase Order Forms for the products being shipped; provided, however, that
all such products will be shipped F.O.B., uncrated to the Tower Tech facility.
The responsibility of Tower Tech for risk of loss shall cease upon delivery to
and receipt by a common carrier, and at such time such risk of loss shall pass
to Aggreko, regardless of whether freight charges are prepaid and/or allowed.
Aggreko shall have the right to select the carrier for all shipments.
<PAGE>
4. Inspection and Testing. All material and work in progress shall be
subject to inspection and tests at all times and places and, when practicable,
during manufacture as Aggreko may reasonably direct. If any inspection or test,
whether preliminary or final, is made on Tower Tech's premises, Tower Tech shall
furnish, without additional charge, all reasonable facilities and assistance for
safe and convenient inspections and tests required by the inspectors in the
performance of their duty. All inspections and tests shall be performed in such
manner as will not unreasonably delay the work. All shipments shall be subject
to final inspection by Aggreko after receipt by Aggreko at destination. If
material supplied or work performed by Tower Tech is found to be defective,
Aggreko shall have the right to require prompt correction thereof either by
Tower Tech, at Tower Tech's risk and expense, and upon prior authorization of
Tower Tech, by Aggreko. Aggreko may back charge Tower Tech the costs of any
corrections made by Aggreko. If correction of such work is impracticable, Tower
Tech shall bear all risk after notice of rejection and shall, if so requested by
Aggreko and at Tower Tech's own expense, promptly make all necessary
replacements. If Tower Tech fails to make such replacements promptly, Aggreko
may by contract or otherwise, make the same and, charge to Tower Tech the excess
costs incurred by Aggreko in connection therewith. Final inspection and
acceptance by Aggreko shall be conclusive except for latent defects, fraud, or
such gross mistakes as amount to fraud or for any rights otherwise provided in
this Agreement.
5. Purchase Prices; Terms of Payment. The purchase prices for the
Modular Cooling Tower Line units purchased by Aggreko hereunder shall be
determined in the manner set forth on Exhibit C attached hereto. Notwithstanding
anything contained in this Agreement to the contrary, Tower Tech acknowledges
and agrees that Aggreko shall always be offered the "best price" for its
purchases of Modular Cooling Tower Line units, excluding special pricing
arrangements made with first time customers that are purchasing seven (7) or
less Modular Cooling Tower Line units. Accordingly, if Tower Tech shall sell any
product constituting part of its Modular Cooling Tower Line to any other
customer at a price which is lower for the same or a greater quantity than the
purchase price for such product then in effect hereunder (a "Preferential Third
Party Sale"), the purchase price of such product for Aggreko shall be reduced to
such lower price for (i) all comparable quantities of unshipped orders of
Aggreko, and (ii) all orders thereafter placed by Aggreko during the six (6)
month period immediately following the date of the Order Verification, or if no
Order Verification is issued, the date of invoice, with respect to such
Preferential Third Party Sale. In addition, Aggreko shall be entitled to a
rebate equal to (i) the amount of the difference between any lower price for a
Preferential Third Party Sale and the price paid by Aggreko for the same Modular
Cooling Tower Line product, multiplied by (ii) the number of units of such
product purchased by Aggreko within the six (6) month period prior to such
Preferential Third Party Sale. During the Term of this Agreement, Tower Tech
shall make available to Aggreko such Tower Tech books, records, accounts and
personnel as Aggreko may reasonably request to enable Aggreko to confirm that
Aggreko has been properly billed hereunder. Aggreko shall provide Tower Tech
with a refundable deposit equal to twenty percent (20%) of the amount of each
order upon receipt of the Order Verification with respect to such order, with
the balance payable in full for each order within forty-five (45) days after
receipt of Tower Tech's invoice with respect to such order. Tower Tech shall
invoice Aggreko upon shipment of any order.
<PAGE>
6. Term; Termination. Subject to the terms of this Section 6, the
"Term" of this Agreement will be the ten (10) year period commencing on the date
hereof. In the event either party fails to comply with any of the terms and
conditions of this Agreement, the non-breaching party may give the breaching
party sixty (60) days' written notice specifying the breach, and if such breach
fails to be cured within such period, the non-breaching party may immediately
terminate this Agreement.
7. Taxes. The purchase prices for the Modular Cooling Tower Line units
do not include any state or local property, sales or any other taxes. If any of
such taxes should be imposed by virtue of any sales of the Modular Cooling Tower
Line units hereunder, Aggreko agrees to either pay the same or to reimburse
Tower Tech, as the case may be. Aggreko hereby represents and warrants that the
Modular Cooling Tower Line units purchased by Aggreko hereunder will be leased
or rented by Aggreko.
