<PAGE>
Exhibit 10.19
================================================================================
STOCK PURCHASE AGREEMENT
AMONG
ROBERT G. DUTCHER, RAYMOND M. DELORENZO, BRUCE K. PATTERSON and
SCOTT E. CATHERS, AS SELLERS
AND
NESCO, INC.,
AS BUYER
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I.........................................................................................................1
ARTICLE II........................................................................................................3
2.01 THE TRANSACTION.................................................................................3
2.02 ADJUSTMENT OF PURCHASE PRICE....................................................................3
2.03 EFFECTIVE TIME OF THE TRANSACTION...............................................................4
ARTICLE III.......................................................................................................5
3.01 ORGANIZATION, GOOD STANDING, POWER..............................................................5
3.02 CAPITALIZATION..................................................................................5
3.03 SUBSIDIARIES....................................................................................5
3.04 AUTHORIZATION OF AGREEMENT......................................................................5
3.05 CONTRACTS AND AGREEMENTS........................................................................7
3.06 TRADE NAMES, TRADEMARKS, COPYRIGHTS, ETC........................................................8
3.07 PROPRIETARY RIGHTS..............................................................................8
3.08 TITLE TO PROPERTIES: ABSENCE OF LIENS AND ENCUMBRANCES: LEASES..................................8
3.09 FINANCIAL STATEMENTS; NO ADVERSE CHANGES........................................................9
3.10 INVENTORIES....................................................................................10
3.11 LABOR MATTERS..................................................................................10
3.12 TAXES..........................................................................................10
3.13 EMPLOYEE MATTERS...............................................................................11
3.14 LITIGATION.....................................................................................13
3.15 INSURANCE......................................................................................13
3.16 BROKERS AND FINDERS............................................................................14
3.17 COMPLIANCE WITH LAWS...........................................................................14
3.18 PERMITS AND LICENSES...........................................................................15
3.19 BILLS AND INVOICES.............................................................................15
3.20 UNTRUE STATEMENTS..............................................................................15
3.21 ACTIONS SINCE MAY 31, 2000.....................................................................15
3.22 COMPANY ASSETS SUFFICIENT TO CONDUCT BUSINESS OF SELLERS.......................................15
3.23 SELLERS INVESTMENT REPRESENTATIONS.............................................................15
ARTICLE IV.......................................................................................................16
4.01 ORGANIZATION, GOOD STANDING, POWER.............................................................17
4.02 BROKERS AND FINDERS............................................................................17
ARTICLE V........................................................................................................18
5.01 APPROVALS......................................................................................18
5.02 INVESTIGATION BY BUYER.........................................................................18
5.03 CONDUCT OF BUSINESS............................................................................18
5.04 NO DISPOSAL OF PROPERTY........................................................................20
5.05 NO ACQUISITIONS................................................................................20
5.06 NO BREACH OR DEFAULT...........................................................................20
5.07 NO INDEBTEDNESS................................................................................20
5.08 PAYMENT OF LIABILITIES.........................................................................21
5.09 NOTICE AND CURE................................................................................21
5.10 COOPERATION OF MANAGEMENT PENDING TRANSACTION..................................................21
5.11 CERTIFICATES OF GOOD STANDING..................................................................21
5.12 NO CHANGES TO EMPLOYEE BENEFIT PLANS...........................................................21
ARTICLE VI.......................................................................................................21
6.01 APPROVALS......................................................................................21
-i-
<PAGE>
6.02 BUYER'S OBLIGATION TO MAKE TRANSACTION EFFECTIVE...............................................22
6.03 NOTICE AND CURE................................................................................22
ARTICLE VII......................................................................................................22
7.01 CONSENTS AND APPROVALS.........................................................................22
7.02 CERTAIN ACTIONS, ETC...........................................................................22
ARTICLE VIII.....................................................................................................23
8.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES.....................................................23
8.02 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS............................................23
8.03 OFFICERS' CERTIFICATE, ETC.....................................................................23
8.04 NON-COMPETE AGREEMENT..........................................................................23
8.05 EMPLOYMENT AGREEMENTS..........................................................................23
8.06 LEGAL OPINION..................................................................................23
8.07 CONSENTS.......................................................................................23
8.08 DELIVERY OF ASSIGNMENTS........................................................................24
ARTICLE IX.......................................................................................................24
9.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES.....................................................24
9.02 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS............................................24
9.03 OFFICERS' CERTIFICATES, ETC....................................................................24
ARTICLE X........................................................................................................24
10.01 TERMINATION....................................................................................24
10.02 EFFECT OF TERMINATION..........................................................................25
10.03 AMENDMENT......................................................................................25
10.04 WAIVER.........................................................................................25
ARTICLE XI.......................................................................................................26
11.01 CONFIDENTIALITY................................................................................26
11.02 PUBLIC ANNOUNCEMENTS...........................................................................26
11.03 ADDITIONAL AGREEMENTS..........................................................................26
11.04 AVAILABLE REMEDIES.............................................................................26
11.05 INDEMNIFICATION................................................................................26
11.06 ACTIONS OF THE PARTIES AFTER THE CLOSING.......................................................28
ARTICLE XII......................................................................................................29
12.01 CLOSING........................................................................................29
12.02 EXPENSES.......................................................................................29
12.03 NOTICES........................................................................................29
12.04 TIME...........................................................................................30
12.05 ENTIRE AGREEMENT; AMENDMENT....................................................................30
12.06 BINDING EFFECT; BENEFITS.......................................................................31
12.07 ASSIGNMENT.....................................................................................31
12.08 APPLICABLE LAW.................................................................................31
12.09 ARTICLE AND SECTION HEADINGS...................................................................31
12.10 COUNTERPARTS...................................................................................31
</TABLE>
Exhibit A - Option Agreement
Exhibit B - Financial Statements
Exhibit C - Sellers Non-Compete Agreement
Exhibit D - Employment Agreements
Exhibit E - Opinion of Sellers' Legal Counsel
SCHEDULE 2.01 - List of Sellers and Respective Interests
SCHEDULE 3.06 - Trade Names, Fictitious Names
-ii-
<PAGE>
SCHEDULE 3.08 - Leases and Other Agreements
SCHEDULE 3.13 - Employee Matters
SCHEDULE 3.14 - Litigation
SCHEDULE 3.15 - Insurance
SCHEDULE 3.18 - Scheduled Permits
-iii-
<PAGE>
STOCK PURCHASE AGREEMENT
This Agreement is entered into as of September 29, 2000 (this
"Agreement"), by and among NESCO, Inc., an Oklahoma corporation ("Buyer"),
and Robert G. Dutcher, Raymond M. Delorenzo, Bruce K. Patterson and Scott E.
Cathers, individuals ("Sellers").
WHEREAS, Buyer desires to purchase and Sellers desire to sell, on
the terms, in the manner and subject to the conditions reflected below, all
of the issued and outstanding capital stock of Atlanta Petroleum Equipment
Company, Inc., a Georgia corporation (the "Company"), said purchase of stock
referred to herein as the "Transaction"; and
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein set forth, the
parties to this Agreement have agreed, and hereby agree subject to the terms
and conditions hereinafter set forth, as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used herein shall have the meanings ascribed to them in
this Article I, unless such terms are defined elsewhere in this Agreement.
AFFILIATES: of any person means persons who control, are controlled
by or in common control with such person.
BUSINESS: shall mean the current business of the Company of
petroleum fueling systems, equipment sales, installation, service and
maintenance, and related services and any other business of or activity by
the Company necessary to accomplish the foregoing purposes.
BUYER SHARES: as defined in Section 2.01(b).
CLOSING: as defined in Section 2.01(a).
COMPANY: Atlanta Petroleum Equipment Company, Inc., a Georgia
corporation, which term shall include all subsidiary corporations, limited
liability companies, partnerships and other business entities, if any.
COMPANY LIABILITIES: those liabilities of the Company at the date of
Closing.
EFFECTIVE TIME OF THE TRANSACTION: as defined in Section 2.04.
FINANCIAL STATEMENTS: those financial statements of Sellers
described in Section 3.09.
GOVERNMENTAL ENTITY: any court, government, governmental agency,
commission or instrumentality, domestic or foreign.
-1-
<PAGE>
LEGAL REQUIREMENTS: any law, statute, ordinance, decree,
requirement, order, judgment, rule or regulation of, including the terms of
any license, certificate, franchise or permit issued by, the United States,
any state, commonwealth, territory or possession thereof and any political or
judicial subdivision or instrumentality of the foregoing, including, without
limitation, courts, departments, commissions, boards, bureaus or agencies.
MATERIAL CONTRACTS: those contracts, agreements, instruments, and
other obligations described in Section 3.05(a).
GEORGIA LAW: the Georgia Business Corporation Code, as amended.
NET WORTH: the stockholders' equity of the Company as reflected from
time to time on its balance sheet prepared in accordance with generally
accepted principles consistently applied.
OKLAHOMA LAW: the Oklahoma General Corporation Act, as amended.
OPTIONS: those options to purchase Buyer Shares referred to in
Section 2.01(b)(1), the terms of which are set forth in the form of Option
Agreement attached hereto as EXHIBIT A.
PROPRIETARY RIGHTS: trade secrets, copyrights, patents, trademarks,
service marks, customer lists, and all similar types of intangible property
developed, created, or owned by the Company, or used by the Company in
connection with its business, whether or not the same are entitled to legal
protection, including without limitation: (a) all designs, methods,
inventions and know-how related thereto, (b) all trademarks, trade names,
service marks, and copyrights claimed or used by the Company whether or not
they have been registered, and (c) all customer lists of the Company, and (d)
corporate names used by the Company.
