Exhibit 10.1

 

STOCK PURCHASE AND SALE AGREEMENT

 

This STOCK PURCHASE AND SALE AGREEMENT (this “Agreement”) made on this 29th day
of December, 2005, by and among OMNI Energy Services Corp., a Louisiana
corporation (the “Buyer”), Preheat, Inc., a Louisiana corporation (the
“Company”), and the undersigned holders of 100% of the outstanding common stock
of the Company (the “Shareholders”).

 

WHEREAS, the Shareholders own in the aggregate 100% of the outstanding shares of
common stock, $.00 par value per share, of and equity interests in the Company
(“Company Common Stock”) and wish to sell and transfer to Buyer, which wishes to
purchase and acquire from the Shareholders, 100% of the outstanding shares of
Company Common Stock (the “Company Shares”) in return for certain cash
consideration as provided herein;

 

NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto agree as follows:

 

ARTICLE 1

PURCHASE AND SALE

 

1.1 Basic Transaction. Subject to the terms and conditions of this Agreement,
the Buyer agrees to purchase from each of the Shareholders, and each of the
Shareholder(s) agree(s) to sell and convey to the Buyer, all of the Company
Shares owned by such Shareholder, for the consideration specified in
Section 1.2.

 

1.2 Purchase Price. On the date of the closing of the transactions contemplated
by this Agreement, and in consideration for the delivery of the Company Shares,
the Buyer agrees to pay and deliver or cause to be paid and delivered to the
Shareholders and certain of their affiliates, an aggregate of Twenty-One Million
Seven Hundred Thousand and No/100 Dollars ($21,700,000.00) and to assume certain
long term debt not to exceed One Million Eight Hundred Sixty-Eight Thousand and
No/100 Dollars ($1,868,000.00) of certain long term debt (collectively, the
“Purchase Price”), in accordance with the following:

 

a. On the Closing Date, Buyer shall pay or cause to be paid and deliver to or
for the benefit of Shareholders Sixteen Million and No/100 ($16,000,000.00)
Dollars payable in cash, by wire transfer or other delivery of immediately
available funds (the “Closing Cash Payment”). The Closing Cash Payment shall be
allocated among the Shareholders in the manner set forth on Exhibit 1.2(a)
hereto.

 

b. On the Closing Date, as part of the Purchase Price, Buyer shall issue and
deliver to the Shareholders a promissory note made by Buyer in the original
principal amount of Two Million Six Hundred Sixty-Six Thousand Six Hundred
Sixty-Six and 66/100 ($2,666,666.66) Dollars which shall bear interest at a rate
of five (5%) percent per annum and shall have a term of twenty-four (24) months
from the Closing Date (“Seller Note No. 1”). In the event either Robert H.
Rhyne, Jr. or Brent Trauth resigns his employment with the Company or is
terminated for cause prior to the maturity date of

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Seller Note No. 1, Seller Note No. 1 shall be surrendered by Shareholders to
Buyer and cancelled by Buyer in which event Shareholders shall forfeit any and
all rights to the remaining unpaid balance of Seller Note No. 1.

 

c. On the Closing Date, as part of the Purchase Price, Buyer shall issue and
deliver to the Shareholders a promissory note made by Buyer in the original
principal amount of Five Hundred Thirty-Three Thousand Three Hundred Thirty
Three and 34/100 Dollars ($533,333.34) which shall bear interest at the rate of
five (5%) percent per annum and shall have a term of thirty-six (36) months from
the Closing Date (“Seller Note No. 2”). In the event either Robert H. Rhyne, Jr.
or Brent Trauth resigns his employment with the Company or is terminated for
cause prior to the maturity date of Seller Note No. 2, Seller Note No. 2 shall
be surrendered by Shareholders to Buyer and cancelled by Buyer in which event
Shareholders shall forfeit any and all right to the remaining unpaid balance of
Seller Note No. 2.

 

d. Seller Note No. 1 and Seller Note No. 2 shall be callable at any time at face
value by Buyer during the term of the notes. Seller Note No. 1 and Seller Note
No. 2 shall, at all times, be subordinate to Buyers senior lenders including any
replacement, substitute or refinance lenders. Buyers current senior lenders are
Webster Business Credit Corporation a New York corporation, General Electric
Capital Corporation, a Delaware corporation and ORIX Finance Corp., a Delaware
corporation.

 

e. Within thirty (30) days of the Closing Date, as part of the Purchase Price,
Buyer shall issue and deliver to the Shareholders 900,000 shares of the common
stock of Buyer (the “Closing Shares”) issued at $2.78 (the “Issue Share Price”).

 

f. On the Closing Date, the Buyer shall assume the current debt of the Company
outstanding at such time (the “Closing Assumption of Debt”). On the Closing
Date, the Company may only have the following (as referenced on the June 30,
2005 balance sheet) debt outstanding, which debt shall be current in payment and
shall not exceed One Million Eight Hundred Sixty-Eight Thousand and No/100
($1,868,000.00) Dollars: (i) IberiaBank Note #539494 not to exceed $810,000.00;
(ii) IberiaBank Note #5300099719 not to exceed $525,000.00, and (iii) C. Mann –
Mud Savers account payable not to exceed $533,000.00.