8. Goods and Services Warranty. Tower Tech agrees that all goods and
services provided hereunder shall be subject to the warranties described on
Exhibit D attached hereto. Tower Tech warrants that neither the manufacture,
use, or sale of such goods, nor the providing of such services, nor any marking
or labeling associated therewith shall infringe any patent, trademark,
copyright, or constitute unfair competition. Tower Tech hereby agrees to
indemnify Aggreko against liability for any alleged infringement of any patent,
trademark or copyright; provided, that, Aggreko shall notify Tower Tech within
ten (10) days after receipt by Aggreko of any claim of alleged infringement or
any notice of commencement of any suit based on such alleged infringement.
9. Resale Limitation. Except as provided in Section 10 hereof, Aggreko
may not acquire Modular Cooling Tower Line units for resale to any unaffiliated
third party, but only for use by Aggreko and its affiliates in the cooling tower
leasing and rental business. Notwithstanding the foregoing, Aggreko shall have
the right to resell any and all used or reconditioned Modular Cooling Tower Line
units, or any parts thereof, which have been utilized by Aggreko in connection
with its cooling tower leasing and rental business.
10. Exclusive Supply Arrangement. Tower Tech acknowledges and agrees
that it shall not knowingly sell or agree to sell any product comprising part of
its Modular Cooling Tower Line to any person or entity which directly or
indirectly intends to lease or rent such Modular Cooling Tower Line product,
except for those licensees of Tower Tech set forth on Exhibit E attached hereto.
Moreover, Tower Tech hereby appoints Aggreko as its exclusive worldwide
distributor of those products comprising the Modular Cooling Tower Line for sale
to persons and entities which intend to use such Modular Cooling Tower Line
products in connection with the leasing or rental of industrial cooling towers.
Tower Tech shall promptly transfer to Aggreko any and all sales leads obtained
by Tower Tech with respect to any proposed purchase of any product comprising
part of the Modular Cooling Tower Line by any person or entity which directly or
indirectly intends to use such product in connection with the leasing or rental
of industrial cooling towers.
<PAGE>
11. Compliance with Laws. Tower Tech's performance of work pursuant to
this Agreement or a Purchase Order Form and all products to be delivered
hereunder or thereunder shall be in accordance with any and all applicable
executive orders, federal, state, municipal and local laws and ordinances,
rules, orders, requirements, and regulations thereunder. Such federal laws shall
include but shall not be limited to the Fair Labor Standards Act of 1938, as
amended, and the regulations and orders of the United States Department of
Labor.
12. Severability. Wherever possible, each provision of this Agreement
and each Purchase Order Form shall be interpreted in such manner as to be
effective and valid under applicable Texas law, and if any provision of this
Agreement or any Purchase Order Form shall be prohibited or be invalid under
applicable Texas law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement or the Purchase Order Form.
13. Equipment Specifications. Tower Tech reserves the right to
discontinue manufacturing any or all of the Modular Cooling Tower Line units
upon one hundred and twenty (120) days written notice to Aggreko and without any
liability whatsoever to Aggreko. Tower Tech further reserves the right to modify
the design specifications of any Modular Cooling Tower Line unit; provided,
that, Tower Tech submits to Aggreko a written description of any material
modification which Tower Tech plans to incorporate to any Modular Cooling Tower
Line unit and the approximate date any such material modification will be
effective.
14. Customer Assurance and Service Literature. Tower Tech will provide
Aggreko, at no charge, all standard technical information and photographs
(limited to "glossies" of those photographs used in preparation of Tower Tech
literature) considered necessary by Aggreko to prepare service manuals, service
or product bulletins, parts price lists, wiring diagrams, application
literature, product specification literature, engineering literature and parts
logs to cover all Modular Cooling Tower Line units purchased by Aggreko from
Tower Tech. Tower Tech shall use its reasonable efforts to timely provide
answers to technical service and applications questions raised by Aggreko with
respect to any Modular Cooling Tower Line unit.
15. Independent Contractor. Each party hereto is, and at all times will
remain, an independent contractor and will not represent itself to be the agent,
joint venturer, or partner of the other party hereto or to be related to such
other party. No representations will be made or acts done by either party which
would establish any apparent relationship of agency, joint venture or
partnership. Further, each party acknowledges and agrees that this Agreement
does not create a franchise or any business opportunity rights under any
federal, state or local law. If either party's obligations hereunder require or
contemplate the providing of services on the other party's property or the
property of the other party's customers by such party's employees, persons under
contract with such party, or persons within the control of such party, such
party shall provide such services only as an independent contractor, and the
persons providing such services shall not be considered the other parties
employees or agents. Each party shall maintain policies of Comprehensive General
Liability Insurance, Auto Liability Insurance and Worker's Compensation
Insurance with such companies and with limits of coverage adequate to protect
the other party in respect to a party's duties and obligations hereunder.