PURCHASE PRICE: the consideration to be paid by Buyer to Sellers for
the Shares as provided in Article II.
SECURITIES: as defined in Section 3.23.
SHARES: shares of the common stock, par value $1.00 per share, of
the Company.
TAXES: all net income, gross income, gross receipts, sales and use,
ad valorem, franchise, profits, licenses, withholding, payroll, excise,
severance, stamp, occupation, property, customs duties or other taxes, fees
or charges of any kind whatsoever imposed by a foreign, federal, state,
county or local taxing authority together with any interest or penalty
thereon.
TRANSACTION DOCUMENTS: the documents, instruments, agreements, etc.
referred to in Section 2.01(b).
-2-
<PAGE>
ARTICLE II
STOCK PURCHASE AND SALE
2.01 THE TRANSACTION.
(a) At the Effective Time of the Transaction, in accordance
with the terms of this Agreement, Sellers shall sell to Buyer,
and Buyer shall purchase from Sellers, the Shares, and Buyer
will make payment to Sellers of the consideration indicated in
Section 2.01(b) below. The consummation of the Transaction
together with the delivery of the various stock certificates,
stock powers, assignments. conveyances, officer certificates,
agreements, assumptions, opinions and other documents required
or contemplated by this Agreement (the "Transaction
Documents") is herein called the "Closing."
(b) The Purchase Price shall be an aggregate of up to
$2,800,000 cash, subject to adjustment as provided in Section
2.02 below, and options (the "Options") to purchase an
aggregate of up to 80,000 shares of the common stock of Buyer
(the "Buyer Shares"), payment of which shall be as follows:
(1) At Closing, Buyer shall deliver to Sellers checks
in the respective amounts indicated on SCHEDULE 2.01 hereof
which shall, in the aggregate, equal $1,400,000 and shall
issue to each of Sellers options to purchase that number of
the Buyer Shares indicated on SCHEDULE 2.01 hereof at a price
of $4.00 per share at any time during a period of five years
from the date of Closing, which options shall cover, in the
aggregate, 80,000 Buyer Shares, and shall be issued in the
form of the Option Agreement attached hereto as EXHIBIT A.
(2) On September 30, 2001, Buyer shall deliver to
Sellers checks in the respective amounts indicated on SCHEDULE
2.01 hereof which shall, in the aggregate, equal $700,000.
(3) On September 30, 2002, Buyer shall deliver to
Sellers checks in the respective amounts indicated on SCHEDULE
2.01 hereof which shall, in the aggregate, equal $700,000.
2.02 ADJUSTMENT OF PURCHASE PRICE. Within 30 days after the date of
Closing, Sellers shall provide Buyer with an unaudited balance sheet of the
Company prepared as at the date of Closing (the "Closing Date Balance Sheet")
in accordance with generally accepted accounting principles consistently
applied. Upon receipt of the Closing Date Balance Sheet, Buyer shall make the
following calculations and adjustments:
(a) The Net Worth as reflected on the Closing Date Balance
Sheet must be equal to or greater than the amount reported on the May
31, 2000, balance sheet in EXHIBIT B (the "May 31 Balance Sheet"). If
the Net Worth reflected on the Closing Date
-3-
<PAGE>
Balance Sheet is less than the Net Worth reflected on the May 31
Balance Sheet, there shall be a dollar for dollar reduction in the
Purchase Price by the amount of the difference. Sellers shall pay to
Buyer their respective shares of the amount of any such adjustment
within ten days of receiving notice from Buyer regarding the same.
Furthermore, notwithstanding anything to the contrary in the foregoing,
it shall be a condition to the Closing that unless waived by the Buyer
prior to the Closing Date:
(i) the total liabilities of the Company reflected on the
Closing Date Balance sheet shall not be greater than
110% of the total liabilities of the Company
reflected on its May 31, 2000 Balance Sheet, and
(ii) the total assets of the Company reflected on the
Closing Date Balance Sheet shall not be less than 90%
of the total assets of the Company reflected on its
May 31, 2000 Balance Sheet.
(b) The Purchase Price also shall be reduced by the amount of
any accounts receivable reflected on the Closing Date Balance Sheet
which are not collected and received by Buyer within ninety (90) days
from the date of Closing. Any such reductions shall reduce dollar for
dollar the total amount payable to Sellers on September 30, 2001.
Sellers will then be assigned any accounts receivable which have not
been collected in full and have thereby caused the Purchase Price to be
adjusted as provided in this subsection (b).
(c) Should a dispute arise involving an amount greater that
$5,000 in the aggregate with regard to the review of the financial
statements or collection of accounts receivable and calculation of
adjustments, if any, the Buyer's and Sellers' respective accounting
firms shall select a mutually acceptable accounting firm to make the
final determination as to the calculation of such amounts.
2.03 EFFECTIVE TIME OF THE TRANSACTION. The Transaction shall not
become effective until, and, subject to the terms and conditions of this
Agreement, shall become effective when, the actions and deliveries set forth
in Articles VIII and IX below shall have in all respects been completed. The
date and time when the Transaction shall become effective as aforesaid is
herein referred to as the "Effective Time of the Transaction."
-4-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers jointly and severally represent and warrant to Buyer as
follows:
3.01 ORGANIZATION, GOOD STANDING, POWER. The Company is a
corporation duly organized, validly existing and in good standing under
Georgia law and has the requisite corporate power and authority to carry on
its business as it is now being conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned or leased by it, or
the nature of its activities, is such that qualification as a foreign
corporation in that jurisdiction is required by law.
3.02 CAPITALIZATION. The authorized capital stock of the Company
consists of 100,000 Shares. As of the date of this Agreement, there are
50,000 Shares issued and outstanding. There are no Shares are held in the
treasury of the Company. All shares of capital stock of the Company that are
outstanding as of the date hereof, or will be outstanding immediately prior
to the Effective Time of the Transaction, are or will be duly authorized,
validly issued, fully paid and nonassessable, are not or will not be subject
to, or issued in violation of, any preemptive rights. Except as set forth
above, there are no shares of capital stock of the Company authorized or
outstanding, and there are no subscriptions, options to purchase Shares of
the capital stock of the Company, conversion or exchange rights, warrants,
preemptive rights or other agreements, claims or commitments of any nature
whatsoever (whether firm or conditional) obligating the Company to issue,
transfer, deliver to sell, or cause to be issued, transferred, delivered or
sold, additional shares of the capital stock or other securities or interests
of the Company or obligating the Company to grant, extend or enter into any
such agreement or commitment. Sellers own all of the issued and outstanding
shares of the capital stock of the Company.
3.03 SUBSIDIARIES. The Company does not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any material equity interest in any firm, partnership,
joint venture, association or other entity.
3.04 AUTHORIZATION OF AGREEMENT.
(a) Each of Sellers has all requisite capacity, power and
authority to enter into and perform all of his obligations
under this Agreement. The execution and delivery of this
Agreement by each of Sellers and the consummation by him of
the transactions contemplated hereby have been duly authorized
by all necessary action on his part. This Agreement has been
duly executed and delivered by each of Sellers and constitutes
the legal, valid and binding obligation of each Sellers.
(b) Neither the execution and delivery of this Agreement by
Sellers nor the consummation of the Transaction and the other
transactions contemplated hereby to be performed by Sellers
will (i) violate or conflict with any provision of the
Articles of Incorporation or Bylaws of the Company, as
currently in effect, or (ii)
-5-
<PAGE>
violate or conflict with any provision of any law, rule,
regulation, order, permit, certificate, writ, judgment,
injunction, decree, determination, award or other decision of
any Governmental Entity, other regulatory or self-regulatory
body or association or arbitrator binding upon the Company or
its Business, except where such violations or conflicts would
not in the aggregate have a material adverse effect on the
business, properties, financial condition or results of
operations of the Company or on the ability of Sellers to
consummate the transactions contemplated hereby.
(c) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby to be
performed by Sellers will result in a breach of or constitute
a default (or with notice or lapse of time or both result in a
breach of or constitute a default) under, or give rise to a
right of termination, cancellation, acceleration or repurchase
of any obligation or a right of first refusal with respect to
any material property or asset or a loss of a material benefit
or the imposition of a material penalty under, any of the
terms, conditions or provisions of:
(i) any mortgage, indenture, loan or credit agreement
or any other agreement or instrument evidencing indebtedness
for money borrowed to which Sellers or the Company is a party
or by which it or any of its properties is bound or affected,
or pursuant to which Sellers or the Company has guaranteed the
indebtedness or preferred stock of any person or entity, or
(ii) any lease, license, tariff, contract or other
agreement or instrument to which the Company is a party or by
which it or any of its properties is bound or affected,
except, in either case, for:
(x) for any such breaches, defaults, rights, losses
or penalties that do not have a material adverse effect on the
business, properties, financial condition or results of
operations of the Company or on the ability of Sellers to
consummate the transactions contemplated hereby, and
(y) for such third party consents as will be
obtained prior to the Effective Time of the Transaction.
(d) Neither the execution and delivery by Sellers of this
Agreement nor the consummation of the transactions
contemplated hereby to be performed by Sellers will result in,
or require, the creation or imposition of any mortgage, deed
of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the
properties or other assets now or hereafter owned by the
Company except where such would not in the aggregate have a
material
-6-
<PAGE>
adverse effect on the business, properties, financial
condition or results of operations of the Company or on the
ability of Sellers to consummate the transactions contemplated
hereby.