 

g. Notwithstanding the foregoing, Buyer shall deposit an Eight Hundred Thousand
Dollar ($800,000) promissory note or an equivalent amount of Buyers common stock
into an escrow account (the “Key Employee Escrow Account”) to be used as an
inducement to retain certain of Company’s key employees throughout the
thirty-six month term of Seller Note No. 2. A copy of the Key Employee Escrow
Agreement is attached hereto as Exhibit 1.2(g).

 

1.3 Closing. The closing of the transactions contemplated by this Agreement
(“Closing”) shall occur on or before January 31, 2006 (the “Closing Date”).

 

a. The execution and delivery of all documents necessary to enter into the
transactions contemplated by this Agreement shall take place at the offices of
Gordon,

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Arata, McCollam Duplantis & Eagan, L.L.P., 400 East Kaliste Saloom Road, Suite
4200, Lafayette, Louisiana 70508, or such other place as the parties may
mutually agree on the Closing Date.

 

b. At the Closing: (i) the Shareholders will deliver the various certificates,
instruments, and documents referred to in Section 4.1 below; (ii) Buyer will
deliver the various certificates, instruments, and documents referred to in
Section 4.2 below; (iii) the Buyer shall deliver to the Shareholders the
Purchase Price as described in Sections 1.2(a), 1.2(b), 1.2 (c) and 1.2 (e);
(iv) each Shareholder will deliver the certificates representing such
Shareholder’s shares of Company Common Stock together with completed stock
powers transferring the shares to Buyer duly executed by such Shareholder
(collectively, the “Stock Certificates”); and (v) Shareholders shall fund the
Key Employee Escrow Account.

 

1.4 No Assignments. No assignment, transfer or other disposition of record or
beneficial ownership of any shares of Company Common Stock may be made on or
after the date hereof prior to Closing or termination of this Agreement.

 

1.5 Payment in Full Satisfaction of All Rights. The delivery of the Purchase
Price consisting of the Closing Cash Payment, Seller Note No.1, Seller Note
No. 2, the Closing Shares and the Closing Assumption of Debt shall be deemed to
be payment in full satisfaction of all rights pertaining to the outstanding
Company Common Stock.

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

 

2.1 Representations and Warranties by the Shareholders. Each of the Shareholders
represents and warrants, severally but not jointly, to the Buyer that the
statements contained in this Section 2.1 are correct as to himself as of the
date of this Agreement and will be correct as to himself as of the Closing Date
and (as though made then), except as set forth in the disclosure schedule
delivered by the Shareholders to the Buyer on the date hereof, as supplemented
or amended in accordance with Section 3.4 of this Agreement (such schedule, as
so supplemented or amended, the “Shareholders Disclosure Schedule”). The
Shareholders Disclosure Schedule is arranged in sections and paragraphs
corresponding to the lettered and numbered sections and paragraphs contained in
this Section 2.1. References in Section 2.1 to a numbered schedule mean the
section of the Shareholders Disclosure Schedule that corresponds with that
number; for example, references to “Schedule 2.1(d)” mean Section 2.1(d) of the
Shareholders Disclosure Schedule. Notwithstanding anything herein to the
contrary, each matter disclosed in either the Shareholders Disclosure Schedule
or the Company Disclosure Schedule shall be deemed responsive to all other
Sections of the Agreement to which disclosure is required by the Shareholders
and/or the Company; provided, however, that the responsiveness of such a
disclosure matter to another Section of the Agreement and/or disclosure schedule
is obvious.

 

a. Qualification. Such Shareholder has the legal power and authority to own his
or her properties and assets.

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b. Authority Relative to Agreement. Such Shareholder has the full right, power
and legal authority to execute and deliver this Agreement. Such Shareholder has
the full right, power and legal authority to perform this Agreement and to
consummate the transactions contemplated on his or her part hereby. No
proceeding on the part of such Shareholder, and no notice, consent,
authorization, order or approval of, filing or registration with, any
governmental commission, board or other regulatory body or any bank, bonding
company, lender, surety, customer, supplier, or any other person or entity
whatsoever is required for or in connection with the execution and delivery of
this Agreement by such Shareholder. No proceeding on the part of such
Shareholder, and no notice, consent, authorization, order or approval of, filing
or registration with, any governmental commission, board or other regulatory
body or any bank, bonding company, lender, surety, customer, supplier, or any
other person or entity whatsoever is required for or in connection with the
performance by such Shareholder of this Agreement and the consummation by such
Shareholder of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by such Shareholder and is a valid and binding
agreement of such Shareholder, enforceable against such Shareholder in
accordance with its terms, except as such enforcement is subject to the effect
of any applicable bankruptcy, insolvency, reorganization or similar laws
relating to or affecting creditors’ rights.