<PAGE>
16. Force Majeure. Neither party hereto shall be responsible for the
failure or the delay in the performance of any of its obligations hereunder by
reason of force majeure, including, but not limited to, industrial disputes,
riots, mobs, fires, floods, wars, shortage of labor, power, fuel, material or
transportation, regulations or orders of any government or its agencies or any
other circumstances beyond the reasonable control of such party. Upon the
occurrence of any of the circumstances described in the foregoing sentence,
Tower Tech shall, to the extent practicable, use its best efforts to allocate
its available production, deliveries, services, raw materials and resources to
the production of Modular Cooling Tower Line units for Aggreko at the time of
any such events.
17. Notices. All notices, requests and other communications under this
Agreement shall be in writing (including a writing delivered by facsimile
transmission) and shall be deemed to have been duly given if delivered
personally, or sent by either certified or registered mail, return receipt
requested, postage prepaid, by overnight courier guaranteeing next day delivery,
or by facsimile, addressed as follows:
(a) If to Tower Tech:
Tower Tech, Inc.
11935 South I-44 Service Road
P.O. 1838
Oklahoma City, OK 73173
Attn: Harold D. Curtis, Chief Executive Officer
Facsimile No.: (405) 979-2131
or at such other address or facsimile number as Tower Tech may have advise
Aggreko in writing; and
(b) If to Aggreko:
Aggreko Inc.
4607 W. Admiral Doyle Drive
New Iberia, LA 70560
Attn: Terry Dressel, Vice President Finance
Facsimile No.: (318) 367-0870
or at such other address or facsimile number as Aggreko may have advised Tower
Tech in writing.
All such notices, requests and other communications shall be deemed to have been
received on the date of delivery thereof, if delivered by hand, on the third day
after the mailing thereof, if mailed, on the next day after the sending thereof,
if by overnight courier, and when receipt is acknowledged, if faxed.
<PAGE>
18. Waivers and Amendments. No amendment or waiver of any provision of
this Agreement, nor consent to any departure therefrom, shall be effective
unless the same be in writing and signed by each party hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law.
19. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
20. Assignment. Neither party shall have any right to transfer or
assign its interest or rights in this Agreement or delegate its obligations
under this Agreement without the prior written consent of the other party
hereto.
21. Change in Control. In the event of the occurrence of a Change in
Control (as hereinafter defined) with respect to Tower Tech, Aggreko shall have
the right, in its sole discretion, to either (i) terminate this Agreement upon
providing Tower Tech with at least thirty (30) days written notice of Aggreko's
intention to terminate this Agreement, or (ii) continue the performance of this
Agreement; provided, that, the surviving or resulting entity or entities
involved in any such Change in Control transaction shall specifically assume, as
a co-obligor with Tower Tech and as a condition to the effectiveness of any such
Change in Control transaction, the obligations of Tower Tech hereunder.
For purposes of this Agreement, a Change in Control shall be deemed to
have occurred if (i) a majority of the voting capital stock in Tower Tech is
acquired by a third party or third parties, other than those persons holding
shares of Tower Tech's capital stock on the date of this Agreement, or their
respective affiliates, (ii) Tower Tech enters into a merger or consolidation
with another corporation or business entity in which Tower Tech is not the
surviving entity, (iii) Tower Tech becomes a majority-owned subsidiary of
another corporation, (iv) a change during any period of two consecutive years of
a majority of the members of the Board of Directors of Tower Tech for any
reason, unless the election, or the nomination for election by Tower Tech's
stockholders, of each director was approved by a majority vote of the directors
then still in office who were directors at the beginning of such period, (v)
more than fifty percent (50%) of the assets of Tower Tech are transferred or
sold, or (vi) all or substantially all of the assets comprising the
factory-assembled cooling tower division are transferred or sold.
22. GOVERNING LAW. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICT OF LAWS.
<PAGE>
23. Arbitration. The parties shall use their respective best efforts to
settle amicably any disputes, differences or controversies arising between the
parties out of or in connection with or in respect of this Agreement. However,
if not so settled then the same shall be submitted to arbitration and to the
fullest extent permitted by law, be solely and finally settled by arbitration.
The arbitration proceeding shall be held in Dallas, Texas, and shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association and to the extent not inconsistent therewith, the Texas
General Arbitration Act, Title 10, Vernon's Ann. Civ. Stat. Judgement upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction, or application may be made to such court for a judicial acceptance
of the award and any order of enforcement as the case may be.