(e) No consent, approval, order, certificate or authorization
of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to the
Company or Sellers in connection with the execution and
delivery of this Agreement by Sellers or the consummation by
Sellers or the Company of the transactions contemplated
hereby, other than such filings or registrations that, if not
made, and such authorizations, consents or approvals, that, if
not received, would not in the aggregate have a material
adverse effect on the business, properties, financial
condition or results of operations of the Company or on the
ability of Sellers to consummate the transactions contemplated
hereby.
(f) The Company has made or obtained each registration,
filing, submission, license, permit, certificate,
determination or governmental approval necessary to enable it
to carry on its Business, except for those which the failure
to have does not have a material adverse effect on the
business, properties, financial condition or results of
operations of the Company. All such registrations, filings and
submissions with any Governmental Entity relating to the
operations of the Company were in material compliance with
applicable law when filed, and no material deficiencies have
been asserted by any such authority with respect to such
registrations, filing or submissions.
3.05 CONTRACTS AND AGREEMENTS.
(a) Before the Closing, Sellers will, or will cause the
Company to, provide Buyer access to and the right to copy all
contracts, agreements, commitments and instruments, including
any and all amendments thereto, involving a commitment or
obligation on the part of either the Company or the other
party or parties to the contracts, agreements, commitments and
instruments of $5,000 or more (the "Material Contracts"),
whether written or oral, to which the Company is a party or by
which the Company or any of its assets are bound, including,
but not limited to, purchase orders and agreements,
maintenance agreements, bulk purchase contracts, employment
agreements, commission agreements and any contracts,
agreements or written arrangements pursuant to which any
affiliate of the Company receive any payments from or provide
services, supplies, equipment or other materials to, the
Company.
(b) the Company has complied in all material respects with the
provisions of all the Material Contracts; the Company is not in
material breach or default under, and there is no valid basis for any
claim of breach or default under, and there has been no waiver of any
breach or default under, any term or provision of any Contract; all the
Material Contracts are in full force and effect and constitute legal,
valid and binding obligations of
-7-
<PAGE>
the respective parties thereto in accordance with their terms. There
has been no amendment or modification of any of the Material Contracts,
except such amendments that have been delivered to Buyer. The Company
is not participating in any discussions or negotiations regarding
modification of any of the Material Contracts.
3.06 TRADE NAMES, TRADEMARKS, COPYRIGHTS, ETC. SCHEDULE 3.06 is
a list that identifies each trade name, fictitious business name, or other
similar name under which the Company has conducted any part of its Business
or in which the Company has utilized any of its assets preceding the date of
this Agreement. There have not been asserted against the Company any claims
that any product, activity or operation of the Company infringes upon or
involves, or had resulted in the infringement of, any proprietary right of
any other person, corporation or other entity; and no proceedings have been
instituted, are pending or are threatened which challenge the rights of the
Company with respect thereto, in each case, which would have a material
adverse effect on the business, properties, financial condition or results of
operations of the Company.
3.07 PROPRIETARY RIGHTS. The Company possesses full ownership
of, or adequate and enforceable long-term licenses or other rights to use
(without payment), all Proprietary Rights owned by or registered in the name
of the Company or used in the Business without any known conflict with the
rights of others. The Company has in all material respects performed all of
the obligations required to be performed by it, and is not in default in any
material respect, under any agreement relating to any Proprietary Right.
Proprietary Rights constitute trade secrets of the Company within the meaning
of all applicable laws, and, to Sellers' knowledge, the Company has taken all
reasonably necessary steps required by law to protect these trade secrets as
such. The Company owns or has valid rights to use all Proprietary Rights. No
person has made or, to Sellers' knowledge, threatened to make any claims that
the operation of the Business of the Company is in violation of or infringes
any Proprietary Rights or any other proprietary or trade rights of any third
person. To Sellers' knowledge, no third person is in violation of or is
infringing upon any Proprietary Rights. The Proprietary Rights include all of
such rights and interests which are reasonably necessary for the conduct of
the Company's business as it is currently being conducted.
3.08 TITLE TO PROPERTIES: ABSENCE OF LIENS AND ENCUMBRANCES:
LEASES.
(a) The Company has good and marketable title to all of its
assets, tangible and intangible, free and clear of all
mortgages, liens, pledges, charges and encumbrances of any
nature whatsoever except for those liabilities which are being
specifically assumed by the Buyer.
(b) SCHEDULE 3.08 sets forth a brief description of all leases
or agreements under which the Company is lessee of, or holds or
operates, any property owned by any third party and which are to be
assumed by the Buyer, including in each case, the expiration date of
such lease or agreement, the payments to be made thereunder, the
details of any option to renew or to purchase thereunder, the name or
names of the lessor of each such lease and a brief description of the
property covered thereby. Each such
-8-
<PAGE>
lease and agreement is in good standing and is valid and binding in
accordance with its terms. The Company and each lessor have in all
material respects performed all the obligations required to be
performed by them to date and are not in default in any material
respect under any such lease or agreement. None of the rights of the
Company in such property under any such lease or agreement is subject
to termination as the result of the transactions contemplated by this
Agreement.
(c) Except as disclosed in SCHEDULE 3.08, all of the tangible
personal property of the Company is in good operating condition and
repair, subject to ordinary wear and tear. The Company is not in
violation of any applicable regulation, ordinance or other similar law,
order, regulation or requirement relating to its Business or properties
(including the placement, installation, operation, configuration,
design or maintenance of emissions from such properties) which, if
enforced, would materially and adversely affect the Business,
properties, financial condition or results of operations.
(d) SCHEDULE 3.08 sets forth a brief description of all leases
or agreements under which the Company is lessor of any property and
which are to be assigned to Buyer, including in each case, the
expiration date of such lease or agreement, the payments to be received
thereunder, the details of any option to renew or to purchase
thereunder, the name or names of the lessee of each such lease and a
brief description of the property covered thereby. Each such lease and
agreement is in good standing and is valid and binding in accordance
with its terms. The Company and each lessee have in all material
respects performed all the obligations required to be performed by them
to date and are not in default in any material respect under any such
lease or agreement. None of the rights of the Company under any such
lease or agreement is subject to termination as the result of the
transactions contemplated by this Agreement.
3.09 FINANCIAL STATEMENTS; NO ADVERSE CHANGES. Sellers or the
Company has delivered to Buyer copies of the Company's unaudited balance
sheet as at May 31, 2000 and its profit and loss statements for the year
ended December 31, 1999 and the five months ended May 31, 2000 (the
"Financial Statements") copies of which are attached hereto as EXHIBIT B. The
Financial Statements are complete in all material respects, present fairly
the financial condition of the Company as at the dates indicated, and the
results of operations for the respective periods indicated. None of the
Financial Statements includes or omits an asset or a liability or obligation
of any kind or nature (whether known or unknown and whether absolute,
accrued, contingent or other), the inclusion or omission of which would
render such Financial Statements materially misleading. The Company has no
liabilities (of any kind or nature, whether known or unknown and whether
absolute, accrued, contingent or other) that are not adequately reflected or
reserved against on the face of the Financial Statements except liabilities
incurred since such date in the ordinary course of business and consistent
with past practice. Without limiting the foregoing, (a) there are no unpaid
leasehold improvements at any of the Company's facilities or locations for
which the Company is or will be responsible, and (b) there are no deferred
rents due to lessors at or with respect to any of such facilities or
locations. Since May 31, 2000, other than as contemplated or caused by this
Agreement, there has not been (a) any material adverse change in
-9-
<PAGE>
the business, condition (financial or otherwise), operations, or prospects of
the Company; (b) any damage, destruction, or loss, whether covered by
insurance or not, having a material adverse effect on the business, condition
(financial or otherwise), operations, or prospects of the Company; (c) any
entry into or termination of any material commitment, contract, agreement, or
transaction (including, without limitation, any material borrowing or capital
expenditure or sale or other disposition of any material asset or assets) of
or involving the Company other than this Agreement and agreements executed in
the ordinary course of business; (d) any redemption, repurchase, or other
acquisition for value of its capital stock by the Company, or any issuance of
capital stock of the Company or of securities convertible into or rights to
acquire any such capital stock or any dividend or distribution declared, set
aside, or paid on capital stock of the Company; (e) any transfer of or right
granted under any material lease, license, agreement, patent, trademark,
trade name, or copyright of the Company; (f) any sale or other disposition of
any asset of any of the Company, or any mortgage, pledge, or imposition of
any lien or other encumbrance on any asset of the Company, other than in the
ordinary course of business, or any agreement relating to any of the
foregoing; or (g) any default or breach by the Company in any material
respect under any contract, license or permit. Since May 31, 2000, the
Company has conducted its business only in the ordinary and usual course,
and, without limiting the foregoing, no changes have been made in (a)
executive compensation levels, (b) the manner in which other employees of the
Company are compensated, (c) supplemental benefits provided to any such
executives or other employees, or (d) inventory levels in relation to sales
levels, except, in any such case, in the ordinary course of business and, in
any event, without material adverse effect on the business, condition
(financial or otherwise), operations, or prospects of the Company, or any
mortgage, pledge, or imposition of any lien or other encumbrance on any asset
of the Company, other than in the ordinary course of business, or any
agreement relating to any of the foregoing; or (g) any default or breach by
the Company in any material respect under any contract, license or permit.