 

c. Non-Contravention. The execution, delivery and performance of this Agreement
by such Shareholder does not, and the consummation by such Shareholder of the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation, or acceleration of
any obligation or to the loss of a material benefit under, or result in the
creation or imposition of any material lien, charge, pledge, security interest
or other encumbrance upon any of the property or assets of such Shareholder
pursuant to any provision of, any mortgage, lien, lease, agreement, license,
instrument, law, ordinance, regulation, order, arbitration award, judgment or
decree to which such Shareholder is a party or by which any of such
Shareholder’s assets are bound. The execution, delivery and performance of this
Agreement by such Shareholder does not and the consummation by such Shareholder
of the transactions contemplated hereby will not violate or conflict with any
other restriction of any kind or character to which such Shareholder is subject
or by which any of such Shareholder’s assets may be bound.

 

d. Ownership of Company Common Stock. Such Shareholder holds of record and owns
beneficially the number of and percentage of shares of Company Common Stock set
forth next to his or her name in Schedule 2.1(d). Such Shareholder is, and as of
the Closing Date, will be the sole and exclusive lawful owner of such shares of
Company Common Stock free and clear of all liens, claims, encumbrances and
rights of others of any nature whatsoever, with full power to vote all such
shares on any matter that may properly come before shareholders of the Company,
and such Shareholder may exercise such voting power on any matter without
violation of the rights of any person. There are no rights, warrants or options
outstanding with respect to such common stock, and such Shareholder has no
obligation to deliver common stock of the Company or any of its Subsidiaries (as
defined below) to any person as of the date hereof, at any time on or prior to
either of the Closing Date, thereafter or as a result thereof or in connection
therewith except as provided in this Agreement.

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2.2 Representations and Warranties by the Shareholders and the Company. The
Shareholders, in the aggregate, represent and warrant, solidarily, to the Buyer
that the statements contained in this Section 2.2 are correct as of the date of
this Agreement and will be correct as of the Closing Date (as though made then),
except as otherwise set forth in the disclosure schedule delivered by the
Shareholders and the Company to the Buyer on the date hereof, as supplemented or
amended in accordance with Section 3.4 of this Agreement (such schedule, as so
amended or supplemented, the “Company Disclosure Schedule”). The Company
Disclosure Schedule is arranged in sections and paragraphs corresponding to the
lettered and numbered sections and paragraphs contained in this Section 2.2.
References in Section 2.2 to a numbered schedule mean the section of the Company
Disclosure Schedule that corresponds with that number; for example, references
to “Schedule 2.2(a)” mean Section 2.2(a) of the Company Disclosure Schedule.
Notwithstanding anything herein to the contrary, each matter disclosed in either
the Shareholders Disclosure Schedule or the Company Disclosure Schedule shall be
deemed responsive to all other Sections of the Agreement to which disclosure is
required by the Shareholders and/or the Company; provided, however, that the
responsiveness of such a disclosure matter to another Section of the Agreement
and/or disclosure schedule is facially apparent.

 

a. Organization and Qualification, etc. The Company is a corporation (or limited
liability company) duly organized, validly existing and in good standing under
the laws of the State of Louisiana, has the full right, power and legal
authority and all licenses, permits, titles and authorizations necessary to own
all of its properties and assets and to carry on its business as it is now being
conducted. The copies of the Company’s Articles of Incorporation, Articles of
Organization, Bylaws and Operating Agreement, as amended to date, which have
been delivered to Buyer are complete and correct, and such instruments, as so
amended, are in full force and effect. The Company is duly qualified to do
business and is in good standing in each jurisdiction where, to the reasonable
belief of the Company, the failure to be so qualified would have a material
adverse effect on the Company, which foreign jurisdictions are listed in
Schedule 2.2(a).

 

b. Common Stock. The authorized common stock of the Company consists of 5,000
shares of Company Common Stock, of which 120 shares of Company Common Stock are
validly issued and of which 80 shares are outstanding, fully paid and
non-assessable. All 80 issued and outstanding shares are held of record by the
Shareholders. 40 Shares are held in treasury. The Company will not issue any
additional shares of Company Common Stock between the date hereof through the
Closing Date. No shares of the common stock of the Company have been issued in
violation of the preemptive rights of any past or present shareholder. As of
Closing, there shall be no outstanding subscriptions, shares of common stock,
calls, warrants, options, contracts, commitments, or demands relating to the
common stock of the Company or other agreements of any character under which the
Company would be obligated to issue or purchase shares of its common stock. As
of Closing, there shall be no outstanding stock appreciation, phantom stock,
profit participation or similar rights with respect to the Company. As of
Closing, there is no voting agreement, voting trust, proxy, or other agreement
or understanding

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with respect to the voting of the common stock or the equity interests of the
Company. The Company has no commitments to issue or sell any securities or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire from the Company, any shares of its common stock and
no securities or obligations evidencing any such rights are outstanding.