24. Number and Gender. Whenever herein the singular number is used, the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.
25. Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
26. Entirety. This Agreement contains the agreement and understanding
among the parties with respect to the matters addressed herein and supersedes
all prior representations, inducements, promises or agreements, oral or
otherwise, which are not embodied herein.
27. Third Party Beneficiaries. Nothing contained herein, express or
implied, is intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assigns any rights or
remedies under or by reason of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
AGGREKO: AGGREKO INC.
By: ss/GEORGE P. WALKER
-----------------------------------
Printed Name: George P. Walker
Title: Executive Vice President
By ss/TERRELL P. DRESSEL, JR.
----------------------------------
Printed Name: Terrel P. Dressel, Jr.
Title: Vice President Finance
TOWER TECH: TOWER TECH, INC.
By ss/HAROLD D. CURTIS
----------------------------------
Printed Name: Harold D. Curtis
Title: Chief Executive Officer
<PAGE>
EXHIBIT D
PRODUCT WARRANTIES
Tower Tech warrants for a period of one (1) year that cooling tower
workmanship and materials, excluding defects in pigmentation and cosmetic
deterioration of pultruded or injection-molded parts, shall be free of defects
with respect of any materials manufactured by, and any workmanship performed by,
Tower Tech. Tower Tech will replace or repair, at Tower Tech's discretion, any
such defective workmanship or defective materials within thirty (30) days of a
valid warranty claim by Aggreko.
Tower Tech's warranty is subject to the following conditions: (a) For
any warranty claim, Tower Tech must receive from Aggreko within the warranty
period written notice describing the defect or defects. (b)Aggreko shall not
have, without Tower Tech's written permission, attempted to correct the defect.
(c) Aggreko shall have operated and maintained the equipment in accordance with
Tower Tech's published operating instructions. (d) The defect has been caused
solely by faulty materials or workmanship for which Tower Tech is responsible
and is not due to such things as accident, alteration, erosion, corrosion or
other physical deterioration caused by exposure to the elements, an abnormally
corrosive or abrasive use environment, normal wear and tear, or from abuse,
neglect or operation of the equipment in conflict with prevailing standards of
the cooling tower industry. (e) All liability of Tower Tech shall be limited, at
Tower Tech's sole option, to the repair and replacement of defective parts and
Tower Tech shall have no liability for consequential or other damages or for
transportation charges relating to repaired, replaced or defective parts. (f)
This warranty is not transferable. Tower Tech makes no warranty for any
materials and equipment manufactured by parties other than Tower Tech. Benefits
to Tower Tech, if any, with respect to materials and equipment manufactured by
other parties, including, but not limited to, hardware, fans, drift eliminators
fill media, float valves, motors, basin heaters, electrical distribution and
control panels, pumps, heat exchangers, water filtration equipment, fan hubs,
pipe and pipe fittings, but furnished to Tower Tech, are hereby assigned to
Aggreko.
Tower Tech's liability hereunder is expressly limited as follows: (a)
The warranties set forth above are Aggreko exclusive remedies against Tower Tech
with respect to the manufacture, operation or performance of the cooling towers
and are in lieu of any other warranties or guarantees, express or implied,
including the warranties of merchantability and fitness for a particular
purpose. (b) Tower Tech shall not be liable to Aggreko for any consequential,
indirect or liquidated damages, including, but not limited to, loss of profits
or revenue, loss of use of equipment, costs of replacement cooling towers,
additional expenses incurred in the use of equipment or facilities, or claims of
customers of Aggreko. The disclaimer shall apply to consequential damages based
upon any cause of action asserted against Tower Tech, including claims arising
out of breach of warranty, expressed or implied, guarantee, product liability,
negligence, personal injury or any other clam pertaining to the performance or
non-performance of this contract by Tower Tech. (c) Tower Tech shall not be
responsible for handling or modification of the cooling tower by Aggreko. (d)
Except as otherwise set forth in this Agreement, no statement, remark,
agreement, representation, promise or understanding, oral or written, made by
Tower Tech or any agent, representative or employee which is not contained
herein will be recognized or enforceable or binding upon Tower Tech.
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EXHIBIT E
PERMITTED LICENSEES
1. License Agreement dated as of September 1, 1995 by and between Tower
Tech, Inc. and Shriram Cooling Towers Ltd.
2. License Agreement dated as of December 29, 1995 by and between Tower
Tech, Inc. and Ilmed Impianti S.r.L., as amended by that certain
License Extension and Amendment Agreement dated as of October 31, 1998.
3. License Agreement dated as of [September 10, 1997] by and between Tower
Tech, Inc. and Industrial Water Cooling (PTY) LTD.
E-1
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