3.10 INVENTORIES. All inventories of the Company, whether or not
reflected in the Financial Statements, are of a quality and quantity usable
and salable in the ordinary course of business. Items included in such
inventories are carried on the books of the Company, and are valued on the
Financial Statements, at the lower of cost or market and, in any event, at
not greater than their net realizable value, on an item by item basis, after
appropriate deduction for costs of completion, marketing costs,
transportation expense, and allocation of overhead.
3.11 LABOR MATTERS. There are no activities or controversies,
including, without limitation, any labor organizing activities, election
petitions or proceedings, proceedings preparatory thereto, unfair labor
practice complaints, labor strikes, disputes, slowdowns, or work stoppages,
pending or, to the best of the knowledge of Sellers, threatened, between the
Company and any of its employees.
3.12 TAXES. Except as otherwise provided herein, all Taxes due and
payable by the Company for all periods ending on or before the date of the
Closing have been paid by the Company in full, or have been reserved against
in the Financial Statements. There are no federal, state or local tax liens
upon any assets of the Company. All returns and reports of Taxes required to
be filed by or with respect to the Company, on or before the date of the
Closing, have been
-10-
<PAGE>
filed by the Company, and all Taxes due as shown thereon have been paid by
the Company. No issues have been raised (or are currently pending) by any
Governmental Entity in connection with any of such returns or reports.
3.13 EMPLOYEE MATTERS.
(a) SCHEDULE 3.13 sets forth a complete and accurate list of
each of the following which is or has been sponsored, maintained or
contributed to by the Company or any trade or business, whether or not
incorporated (a "Company ERISA Affiliate"), or in which any employee or
co-employee of any of the Company ERISA Affiliates participates or is
covered, that together with the Company would be considered affiliated
with the Company under Section 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA for the benefit of any person who, as of
the Closing, is a current or former employee or subcontractor of the
Company or any Company Affiliate: (i) each "employee benefit plan," as
such term is defined in Section 3(3) of ERISA (each, a "Company Plan");
and (ii) each personnel policy, stock option plan, bonus plan or
arrangement, incentive award plan or arrangement, vacation policy,
severance pay plan, policy, program or agreement, deferred compensation
agreement or arrangement, executive compensation or supplemental income
arrangement, retiree benefit plan or arrangement, fringe benefit
program or practice (whether or not taxable), employee loan, consulting
agreement, employment agreement and each other employee benefit plan,
agreement, arrangement, program, practice or understanding which is not
described in Section 3.17(a)(i) (each, a "Company Benefit Program or
Agreement") (such Company Plans and Company Benefit Programs or
Agreements are sometimes collectively referred to in this Agreement as
the "Company Employee Benefit Plans").
(b) True, correct and complete copies of each of the Company
Plans and related trusts, if applicable, including all
amendments thereto, have been furnished or made available to
Buyer. There has also been furnished or made available to
Buyer, with respect to each Company Plan required to file such
report and description, the report on Form 5500 for the past
three years, to the extent applicable, and the most recent
summary plan description. True, correct and complete copies or
descriptions of all Company Benefit Programs or Agreements
have also been furnished or made available to Buyer.
(c) Except as otherwise set forth on the SCHEDULE 3.13: (i)
neither the Company nor any Company ERISA Affiliate contributes to or
has an obligation to contribute to, nor has at any time contributed to
or had an obligation to contribute to, a multi-employer plan within the
meaning of Section 3(37) of ERISA or any other plan subject to Title IV
of ERISA; (ii) each of the Company and the Company ERISA Affiliates has
performed all obligations, whether arising by operation of law or by
contract, including ERISA and the Code, required to be performed by it
in connection with the Company Employee Benefit Plans, and, to the
knowledge of Sellers, there have been no defaults or violations by any
other party to the Company Employee Benefit Plans; (iii) all
-11-
<PAGE>
reports, returns, notices, disclosures and other documents relating to
the Company Plans required to be filed with or furnished to
governmental entities, plan participants or plan beneficiaries have
been timely filed or furnished in accordance with applicable law, and
each Company Employee Benefit Plan has been administered in compliance
with its governing written documents; (iv) each of the Company Plans
intended to be qualified under Section 401 of the Code satisfies the
requirements of such Section and has received a favorable determination
letter from the Internal Revenue Service (the "IRS") regarding such
qualified status and has not been amended, operated or administered in
a way which would adversely affect such qualified status; (v) there are
no actions, suits or claims pending (other than routine claims for
benefits) or, to the knowledge of Sellers, contemplated or threatened
against, or with respect to, any of the Company Employee Benefit Plans
or their assets; (vi) each trust maintained in connection with each
Company Plan, which is qualified under Section 401 of the Code, is tax
exempt under Section 501 of the Code; (vii) all contributions required
to be made to the Company Employee Benefit Plans have been made timely;
(viii) no accumulated funding deficiency, whether or not waived, within
the meaning of Section 302 of ERISA or Section 412 of the Code has been
incurred, and there has been no termination or partial termination of
any Company Plan within the meaning of Section 411(d)(3) of the Code;
(ix) no act, omission or transaction has occurred which could result in
imposition on the Company or any Company Affiliate of (A) breach of
fiduciary duty liability damages under Section 409 of ERISA, (B) a
civil penalty assessed pursuant to subsections (c), (i) or (1) of
Section 502 of ERISA or (C) a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code; (x) to the knowledge of Sellers, there is no
matter pending with respect to any of the Company Plans before the IRS,
the Department of Labor or the Pension Benefit Guaranty Corporation
(the "PBGC"); (xi) each of the Company Employee Benefit Plans complies,
in form and operation, with the applicable provisions of the Code and
ERISA; (xii) each Company Employee Benefit Plan may be unilaterally
amended or terminated in its entirety without any liability or other
obligation; (xiii) the Company and the Company Affiliates have no
liabilities or other obligations, whether actual or contingent, under
any Company Employee Benefit Plan for post-employment benefits of any
nature (other than COBRA continuation coverage); and (xiv) neither the
Company nor any of the Company Affiliates or any present or former
director, officer, employee or other agent of the Company or any of the
Company Affiliates has made any written or oral representations or
promises to any present or former director, officer, employee or other
agent concerning his or her terms, conditions or benefits of
employment, including the tenure of any such employment or the
conditions under which such employment may be terminated by the
Company, any of the Company Affiliates or Buyer which will be binding
upon or enforceable against Buyer or the Company after the Effective
Time.
(d) Except as otherwise set forth on SCHEDULE 3.13, no
employee is currently on a leave of absence due to sickness or
disability and no claim is pending or expected to be made by an
employee, former employee or independent contractor for workers'
compensation benefits.
-12-
<PAGE>
(e) With respect to the Company Employee Benefit Plans, there
exists no condition or set of circumstances in connection with any of
the Company or any of the Company Affiliates that could be expected to
result in liability reasonably likely to have a Material Adverse Effect
on the Company under ERISA, the Code or any other applicable law. With
respect to the Company Employee Benefit Plans, individually and in the
aggregate, there are no unfunded benefit obligations which have not
been accounted for by reserves, or otherwise properly footnoted in
accordance with generally accepted accounting principles, on the
financial statements of the Company, which obligations are reasonably
likely to have a material adverse effect on the Company.
(f) Except as set forth in the SCHEDULE 3.13, neither the
execution or delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in any payment becoming
due to any employee or group of employees of any of the Company.
3.14 LITIGATION. Except as disclosed in SCHEDULE 3.14 hereto:
(a) There is no claim, action, suit, proceeding, arbitration,
investigation or inquiry now pending or, to the knowledge of
Sellers, threatened against, relating to or affecting the
Company or the assets, properties or business of the Company
or that questions the validity of this Agreement or affects
the transactions contemplated herein; nor is there any basis
for any such claim, action, suit, proceeding, arbitration,
investigation or inquiry.
(b) Neither the Company nor any of its officers, directors or
employees has been permanently or temporarily enjoined or
prohibited by order, judgment or decree of any Governmental
Entity, other regulatory or self-regulatory body or
association, or arbitrator from engaging in or continuing any
conduct or practice in connection with the business engaged in
by the Company.
(c) There is not in existence any order, judgment or decree of
any Governmental Entity, other regulatory or self-regulatory
body or association or arbitrator enjoining or prohibiting
Sellers or the Company from taking, or requiring Sellers or
the Company to take, any action of any kind or to which the
Company or any of its business, or any of the properties or
assets material to the operations of such business, are
subject or bound.
(d) The Company is not in default in any respect under any
order, writ, injunction or decree of any Governmental Entity,
other regulatory or self-regulatory body or association or
arbitrator.
3.15 INSURANCE. SCHEDULE 3.15 lists each insurance policy
maintained by the Company on any of its properties including the coverage and
deductible amounts and expiration dates. The insurance coverage maintained by
the Company at the date of this Agreement is in the judgment
-13-
<PAGE>
of Sellers adequate in scope and amount in view of the properties owned and
operations carried on by it. The Company has complied in all material
respects with the provisions of all such policies. All of the policies listed
on SCHEDULE 3.15 will remain in full force and effect following the
Transaction in favor of the Company and/or Buyer.
3.16 BROKERS AND FINDERS. Except for the officers or directors
of the Company, no person has acted on behalf of the Company in connection
with any negotiations relative to this Agreement and the transactions
contemplated hereby. No person has a valid claim for a brokerage commission,
finder's fee or other like payment against Buyer or Sellers or the Company.