 

c. Subsidiaries. The Company does not, directly or indirectly, own or control
more than ten percent (10%) of the voting securities, or serve as manager or
general partner, of any corporation, firm, partnership, joint venture or other
business entity (“Subsidiary”). Neither the Company nor any Subsidiary owns or
has any right or obligation to acquire any class of securities (including,
without limitation, debt securities) issued by any person or entity and neither
the Company nor any Subsidiary is a party to or bound to any partnership, joint
venture, voluntary association, or other agreement with any person or entity for
the conduct of any business.

 

d. Authority Relative to Agreement. The Company has the full right, power, and
legal authority to execute and deliver this Agreement. The Company has the full
right, power, and legal authority to perform this Agreement and to consummate
the transactions contemplated on the part of the Company hereby. The execution
and delivery by the Company of this Agreement and the consummation by the
Company of the transactions contemplated on its part hereby have been duly
authorized by its Board of Directors and the Shareholders in their capacity as
the holders of 100% of the issued and outstanding common stock in the Company.
No proceeding on the part of the Company, and, no notice, consent,
authorization, order or approval of, filing or registration with, any
governmental commission, board or other regulatory body, or any bank, bonding
company, lender, surety, customer, supplier, or any other person or entity
whatsoever is required for or in connection with the Company’s execution and
delivery of this Agreement. This Agreement has been duly executed and delivered
by the Company and is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as such enforcement is
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws relating to or affecting creditors’ rights.

 

e. Non-Contravention. The execution, delivery, and performance of this Agreement
by the Company does not and the consummation by the Company of the transactions
contemplated hereby will not (1) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, government agency, or court to which the Company or any of
its assets is subject, (2) violate any provision of the Articles of
Incorporation or Bylaws of the Company, or (3) violate or result in, with the
giving of notice or the lapse of time or both, the violation of any provision
of, or result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or lapse of time or both) any obligation under, or
result in the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any of the property of the Company pursuant
to any provision of any mortgage, lien, lease, contract, agreement, license, or
instrument to which the Company is a party or by which any of its assets are
bound. The execution, delivery and performance of this Agreement by the Company
does not, and will not, violate or conflict

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with any other restriction of any kind or character to which the Company is
subject or by which any of its assets may be bound, and the same does not, and
will not, constitute an event permitting termination of any such mortgage, lien,
lease, agreement, license or instrument to which the Company is a party or by
which any of its assets are bound.

 

f. Financial Information. The Shareholders have previously furnished Buyer with
true and complete copies of the balance sheets of the Company and its
Subsidiaries, as applicable, for the two calendar years ended December 31, 2004
and the related statements of income, retained earnings and cash flows for the
twenty-four (24) months then ending. These 2003 and 2004 financial statements
were audited by Arsement, Redd & Morella LLC, certified public accountants.
Shareholders have also furnished Buyer with true and complete copies of the
unaudited financial compilations for the nine (9) months ended September 30,
2005. Such financial statements have been prepared in conformity with GAAP
consistently applied. Such financial statements present fairly the financial
position and results of operations of the Company and its consolidated
Subsidiaries as of and for the respective periods then ended. The Company and
its Subsidiaries do not have any liabilities or obligations of a type which
should be included in or reflected as such in financial statements prepared in
accordance with GAAP, whether related to tax or non-tax matters, accrued or
contingent, due or not yet due, liquidated or unliquidated, or otherwise, except
as and to the extent disclosed or reflected in such financial statements.
Collectively, the financial statements are the “Company Financial Statements.”
Copies of the Company Financial Statements are attached as Schedule 2.2(f).

 

g. Absence of Certain Changes or Events. Since December 31, 2004, except to the
extent described in Schedule 2.2(g) of the Company Disclosure Schedule, and
except as expressly permitted by this Agreement or in connection with the
transactions contemplated hereby:

 

(1) the Company has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible, other than for a fair consideration in the
ordinary course of business;

 

(2) the Company has not entered into any agreement, contract, lease, permit or
license (or series of related agreements, contracts, leases, permits and
licenses) either involving more than $10,000 or outside the ordinary course of
business;

 

(3) no party (including the Company) has breached, accelerated, terminated,
modified, or canceled any agreement, contract, lease, permit or license (or
series of related agreements, contracts, leases, permits and licenses) involving
more than $10,000 to which the Company is a party or by which it is bound
(“Company Contracts”);

 

(4) the Company has not imposed or allowed any lien, encumbrance or security
interest to be placed upon any of its assets, tangible or intangible (other than
the Permitted Exceptions, as defined below);

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(5) the Company has not made any capital expenditure (or series of related
capital expenditures) either involving more than $10,000 or outside the ordinary
course of business;

 

(6) the Company has not made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other corporation, partnership,
limited liability company or other person (or series of related capital
investments, loans, and acquisitions) either involving more than $10,000 or
outside the ordinary course of business;

 

(7) the Company has not issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than $10,000;

 

(8) the Company has not delayed or postponed the payment of accounts payable and
other liabilities outside the ordinary course of business;

 

(9) the Company has not canceled, compromised, satisfied, settled, waived, or
released any right or claim (or series of related rights and claims) either
involving more than $10,000 or outside the ordinary course of business;