3.17 COMPLIANCE WITH LAWS. Except where it would not have a
material adverse effect upon the Company, or its business, properties,
financial condition or results of operations:
(a) The Company is in compliance in all material respects with
all Legal Requirements applicable to it or its Business, any
of its properties or assets and/or the ownership, operation
and use thereof, and neither the Company nor any of Sellers
has received notice of any noncompliance or alleged
noncompliance with any Legal Requirement relating or
applicable to any of its properties or assets or to the
operation of its Business, the existence or enforcement of
which would have a material adverse effect on the Buyer's
ability to operate them on the same basis as currently
conducted and operated or which would require the payment of
refunds, fines, penalties or restitution in respect of matters
occurring prior to the Effective Time of the Transaction,
including, without limitation, any Legal Requirement relating
to (i) wages, hours, hiring, non-discrimination, promotion,
retirement, benefits, pensions or working conditions, (ii)
air, water, noise, odor or solid or liquid waste (including
the generation, treatment, storage, disposal or transportation
thereof), (iii) health and safety, (iv) zoning, (v) the
production, processing, advertising, sales or warranty of
products or services of its Business or (vi) trade or
antitrust regulations.
(b) Without limiting the generality of the foregoing, there
exists no noncompliance with, or any condition which would
result in liability under, any applicable Legal Requirements
relating to air, water, noise, odor, solid or liquid waste
(including the generation, treatment, storage, disposal or
transportation thereof) or health and safety, which would have
a material adverse effect on the Buyer's ability to operate
the business of the Company subsequent to the Effective Time
of the Transaction on substantially the same basis as
currently conducted and operated or would require the payment
of fines, penalties or remedial expenditures in respect of
facts, conditions or matters occurring or existing prior to
the Effective Time of the Transaction.
(c) The Company has not handled, treated, stored or disposed
of, or arranged for the handling, treatment, storage or disposal of any
wastes or toxic or hazardous
-14-
<PAGE>
substances or hazardous wastes on any of its real property or, as to
wastes and substances generated by its Business off such real property,
except in compliance with all Legal Requirements in effect at the time
such activity was taken.
3.18 PERMITS AND LICENSES. SCHEDULE 3.18 sets forth all permits,
licenses, certificates, authorizations and approvals granted by any
Governmental Entity and used or held for use in connection with the Business
other than sales tax permits, certificates of occupancy, and certificates of
corporate authority (the "Scheduled Permits"). The Scheduled Permits, the
Company's occupancy certificates, sales tax permits and certificates of
corporate authority constitute all permits, licenses, certificates,
authorizations and approvals necessary for the continued ownership, use and
operation of the Business in all material respects in the manner heretofore
owned, used and operated by the Company. All fees and other payments due and
owing in connection with the Scheduled Permits have been paid in full, and
there are no unpaid fees or other payments that could cause the lapse or
revocation of any of the Scheduled Permits.
3.19 BILLS AND INVOICES. All bills and other payments due and
payable by the Company have been or will be paid in full in the ordinary
course of business, and no labor, material or services have been provided or
performed that have not been or will not be paid in full.
3.20 UNTRUE STATEMENTS. This Agreement and the exhibits,
schedules and appendices hereto, the Financial Statements and all other
documents and information furnished by Sellers, the Company or any of their
respective affiliates or representatives to Buyer or its representatives
pursuant hereto or in connection herewith does not include and will not
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements made herein and therein not misleading.
There are no facts which materially and adversely affect or, so far as
Sellers can now reasonably foresee, will materially and adversely affect the
business, prospects, operations or principal properties of the Company or the
ability of any party to perform its obligations under this Agreement.
3.21 ACTIONS SINCE MAY 31, 2000. Since May 31, 2000, neither the
Company nor Sellers has taken any actions that would be prohibited under the
provisions of this Agreement (without the prior consent of Buyer) after the
date of this Agreement.
3.22 COMPANY ASSETS SUFFICIENT TO CONDUCT BUSINESS OF THE
COMPANY. The assets of the Company include all of the property, equipment,
facilities, rights, permits, licenses and other requirements for Buyer to be
able to conduct the Business.
3.23 SELLERS INVESTMENT REPRESENTATIONS.In connection with their
acquisition of the Options and Buyer Shares to be issued pursuant to any
exercises of the Options (the "Securities"), each of Sellers represents,
warrants and covenants that:
(a) Sellers are acquiring the Securities for investment
purposes only and not with a view to the distribution thereof. Sellers
acknowledge that the issuance of the Securities have not been registered with
the Securities Exchange Commission under the Securities Act of 1933, as
-15-
<PAGE>
amended, or with any state securities agencies or commission under any state
securities or blue sky laws. Sellers will not sell, assign or otherwise
transfer the Securities or any portion thereof or interest therein except
pursuant to a registration statement that has been filed with and declared
effective by the Securities and Exchange Commission and any relevant state
securities agencies or commissions or such transaction is made in strict
compliance with the requirements and conditions of applicable exemptions from
the registration requirements of such acts.
(b) Sellers have received and reviewed copies of the Buyer's
Annual Report on Form 10-K for year ended December 31, 1999; Buyer's
Quarterly Reports on Form 10-Q for the periods ended March 31, 2000 and June
30, 2000, and copies of the definitive Proxy Statement prepared for use in
connection with management's solicitation of proxies for its annual meeting
of shareholders to held May 18, 2000. The said materials are referred to
herein collectively as the "Disclosure Materials." Each of Sellers has had
the opportunity to discuss Buyer's business, management and financial affairs
with its Chairman of the Board and Chief Executive Officer or other executive
officers of Buyer and has had the opportunity to review Buyer's plan of
operation. Each of Sellers understands that such discussions, as well as the
Disclosure Materials and any other written information issued by Buyer were
intended to describe certain aspects of Buyer's business and prospects which
it believes to be material but were not necessarily a thorough or exhaustive
description.
(c) Sellers further agree that the Option Agreement and each
certificate representing the Buyer Shares issued upon exercise of the Options
shall be endorsed with a legend in substantially the following form:
(i) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES ACT. NEITHER THE RECORD NOR THE BENEFICIAL
OWNERSHIP OF SAID SECURITIES MAY BE SOLD OR TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR SAID SECURITIES UNDER SAID
ACTS AND ANY OTHER APPLICABLE STATE SECURITIES LAWS OR RULES UNLESS IN
THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACTS ARE
AVAILABLE WITH RESPECT TO SUCH SALE OR TRANSFER AND SAID SALE OR
TRANSFER IS MADE PURSUANT TO AND IN STRICT COMPLIANCE WITH THE TERMS
AND CONDITIONS OF SAID EXEMPTIONS.
(ii) Any other legend required by any state securities laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
-16-
<PAGE>
4.01 ORGANIZATION, GOOD STANDING, POWER.
(a) Buyer is a corporation duly organized, validly existing
and in good standing under Oklahoma law and has all requisite
power and authority to enter into and perform all of its
obligations under this Agreement. The execution and delivery
of this Agreement by Buyer and the consummation by Buyer of
the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and
constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms except
as enforceability may be subject to (i) any applicable
bankruptcy, insolvency, reorganization or other law relating
to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(b) Neither the execution and delivery of this Agreement by
Buyer nor the consummation of the transactions contemplated
hereby to be performed by Buyer will (i) violate or conflict
with any provision of its certificate of incorporation, as
currently in effect, of Buyer or (ii) violate or conflict with
any provision of any law, rule, regulation, order, permit,
certificate, writ, judgment, injunction, decree,
determination, award or other decision of any Governmental
Entity, other regulatory or self-regulatory body or
association or arbitrator binding upon Buyer or any of its
properties, except where such violations or conflicts would
not in the aggregate have a material adverse effect on the
business, financial condition or properties of Buyer or on the
ability of Buyer to consummate the transactions contemplated
hereby and except for violations that will be cured, waived or
terminated prior to the Effective Time of the Transaction.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Entity is required by or with respect to Buyer in connection
with the execution and delivery of this Agreement by Buyer or
the consummation by Buyer of the transactions contemplated
hereby such filings or registrations which, if not made, and
such authorizations, consents or approvals which, if not
received, would not have any material adverse effect on the
business, financial condition, or properties of Buyer or on
the ability of Buyer to consummate the transactions
contemplated hereby.
4.02 BROKERS AND FINDERS. No person has acted on behalf of Buyer
in connection with any negotiations relative to this Agreement and the
transactions contemplated hereby. No person has a valid claim for a brokerage
commission, finder's fee or other like payment against Buyer.
-17-
<PAGE>
ARTICLE V
COVENANTS OF SELLERS
Sellers covenants and agrees with Buyer that, at all times prior to
the Effective Time of the Transaction, Sellers will comply with, and will
cause the Company to take all actions necessary to comply with, all covenants
and provisions of this Article V, except to the extent Buyer may otherwise
consent in writing or to the extent otherwise expressly required or permitted
by this Agreement.
5.01 APPROVALS. Sellers will (a) take all reasonable steps and
use all reasonable efforts necessary or desirable to recommend the granting
of and to obtain, as promptly as practicable, all approvals, authorizations,
certificates, franchises, licenses, consents and clearances of Governmental
Entities and of third parties, required of Sellers or the Company to
consummate the transactions contemplated hereby, (b) provide such other
information and communications to such Governmental Entities as Buyer or such
authorities may reasonably request, and (c) cooperate with Buyer in
obtaining, as promptly as practicable, all approvals, authorizations,
certificates, franchises, licenses, consents and clearances of Governmental
Entities required of Buyer to consummate the transactions contemplated hereby.