 

(10) the Company has not granted any license or sub-license of any rights under
or with respect to any Intellectual Property (as defined in Section 2.2(l)
below);

 

(11) there has been no change made or authorized in the Articles of
Incorporation, Bylaws, Articles of Organization or Operating Agreement of the
Company;

 

(12) the Company has not issued, sold, or otherwise disposed of any of its
equity or common stock, or granted any options, warrants, rights of first
refusal, or other rights to purchase or obtain (including upon conversion,
exchange, or exercise) any of its equity or common stock;

 

(13) the Company has not declared, set aside, or paid any dividend or made any
distribution with respect to its equity interests or common stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of its equity
interests or common stock;

 

(14) the Company has not experienced any damage, destruction, or loss to its
property in excess of $10,000 which is not covered by insurance;

 

(15) the Company has not made any loan to, or entered into any other transaction
with, any of its directors, officers, managers, shareholders and employees
outside the ordinary course of business;

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(16) the Company has not entered into any employment contract or collective
bargaining agreement, written or oral, or modified the terms of any existing
such contract or agreement;

 

(17) the Company has not granted any increase in compensation to any of its
directors, officers, employees, consultants or agents in excess of five percent
of such person’s base compensation;

 

(18) the Company has not adopted, amended, modified, or terminated any bonus,
stock option, profit-sharing, incentive, severance, or other benefit plan,
contract, or commitment for the benefit of any of its directors, officers,
managers, Shareholders and employees (or taken any such action with respect to
any other employee benefit plan);

 

(19) the Company has not made any other change in employment terms for any of
its directors, officers, managers and employees outside the ordinary course of
business;

 

(20) the Company has not made or pledged to make any material charitable or
other contribution outside the ordinary course of business;

 

(21) except for Hurricanes Katrina and Rita there has not been any other
occurrence, event, incident, action, failure to act, or transaction outside the
ordinary course of business involving the Company which could have a material
adverse effect on its assets or its business;

 

(22) except for Hurricanes Katrina and Rita there has not been any material
adverse change in the business, financial condition, operation, results of
operation, or future prospects of the Company;

 

(23) except for Hurricanes Katrina and Rita there have not been any work
interruptions, or labor grievances or employee claims filed against the Company,
within the last five (5) years;

 

(24) there has not been any merger or consolidation or agreement to merge or
consolidate with or into any other corporations or entity;

 

(25) there has not been any material devaluation of inventory due to
obsolescence, deterioration, or pilferage. All inventory on hand and held for
resale is good and saleable merchandise except as disclosed on Section 2.2(g);

 

(26) there has not been any transfer to Shareholder or other third party of any
tangible or intangible property, which is not disclosed in the Financial
Statements.

 

(27) the Company has good and merchantable title to all inventory in the actual
or constructive possession of the Company and is valued on the books and records
of the Company at an amount not greater than the lower of its cost or market
value;

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(28) the Company has not experienced any products liability claims in the past
three (3) years;

 

(29) other than activities in accordance with normal industry business
practices, including but not limited to, by way of example, gifts of minimal
value, entertainment, meals and social invitations, neither the Company nor any
Shareholder, has, directly or indirectly (a) made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other payment to any person,
private or public, regardless of form, whether in money, property, or services:
(i) to obtain favorable treatment for business secured; (ii) to pay for
favorable treatment for business secured; (iii) to obtain special concessions or
for special concessions already obtained, for or in respect of the Company or
any Affiliate of the Company; or (iv) in violation of any Applicable Law; or
(b) established or maintained any fund or asset that has not been recorded in
the books and records of the Company; and

 

(30) the Company has not committed, orally or in writing, to do any of the
foregoing.

 

“Permitted Exceptions” shall mean (i) liens, mortgages, pledges, security
interests or other encumbrances securing indebtedness of the Company, with
respect to which no default (or event which with notice or lapse of time or both
would constitute a default) exists, a correct and complete list of which is set
forth on Schedule 2.2(g)(i) of the Company Disclosure Schedule; (ii) liens for
taxes and assessments not yet due and payable; (iii) liens for taxes,
assessments and charges and other claims, the validity of which the Company or
the Shareholders are contesting in good faith, by appropriate proceedings, a
correct and complete list of which is set forth on Schedule 2.2(g)(iii); and
(iv) minor imperfections of title, none of which, individually or in the
aggregate, adversely affects the operation, value, use or enjoyment of the
affected asset or property.

 

h. Undisclosed Liabilities. Except as set forth on Schedule 2.2(h), the Company
has no liabilities (and there is no known basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against the Company or its Subsidiaries giving rise to any liability),
except for (i) liabilities set forth on the face of the Company Financial
Statements (including the notes thereto) and (ii) liabilities which have arisen
after December 31, 2004, in the ordinary course of business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement, or violation of
law).