5.02 INVESTIGATION BY BUYER. Sellers will provide, and will
cause the Company to provide, Buyer, its counsel, accountants, actuaries and
other representatives with reasonable access, upon prior notice and during
normal business hours, to all facilities, officers, directors, employees,
agents, accountants, actuaries, assets, properties, books and records of the
Company, and will furnish Buyer and such other persons during such period
with all such other information and data concerning the business, operations
and affairs of the Company or the transactions contemplated hereby as Buyer
or any of such other persons reasonably may request.
5.03 CONDUCT OF BUSINESS. The Company will conduct its Business
only in the ordinary course and consistent with past practice and custom.
Without limiting the generality of the foregoing:
(a) Sellers and the Company will use all reasonable efforts to
(i) preserve intact the Company's present business
organization, reputation and customer relations, (ii) keep
available the services of the Company's present officers,
employees, agents, contract appraisers, consultants and other
similar representatives, (iii) maintain all licenses,
qualifications and authorizations of the Company to do
business in each jurisdiction in which it is so licensed,
qualified or authorized, (iv) maintain all assets and
properties of such the Company in good working order and
condition, ordinary wear and tear excepted, (v) continue all
current marketing, selling and other activities relating to
the business, operations or affairs of the Company, and (vi)
not modify, extend, terminate, amend or otherwise change any
agreement, purchase order, engagement or other material
contract in any material respect.
-18-
<PAGE>
(b) The Company will cause its books and records to be
maintained in the usual manner and consistent with past
practice and custom and will not permit a material change in
any operational, financial reporting or accounting practice or
policy of the Company or in any assumption underlying such a
practice or policy, or in any method of calculating any bad
debt, contingency or other reserve for financial reporting
purposes or for other accounting purposes.
(c) The Company will (i) prepare properly and file duly,
validly and timely all reports and all tax returns required to
be filed with any Governmental Entities with respect to its
business, operations or, and (ii) pay or cause to be paid duly
and fully all Taxes indicated by such tax returns or otherwise
levied or assessed upon such corporation or any of its assets
and properties, and withhold or collect and pay to the proper
taxing authorities or hold in separate bank accounts for such
payment all taxes that such corporation is required to so
withhold or collect and pay, unless such taxes are being
contested in good faith and, if appropriate, reasonable
reserves therefor have been established and reflected in the
books and records of such corporation and in accordance with
generally accepted accounting principles consistently applied.
(d) The Company will use all reasonable efforts to maintain in
full force and effect until the Effective Time of the
Transaction substantially the same levels of coverage as the
insurance afforded under the contracts in force as of the date
of this Agreement.
(e) The Company will comply, in all material respects, with
all Legal Requirements applicable to its business, operations
or affairs.
(f) The Company will not, without the prior written consent of
Buyer, (i) enter into or execute any contract, agreement,
lease, indenture, note or other commitment; (ii) hire,
terminate, promote, transfer, change the salary or other form
of compensation of, grant any leave of absence to or change
any policies of the Company or employment arrangements or
agreements the Company may have with respect to any officers,
directors or employees of the Company or increase the annual
level of compensation of any other officer, director or
employee of the Company; (iii) amend, cancel, modify, alter or
otherwise change the terms of any of its leases or other
material agreements, arrangements, commitments, or other
rights or obligations to which it may be entitled or subject;
(iv) waive or relinquish any of its rights, claims or
authority, or give any material consents to action or
inaction, under any of the agreements, arrangements,
commitments, leases or other bases of its rights or
obligations; or (v) enter into any contract or commitment
involving an expenditure, commitment or obligation of the
Company in excess of $10,000.
-19-
<PAGE>
(g) The Company will not amend or propose to amend its
Certificate/Articles of Incorporation or Bylaws.
(h) The Company will not (i) authorize or issue any additional
shares of its capital stock or any other equity securities of
the Company, or enter into any contract granting any option,
warrant or right calling for the authorization or issuance of
any such equity securities, or (ii) create or issue any
options, warrants or rights to purchase any such equity
securities.
(i) The Company will not (i) declare, set aside or pay any
dividend or other distribution in respect of its capital
stock, or (ii) redeem, purchase or otherwise acquire any
shares of its capital stock, or any interest in or right to
acquire any such shares.
5.04 NO DISPOSAL OF PROPERTY. The Company will not (a) dispose
of or assign any of its assets or properties or permit any of its assets and
properties to be subjected to any liens, except to the extent any such
disposition does not exceed $1,000 in value or any such lien is made or
incurred in the ordinary course of the business consistent with past practice
and custom, or (b) sell any part of its operations or business to any third
party.
5.05 NO ACQUISITIONS. The Company will not (a) merge,
consolidate or otherwise combine or agree to merge, consolidate or otherwise
combine with any other person, (b) acquire all or substantially all, or a
material portion of all, the assets, capital stock or other equity securities
of any other person, or any business division of any other person or (c)
otherwise acquire control or ownership of any other person.
5.06 NO BREACH OR DEFAULT. The Company will not violate, breach
or default, or take or fail to take any action that (with or without notice
or lapse of time or both) would constitute a violation, breach or default
under, any term or provision of any contract to which the Company is a party
or by which any of its assets are or may be bound and as to which such
violation, breach or default, individually or in the aggregate, has or
reasonably may be expected to have a material adverse effect on the validity
or enforceability against the Company of this Agreement or on the business,
properties, financial condition or results of operations of the Company.
5.07 NO INDEBTEDNESS. Except for transactions in the ordinary
course of business consistent with past practice and custom, the Company will
not create, incur, assume, guarantee or otherwise become liable for (a) any
debt, obligation or other liability for money borrowed, or (b) any other
debt, obligation or other liability. The Company will not cancel, pay, agree
to cancel or pay, or otherwise provide for a complete or partial discharge in
advance of a scheduled payment date with respect to, any debt, obligation or
other liability, or waive, cancel or compromise any right to receive any
direct or indirect payment or other benefit under any debt, obligation or
other liability owing to such corporation, except in the ordinary course of
business consistent with past practice and custom.
-20-
<PAGE>
5.08 PAYMENT OF LIABILITIES. Without Buyer's prior written
consent, the Company will not delay or postpone beyond normal past practice
and custom the payment of any material account payable or other debt,
obligation or other liability.
5.09 NOTICE AND CURE. Sellers will notify Buyer promptly in
writing of, and contemporaneously will provide Buyer with true, complete and
correct copies of any and all information or documents relating to, and will
use all reasonable efforts to cure before the Effective Time of the
Transaction, any event, transaction or circumstance that results in or will
result in any covenant or agreement of Sellers or the Company under this
Agreement to be breached, or that renders or will render untrue any
representation or warranty of Sellers contained in this Agreement as if the
same were made on or as of the date of such event, transaction or
circumstance. Sellers will use all reasonable efforts to cure, at the
earliest practicable date and prior to the Effective Time of the Transaction,
any violation or breach of any representation, warranty, covenant or
agreement made by Sellers in this Agreement, whether occurring or arising
before or after the date of this Agreement.
5.10 COOPERATION OF MANAGEMENT PENDING TRANSACTION. Sellers
covenants and agrees that between the date hereof and the Effective Time of
the Transaction, the Company's management will cooperate with Buyer and
endeavor to help persons designated by Buyer to become familiar with the
Company's business, operations, properties, business prospects, needs,
employees and any other matters pertaining to the Company's business and
operations and to begin implementation of the transitional plan to be
developed by Buyer and Sellers.
5.11 CERTIFICATES OF GOOD STANDING. Sellers shall obtain and
provide to Buyer at Closing, a certificate of good standing of the Company
from the State of Georgia, each state in which the Company is authorized to
do business, and from each state in which the Company is doing business.
5.12 NO CHANGES TO EMPLOYEE BENEFIT PLANS. The Company will not
amend or terminate any Employee Benefit Plan.
ARTICLE VI
COVENANTS OF BUYER
Buyer covenants and agrees with Sellers that, at all times prior to the
Effective Time of the Transaction, Buyer at its expense will comply with all
covenants and provisions of this Article VI, except to the extent Sellers may
otherwise consent in writing or to the extent otherwise expressly required or
permitted by this Agreement.
6.01 APPROVALS. Buyer will (a) take all reasonable steps and use
all reasonable efforts necessary or desirable to recommend the granting of
and to obtain, as promptly as practicable, all approvals, authorizations and
clearances of Governmental Entities and of third parties, required of Buyer
to consummate the transactions contemplated hereby, (b) provide such other
information
-21-
<PAGE>
and communications to such Governmental Entities as Sellers or such
authorities may reasonably request, and (c) cooperate with Sellers in
obtaining, as promptly as practicable, all approvals, authorizations and
clearances of Governmental Entities required of Sellers or the Company to
consummate the transactions contemplated hereby.
6.02 BUYER'S OBLIGATION TO MAKE TRANSACTION EFFECTIVE. Buyer
shall take all actions necessary on its part to carry out the transactions
contemplated hereby.