 

i. Permits and Legal Compliance. The Company has all permits, licenses, orders,
qualifications, and approvals of all governmental and regulatory authorities
material to the conduct of their business, a correct and complete list of which
is set forth in Schedule 2.2(i). All such permits, licenses, orders and
approvals are in full force and effect, and no suspension or cancellation of any
of them is pending or threatened. None

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of such permits, licenses, orders or approvals, and no application for any of
such permits, licenses, orders or approvals, will be adversely affected by the
consummation of the transactions contemplated by this Agreement. To the best of
the Shareholders’ and Company’s knowledge, information and belief, the Company
has complied with all Applicable Laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all agencies thereof),
and no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced against the Company
alleging any failure so to comply.

 

j. Title to Properties; Absence of Liens and Encumbrances, etc. The Company has
good and marketable title to all of the real, tangible personal and mixed
properties and assets owned by it and used in its business, free and clear of
any liens, charges, pledges, mortgages, conditional sales contracts, security
interests or other encumbrances (other than Permitted Exceptions). A correct and
complete list of all such properties and assets (other than properties and
assets described in Sections 2.2(k), 2.2(l), 2.2 (m), 2.2(m)(1) and 2.2(m)(2)
with a historical cost in excess of $5,000 is set forth on Schedule 2.2(j). The
properties and assets of the Company are free and clear of any liens, charges,
pledges, mortgages, conditional sales contracts, security interests or other
encumbrances (other than Permitted Exceptions).

 

k. Software. Schedule 2.2(k) contains a list or description by type of all
operating and applications computer programs and data bases (“Software”) which
the Company uses or has available for use and plans to use, and such Software
constitutes all the Software which is used to operate the business of the
Company as currently conducted. All such Software is owned outright by the
Company except as indicated on Schedule 2.2(k). As to any Software which
Schedule 2.2(k) indicates is not owned by the Company, the owner of such
Software is identified on Schedule 2.2(k), and the Company has the right to use
the same pursuant to valid leases or licenses therefor. To the best of
Shareholder’s and Company’s knowledge, information and belief, none of the
Software used by or available to the Company, and no use thereof, infringes upon
or violates any patent, copyright, trade secret or other proprietary right of
anyone else and no claim with respect to any such infringement or violation is
known to be threatened.

 

l. Patent, Trademark, etc. Claims. The Company is the owner or licensee of all
patents, patent licenses, trademarks/service marks/trade names,
trademark/service mark/trade name registrations, copyrights, and copyright
registrations or any other intellectual property (“Intellectual Property”) used
in the operation of the Company’s business as presently conducted and purported
to be owned or licensed by it; and a correct and complete list of such
Intellectual Property is set forth in Schedule 2.2(l) of the Company Disclosure
Schedule. Each item of Intellectual Property owned or used by the Company
immediately prior to the Closing will be owned or available for use by the
Company on the same terms and conditions immediately after the Closing. The
Company owns or has the right to use all such Intellectual Property. To the best
of Shareholder’s and Company’s knowledge, information and belief after due
inquiry, the Company has not infringed, and is not now infringing, on any trade
name, trademark, service mark, or copyright belonging to any other person, firm
or corporation and has not

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received any notice of such infringement. The Company is not a party to any
license, sub-license, agreement or arrangement pursuant to which the Company
uses Intellectual Property except as shown in Schedule 2.2(l). With respect to
each such license, sub-license, agreement or arrangement set forth in Schedule
2.2(l):

 

(1) the license, sub-license, agreement or arrangement covering the item is
legal, valid, binding, enforceable, and in full force and effect;

 

(2) the license, sub-license, agreement or arrangement will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms immediately following the Closing;

 

(3) no party to such license, sub-license, agreement or arrangement is in breach
or default, and no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination, modification or
acceleration thereunder; and

 

(4) no party to the license, sub-license, agreement or arrangement has
repudiated any provision thereof.

 

Each of the Company and its Subsidiaries owns, or holds adequate licenses or
other rights to use, its trade names in the business as now conducted by it, and
such use does not, and will not, conflict with, infringe on, or otherwise
violate any rights of others. The Shareholders have delivered to Buyer correct
and complete copies of all such licenses, sub-licenses agreements and
arrangements (as amended to date) disclosed on Schedule 2.2(l).

 

m. List of Properties, Contracts and Other Data. The Company owns or leases all
property and tangible or intangible assets used in the conduct of its business
as presently conducted. Except as reflected in such Schedule 2.2(m), all of the
property of the Company is in existence and is in good condition and repair,
except for reasonable wear and tear, sufficient to conduct the business of the
Company as it is presently being conducted, and in conformity in all material
respects with all restrictive covenants, building, zoning, OSHA, safety, or
other applicable ordinances, restrictions, regulations, or laws. Except for the
warranties expressly set forth in this Section 2.2(m), the Company and the
Shareholders make no other representations concerning the condition of said
movable property. Schedule 2.2(m)(1) and Schedule 2.2(m)(2) contain a list
setting forth, with respect to the Company as of the date hereof, the following:

 