6.03 NOTICE AND CURE. Buyer will notify Sellers promptly in
writing of, and contemporaneously will provide Sellers with true, complete
and correct copies of any and all information or documents relating to, and
will use all reasonable efforts to cure prior to the Effective Time of the
Transaction, any event, transaction or circumstance occurring after the date
of this Agreement that results in or will result in any covenant or agreement
of Buyer under this Agreement to be breached, or that renders or will render
untrue any representation or warranty of Buyer contained in this Agreement as
if the same were made on or as of the date of such event, transaction or
circumstance. Buyer also will use all reasonable efforts to cure, at the
earliest practicable date and before the Effective Time of the Transaction,
any violation or breach of any representation, warranty, covenant or
agreement made by it in this Agreement, whether occurring or arising before
or after the date of this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS
OF BUYER AND SELLERS
Notwithstanding any other provision of this Agreement, the obligation
of each of Buyer and Sellers to consummate the transactions contemplated hereby
shall be subject to the fulfillment, prior to or at the Effective Time of the
Transaction, of each of the following conditions precedent, any one of which may
be waived by such entity:
7.01 CONSENTS AND APPROVALS. All approvals of, and consents by
all Governmental Entities and other persons, and all permits by and all
filings with and submissions to all such Governmental Entities and other
persons, as may be required for the consummation of the transactions
contemplated by this Agreement, shall have been obtained or made and
reasonably satisfactory evidence thereof shall have been received.
7.02 CERTAIN ACTIONS, ETC. There shall not have been instituted
and be continuing or threatened against Buyer, Sellers or the Company or any
of their respective directors or officers any action, suit or proceeding by
or before any Governmental Entity that would (a) restrain, prohibit or
invalidate, or result in the payment of substantial damages in respect of,
the Transaction or any other transaction contemplated by this Agreement or
(b) impose or confirm material limitations on the ability of Buyer
effectively to exercise full rights of ownership of the Company.
-22-
<PAGE>
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
Notwithstanding any other provision of this Agreement, the
obligation of Buyer to consummate the transactions contemplated hereby shall
be subject to the fulfillment, prior to or at the Effective Time of the
Transaction, of each of the following conditions precedent, any one of which
may be waived by Buyer:
8.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Sellers set forth in Article III shall be
true and correct in all material respects as of the date of this Agreement
and as of the Effective Time of the Transaction with the same effect as
though such representations and warranties had been made at and as of the
Effective Time of the Transaction except for such changes with respect
thereto which are contemplated by this Agreement or the passage of time.
8.02 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS.
Sellers and the Company shall have duly performed, complied with and
satisfied in all material respects all covenants, agreements and conditions
required by this Agreement to be performed, complied with or satisfied by
them at or prior to the Effective Time of the Transaction.
8.03 CLOSING CERTIFICATE. Buyer shall have received (a) a
certificate, dated the date of the Effective Time of the Transaction and
signed by Sellers, to the effect set forth in Sections 8.01 and 8.02 and (b)
such other certificates, instruments and documents as shall be reasonably
requested by Buyer for the purpose of verifying the accuracy of such
representations and warranties and the performance and satisfaction of such
covenants and conditions.
8.04 NON-COMPETE AGREEMENT. At or prior to the Effective Time of
the Transaction, Sellers shall have entered into a Non-Compete Agreement with
Buyer and the Company substantially in the form of EXHIBIT C hereto.
8.05 EMPLOYMENT AGREEMENTS. At or prior to the Effective Time of
the Transaction, each of Sellers shall have entered into an Employment
Agreement with Buyer in substantially the form of EXHIBIT D hereto.
8.06 LEGAL OPINION. Buyer shall have received from counsel to
Sellers, an opinion, dated the Closing Date, in form and substance
satisfactory to Buyer and its counsel substantially in the form attached
hereto as EXHIBIT E.
8.07 CONSENTS. All consents, approvals and waivers from
Governmental Entities and other third persons necessary to permit Sellers to
transfer and assign the Shares to Buyer as contemplated by this Agreement
shall have been obtained.
-23-
<PAGE>
8.08 DELIVERY OF ASSIGNMENTS. Sellers shall have executed,
acknowledged (if appropriate) and delivered to Buyer all assignments and such
other instruments of sale, transfer, conveyance, and assignment as Buyer and
its counsel may request.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
Notwithstanding any other provision of this Agreement, the obligations
of Sellers to consummate the transactions contemplated hereunder shall be
subject to the fulfillment, prior to or at the Effective Time of the
Transaction, of each of the following conditions precedent, any one of which may
be waived by Sellers.
9.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer set forth in Article IV shall be true
and correct in all material respects as of the date of this Agreement and as
of the Effective Time of the Transaction with the same effect as though such
representations and warranties had been made at and as of the Effective Time
of the Transaction except for such changes with respect thereto which are
contemplated by this Agreement or the passage of time.
9.02 PERFORMANCE OF COVENANTS, AGREEMENTS AND CONDITIONS. Buyer
shall have duly performed, complied with and satisfied all covenants,
agreements and conditions required by this Agreement to be performed,
complied with or satisfied by it, at or prior to the Effective Time of the
Transaction.
9.03 OFFICER'S CERTIFICATE. Sellers shall have received (a)
certificates, dated the date of the Effective Time of the Transaction and
signed by an authorized representative of Buyer, to the effect set forth in
Sections 9.01 and 9.02, and (b) such other certificates, instruments and
documents as shall be reasonably requested by Sellers for the purpose of
verifying the accuracy of such representations and warranties and the
performance and satisfaction of such covenants and conditions.
ARTICLE X
TERMINATION, AMENDMENTS AND WAIVER
10.01 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time of the Transaction:
(a) By mutual consent of Buyer and Sellers;
(b) By either Buyer or Sellers if the Transaction shall not
have been consummated on or before September 30, 2000;
-24-
<PAGE>
(c) By either Buyer or Sellers if there shall have been
entered or rendered against Sellers, the Company or any of the
Company's directors or officers in any action or proceeding
referred to in Section 7.02, an injunction or a judgment
having one of the effects specified in such Section;
(d) At Buyer's election, upon written notice from Buyer to
Sellers, if any one or more of the following events shall
occur and shall not have been remedied to the satisfaction of
Buyer within 15 days after written notice is delivered to
Sellers: (i) there shall have been any material breach of any
of the obligations, covenants, or warranties of Sellers
hereunder; or (ii) there shall have been any written
representation or statement furnished by Sellers hereunder
which at the time furnished is false or misleading; or
(e) At Sellers' election, upon written notice from Sellers to
Buyer, if any one or more of the following events shall occur
and shall not have been remedied to Sellers' satisfaction
within 15 days after written notice is delivered to Buyer: (i)
there shall have been any material breach of any of the
obligations, covenants, or warranties of Buyer hereunder; or
(ii) there shall have been any written representation or
statement furnished by Buyer hereunder which at the time
furnished is false or misleading.
10.02 EFFECT OF TERMINATION. If either Buyer or Sellers terminate
this Agreement as provided in the foregoing Section, this Agreement will
forthwith become void, and there will be no liability or obligation on the
part of Buyer or Sellers or their respective officers or directors except as
set forth in Sections 12.02 (relating to expenses) and 11.01 (relating to
confidentiality), and except to the extent that such termination results from
the breach by a party of any of its representations, warranties or agreements
in this Agreement.
10.03 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
10.04 WAIVER. Any term or provision of this Agreement may be
waived in writing at any time by Buyer, if it is entitled to the benefits
thereof, or by Sellers, if it is entitled to the benefits thereof.
-25-
<PAGE>
ARTICLE XI
OTHER AGREEMENTS; SURVIVAL
OF REPRESENTATIONS AND WARRANTIES
11.01 CONFIDENTIALITY. Except as may be required to comply with
applicable law and regulations or to obtain required regulatory approvals to
consummate this transaction, whether state, federal or foreign, and except as
required to obtain or comply with express obligations under this Agreement,
each of the parties hereto will use its best efforts to keep confidential any
and all information relating to this transaction and to one another and will
instruct its officers, employees and other representatives having access to
such information of such obligation of confidentiality. In the event the
transactions contemplated herein are not consummated, each of the parties
hereto shall return all documents, including any copies thereof, to the party
which provided the same.
11.02 PUBLIC ANNOUNCEMENTS. None of the parties hereto will make any
public announcement without prior approval of the other, except as may
otherwise be required by law or regulations.
11.03 ADDITIONAL AGREEMENTS. Subject to this Agreement, each of the
parties agrees to use its or his best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement. If at any time after
the Effective Time of the Transaction any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each corporation that is a party to this Agreement will take all
such necessary action.
11.04 AVAILABLE REMEDIES. Each party expressly agrees that, consistent
with its intention and agreement to be bound by the terms of this Agreement and
to consummate the transactions contemplated hereby, subject only to the
performance or satisfaction of conditions precedent, the remedy of specific
performance shall be available to a non-breaching and non-defaulting party to
enforce performance of this Agreement by a breaching or defaulting party,
including, without limitation, to require the consummation of the Closing
pursuant to Section 2.01.
11.05 INDEMNIFICATION.
(a) BY SELLERS. Sellers, jointly and severally, agree to
indemnify, defend and hold Buyer and its Affiliates harmless from and
against any and all losses, liabilities, claims, demands, damages,
costs and expenses (including reasonable attorneys' fees and
disbursements) of every kind, nature and description (collectively,
"Claims") sustained by Buyer or any of its Affiliates based upon,
arising out of or otherwise in respect of (i) the inaccuracy of any
representation or warranty of Sellers contained in this Agreement or in
any certificate, agreement, document or instrument delivered pursuant
to this Agreement, (ii) the breach of any covenant or agreement, of
Sellers contained in this Agreement or in any certificate, agreement,
document or instrument delivered pursuant to this Agreement;
-26-
<PAGE>
and (iii) any work performed, products sold or services provided by
the Company prior to the Effective Time of the Transaction except,
that Sellers shall have no liability pursuant to Section 11.05(a)(i)
for the first $15,000.00 of aggregate Claims (the "Buyer Basket").