(1) Schedule 2.2(m)(1) of the Company Disclosure Schedule lists and describes
briefly all real property owned by the Company and all real property leased or
subleased by or to the Company (whether as lessor or as lessee). The
Shareholders have delivered to the Buyer correct and complete copies of the
leases and subleases listed in Schedule 2.2(m)(1) (as amended to date). With
respect to each lease and sublease listed in Schedule 2.2(m)(1);

 

(i) the lease or sublease is legal, valid, binding, enforceable, and in full
force and effect;

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(ii) the lease or sublease will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms immediately
following the consummation of the transactions contemplated hereby;

 

(iii) no party to the lease or sublease is in breach or default of any material
term or provision, and to the best of Shareholders’ and Company’s knowledge no
event has occurred which, with notice or lapse of time, or both, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;

 

(iv) no party to the lease or sublease has repudiated any provision thereof;

 

(v) except as described on Schedule 2.2(m)(1), there are no disputes, oral
agreements, or forbearance programs in effect as to the lease or sublease;

 

(vi) to the best of Shareholders’ and Company’s knowledge, information and
belief after due inquiry, with respect to each sublease, the representations and
warranties set forth in subsections (i) through (v) above are correct and
complete with respect to the underlying lease;

 

(vii) the Company has not assigned, transferred, conveyed, mortgaged, deeded in
trust, or encumbered any interest in the leasehold or subleasehold;

 

(viii) neither the Shareholders nor the Company has received any notices from
any governmental authority as to any violations or alleged violations of any
applicable laws, rules and regulations with respect to facilities leased or
subleased by the Company or as to any unfulfilled legal requirements in
connection with the operation thereof and, such facilities have been operated
and maintained in all material respects in accordance with applicable laws,
rules and regulations; and

 

(ix) all facilities leased or subleased thereunder are supplied with utilities
and other services necessary for the operation of the Company at such
facilities.

 

(2) Schedule 2.2(m)(2) of the Company Disclosure Schedule lists and describes
briefly all contracts and commitments (including, without limitation, mortgages,
indentures and loan agreements) to which the Company is a party, or to which it
or any of its assets or properties are subject and which are not specifically
referred to elsewhere in Section 2.2, provided that there need not be listed in
the Company Disclosure Schedule (unless required pursuant to the

--------------------------------------------------------------------------------

preceding subsections of this Section 2.2(m)) any contract or commitment
incurred in the ordinary course of business which requires payments to or by the
Company during its remaining life aggregating less than $25,000 or which is
terminable by the Company within thirty days without payment of a premium or
penalty.

 

Correct and complete copies of all documents, and descriptions complete in all
material respects of all oral agreements or commitments (if any), referred to in
this Section 2.2(m) have been provided to Buyer or its counsel. None of the
Company and the Shareholders has been notified of any claim that any contract
listed in Schedule 2.2(m)(2) of the Company Disclosure Schedule is not valid and
enforceable in accordance with its terms for the periods stated therein, or that
there is under any such contract any existing material default or event of
default or event which with notice or lapse of time or both would constitute
such a default.

 

n. Use of Real Property. None of the Shareholders and the Company has received
notice of violation of any applicable restrictive covenant, zoning or building
regulation, ordinance or other law, order, regulation, restriction or
requirement relating to the operations of the Company, or any notice of default
under any material lease, contract, commitment, license or permit, relating to
the use and operation of the owned or leased real property listed in the Company
Disclosure Schedule. None of the Shareholders and the Company has received
notice that any plant, facility or other building which is owned or covered by a
lease set forth in the Company Disclosure Schedule does not substantially
conform in all material respects with all applicable ordinances, codes,
regulations and requirements, and none of the Shareholders and the Company has
received notice that any restriction, law or regulation presently in effect or
condition precludes or restricts continuation of the present use of such
properties.

 

o. Environmental Laws. To the best of its knowledge, the Company, including,
without limitation, its businesses, facilities, property, and equipment has been
and is currently in compliance, in all material respects, with all applicable
federal, state, and local laws, rules, and regulations of all authorities,
including without limitation, applicable Environmental Laws (as hereinafter
defined). To the best of its knowledge, the Company has, and is and has been in
compliance with, all permits, certificates, licenses and other authorizations
required to operate its business, facilities, property, and equipment in
compliance with applicable Environmental Laws (“Environmental Permits”), if any,
including, without limitation, any relating to the generation, processing,
treatment, discharge, storage, transport, disposal, or other management of
Hazardous Substances (as hereinafter defined) and those relating to the
protection of environmentally sensitive areas and has timely filed all
applications for renewal of the same. To the best of Shareholder’s and Company’s
knowledge, information and belief, the Company is not now, and will not be in
the future, as a result of the operation or condition of the business of the
Company on or prior to the date of Closing, subject to any: (a) liability in
connection with any release or threatened release of any Hazardous Substance
into the environment whether on or off any of its businesses, facilities,
premises, properties, or equipment; (b) reclamation, decontamination, removal,
investigation, remediation or monitoring requirements under Environmental Laws,
or any