(b) BY BUYER. Buyer agrees to indemnify, defend and hold
Sellers harmless from and against any and all Claims sustained by
Sellers based upon, arising out of or otherwise in respect of (i) the
inaccuracy of any representation or warranty of Buyer contained in this
Agreement or in any certificate, agreement, document or instrument
delivered pursuant to this Agreement, or (ii) the breach of any
covenant or agreement, of Buyer contained in this Agreement or in any
certificate, agreement, document or instrument delivered pursuant to
this Agreement; provided, however, that Buyer shall have no liability
pursuant to Section 11.05(b)(i) for the first $15,000.00 of aggregate
Claims (the "Sellers Basket").
(c) NOTIFICATION AND DEFENSE OF CLAIMS. Any party seeking
information or reimbursement for Claims hereunder (the "Indemnified
Party") shall as promptly as practicable notify the party from which
such indemnification is sought (the "Indemnifying Party") upon which
the Indemnified Party intends to base a claim for indemnification or
reimbursement hereunder; provided, however, that the failure of an
Indemnified Party so to notify the Indemnifying Party shall not relieve
the Indemnifying Party from any liability under this Agreement to the
Indemnified Party with respect to such Claim except to the extent the
Indemnifying Party is actually prejudiced or damaged by the failure to
receive timely notice. In the event of any claims for indemnification
or reimbursement, the Indemnifying Party, at its option, may assume
(with legal counsel reasonably acceptable to the Indemnified Party) the
defense of any claim, demand, lawsuit or other Proceeding brought
against the Indemnified Party, which claim, demand, lawsuit or other
Proceeding may give rise to the indemnity or reimbursement obligation
of the Indemnifying Party hereunder, and may assert any defense of any
party; provided, however, that the Indemnified Party shall have the
right at its own expense to participate jointly with the Indemnifying
Party in the defense of any claim, demand, lawsuit or other Proceeding
in connection with which the Indemnified Party claims indemnification
or reimbursement hereunder. Notwithstanding the right of an Indemnified
Party so to participate, the Indemnifying Party shall have the sole
right to settle or otherwise dispose of such claim, demand, lawsuit or
other Proceeding on such terms as the Indemnifying Party, in its sole
discretion, shall deem appropriate with respect to any issue involved
in such claim, demand, lawsuit or other Proceeding as to which (i) the
Indemnifying Party shall have acknowledged the obligation to indemnify
the Indemnified Party hereunder and the settlement is solely for cash
or (ii) the Indemnified Party shall have declined so to participate
and, in either case, the Indemnified Party is provided a full and
complete release of Claims.
(d) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the parties to this Agreement shall
survive the Closing Date and shall remain in full force and effect for
a period of three years following the Closing Date; provided,
-27-
<PAGE>
that the representations and warranties related to Tax matters shall
survive until the applicable statute of limitations for any potential
Tax liability has expired and representations and warranties related
to environmental claims shall survive indefinitely (the period during
which the representations and warranties shall survive being referred
to herein with respect to such representations and warranties as the
"Survival Period"), and shall be effective with respect to any
inaccuracy therein or breach thereof (and a claim for indemnification
under Section 11.05 hereof may be made thereon) if a written notice
asserting the claim shall have been duly given in accordance with
Article XI hereof within the Survival Period with respect to such
matter. Any claim for indemnification made during the Survival Period
shall be valid and the representations and warranties relating thereto
shall remain in effect for purposes of such indemnification
notwithstanding that such claim may not be resolved within the
Survival Period. All representations, warranties and covenants and
agreements made by the parties shall not be affected by any
investigation heretofore or hereafter made by and on behalf of any of
them and shall not be deemed merged into any instruments or agreements
delivered in connection with this Agreement or otherwise in connection
with the transactions contemplated hereby.
(e) EXCLUSIVE RIGHTS AND REMEDIES. The rights and remedies
provided in this Section 11.05 shall be the exclusive rights and
remedies, contractual or otherwise, of the indemnified Persons with
respect to breaches of the representations, warranties, covenants and
agreements contained in this Agreement.
11.06 ACTIONS OF THE PARTIES AFTER THE CLOSING. The parties hereto
agree that after the Closing, they will take the actions described in this
Section 11.06.
(a) Sellers acknowledges and agrees that from and after the
Closing, Buyer will be entitled to originals of all title
documents and copies of all other documents, books, records
(including tax records), agreements, and financial data of any
sort relating to the Company and its Business, affairs,
prospects, liabilities, obligations and assets.
(b) In the event and for so long as any party actively is
contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Business, the Company or the
properties and other assets of the Company, the other party
will to the extent reasonably practicable cooperate with the
contesting or defending party and its counsel in the contest
or defense, make available its personnel, and provide such
testimony and access to its books and records as shall be
necessary in connection with the contest or defense, all at
the sole cost and expense of the contesting or defending
party. However, with respect to any such information as to
which the contesting or defending party may reasonably assert
that the disclosure pursuant hereto would
-28-
<PAGE>
waive a privilege, the parties will use their reasonable
efforts to develop procedures to maintain such privilege.
(c) Sellers will not take any action that is designed or
intended to have the effect of discouraging any contractor,
lessor, licensor, customer, supplier, or other business
associate of the Company from maintaining the same business
relationships with Buyer after the Closing as it maintained
with the Company prior to the Closing. Sellers will refer all
customer inquiries relating to the Business to Buyer from and
after the Closing.
(d) Sellers agree that after the Closing Date any facts,
information, know-how, processes, trade secrets, customer
lists or confidential matters that relate in any way to the
Company shall be maintained in confidence and shall not be
divulged by Sellers to any party unless and until they shall
become public knowledge (other than by disclosure by Sellers
or the Company's officers, employees or agents) or as required
by law. Each of Sellers further agrees to use his best efforts
to ensure that none of the Company's officers, employees or
agents divulge any such confidential information to a third
party or use the same for the benefit of Sellers, any such
officer, employee or agent or any other third party, unless
and until it shall have become public knowledge (other than by
disclosure by Sellers or the Company's officers, employees or
agents). Buyer shall have the right to interview the Company's
employees for the purpose of obtaining information concerning
the Company and Sellers hereby waive any right, claim, or
cause of action, express or implied, which Sellers may have
against the Company or any of the Company's officers,
employees or agents by reason of any such officer, employee or
agent divulging to Buyer after the Closing Date any facts,
information, know-how, processes, trade secrets, customer
lists or similar confidential matters that relate to the
Company, the Business or the properties or other assets of the
Company.
ARTICLE XII
MISCELLANEOUS
12.01 CLOSING. Subject to the terms and conditions hereof, the closing
of the transactions contemplated hereby shall take place at the offices of the
Company, at 10:00 am., Central Daylight Time, on September 29, 2000, or at such
other place and time as the parties hereto shall agree.
12.02 EXPENSES. Except as otherwise provided herein, each party hereto
will pay its own costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby.
12.03 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered personally or
sent by telex, facsimile transmission,
-29-
<PAGE>
a nationally recognized overnight delivery service or registered or certified
mail (return receipt requested), postage prepaid, to the parties to this
Agreement at the following addresses or at such other address for a party as
shall be specified by like notice:
If to Buyer:
NESCO, Inc.
12331 East 60th Street
Tulsa, Oklahoma 74146
Attention: Eddy Patterson
with a copy to:
Conner & Winters, A Professional Corporation
3700 First Place Tower
Tulsa, Oklahoma 74103
Attention: Lynnwood R. Moore, Jr.
If to Sellers:
Atlanta Petroleum Equipment Company, Inc.
4732-E North Royal Atlanta Drive
Tucker, Georgia 30084
Attention: Robert G. Dutcher
with a copy to:
Wendy E. Belkin
234 Third Avenue
Decatur, Georgia 30030
All such notices and communications shall be deemed to have been received on
the date of delivery or on the third business day after the mailing thereof.
The parties hereto may change their respective addresses by notice in writing
given to the other party to this Agreement.
12.04 TIME. Time is of the essence of this Agreement.
12.05 ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the
schedules, documents and instruments referred to herein) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, written and oral. This
Agreement may only be amended by an instrument in writing duly executed by
Sellers and Buyer and all attempted oral waivers, notifications, and amendments
shall be ineffective.
-30-
<PAGE>
12.06 BINDING EFFECT; BENEFITS. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns. Nothing expressed or implied in this
Agreement is intended to or shall be construed to give any person other than
the parties to this Agreement or their respective successors or permitted
assigns any legal or equitable right, remedy or claim under or in respect of
this Agreement, it being the intention of the parties to this Agreement that
this Agreement shall be for the sole and exclusive benefit of such parties or
such successors or assigns and for the benefit of no other person.
12.07 ASSIGNMENT. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by any party to this Agreement without the prior written consent of
the other parties.
12.08 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma applicable to
contracts made and to be performed within that State, without regard to the
principles of conflicts of laws thereof.
12.09 ARTICLE AND SECTION HEADINGS. The article, section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
12.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be a single agreement.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date first written above.
"Buyer":
NESCO, Inc.
-------------------------------------------------------
Eddy Patterson, Chairman and Chief Executive Officer
"Sellers":
-------------------------------------------------------
Robert G. Dutcher
-31-
<PAGE>
-------------------------------------------------------
Raymond M. Delorenzo
-------------------------------------------------------
Bruce K. Patterson
-------------------------------------------------------
Scott E. Cathers
-32-