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reporting requirements related thereto; or (c) consent order, compliance order
or administrative order relating to or issued under any Environmental Law. There
are no, nor have there been any, claims, demands, actions, judgments, notices,
proceedings, liens, or liabilities brought, pending or threatened against the
Company, or any of its businesses, facilities, properties, premises or equipment
relating in any manner to actual or alleged non-compliance with Environmental
Laws, harm to the environment, or the release, threatened release, disposal,
presence, handling, discharge or storage of or exposure to or damage caused by
Hazardous Substances (“Environmental Claims”) as of the Closing Date. To the
knowledge of the Shareholders, no requirement of Environmental Laws will require
future compliance costs on the part of the Company in excess of Ten Thousand
Dollars ($10,000) above costs currently expended in the ordinary course of
business. There are no obligations, undertakings or liabilities of any other
person or entity, including without limitation, any predecessor-in-interest,
arising out of or relating to Environmental Laws, which the Company has agreed
to, assumed or retained, by contract or otherwise, except as set forth in
Schedule 2.2(o). “Environmental Laws” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act of 1976, the Clean Air Act, the Clean Water Act, and the
Occupational Safety and Health Act of 1970, each as amended, together with all
other laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof) concerning pollution, the
environment, public or worker health and safety or a community’s right to know
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, hazardous substances, hazardous materials,
hazardous wastes, solid wastes, toxic substances, extremely hazardous substance,
hazardous chemical, oil, or petroleum (or any fraction or constituent thereof)
(as each of the foregoing items is defined, listed or regulated under
Environmental Laws) and such other materials, wastes or substances that are or
become classified or regulated as hazardous or toxic under Environmental Laws
(collectively, “Hazardous Substances”) in ambient or indoor air, surface water,
ground water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Substances.

 

p. Litigation. Except as provided on Schedule 2.2(p), the Company has not been
served with notice with respect to any demands, actions, suits, audits,
investigations, unfair labor practices charges, complaints, claims, grievances,
proceedings, audits or investigations with respect to the Company pending
against the Company at law or in equity, or before or by any federal, state,
municipal, foreign or other governmental department, commission, board, bureau,
agency or instrumentality, nor are there any such demands, actions, suits,
audits, investigations, unfair labor practices charges, complaints, claims,
grievances, or proceedings that are known to be threatened against the Company.

 

q. Labor and Employment Matters. Schedule 2.2(q) of the Company Disclosure
Schedule sets forth all collective bargaining agreements, employment and
consulting agreements (other than consulting agreements terminable by the
Company within sixty (60) calendar days without payment of a premium or a
penalty), executive compensation plans, bonus plans, deferred compensation
agreements, employee pension

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plans or retirement plans, employee profit sharing plans, employee stock
purchase and stock option plans, group life insurance, hospitalization insurance
or other plans or arrangements providing for benefits to employees of the
Company.

 

(1) Neither the Company nor any of the Shareholders has received notice of any
controversies between the Company and any employees or any unresolved labor
union grievances or unfair labor practice or labor arbitration proceedings
pending or threatened, related to the Company, and there are not any
organizational efforts presently being made or threatened in an organized
fashion involving any of the employees of the Company.

 

(2) None of the Shareholders and the Company has received notice of any claim
that it has not complied with any laws relating to the employment of labor,
including any provisions thereof relating to wages, hours, collective
bargaining, the payment of social security and similar taxes, equal employment
opportunity, employment discrimination and employment safety, or that it is
liable for any arrears of wages or any taxes or penalties for failure to comply
with any of the foregoing.

 

(3) Schedule 2.2(q)(3) of the Company Disclosure Schedule sets forth the current
annual compensation (or basis thereof) of all employees of the Company (by
position or by department) as of September 15, 2005.

 

r. Accounts Receivable. All notes and accounts receivable of the Company are
reflected properly on its books and records, are valid receivables subject to no
setoffs or counterclaims (except as clearly indicated in the Company Financial
Statements or as set forth in Schedule 2.2(r)). All of such notes and accounts
receivable are current and collectible as of the date hereof, and each of such
notes and accounts receivable will be collected at their recorded amounts,
subject to normal adjustments, none of which are material in amount. Schedule
2.2(r) sets forth a complete and accurate list of all notes and accounts
receivable as of September 15, 2005, which list indicates the aging of such
notes and accounts receivable.

 

s. Insurance. Schedule 2.2(s) sets forth the following information with respect
to each insurance policy (including policies providing property, casualty,
liability, and workers’ compensation coverage, bond and surety arrangements and
Directors and Officers liability) to which the Company has been a party, a named
insured, or otherwise the beneficiary of coverage at any time within the past
two (2) years (except as to insurance policies owned by third party vendors,
contractors and clients of the Company which have contractually named the
Company as insured or provided other benefits of coverage as a result of
contractual liability coverage, which policies need not be listed on Schedule
2.2(s) but shall be made available for inspection by Buyer’s representatives):

 

(1) the name, address, and telephone number of the agent;

 

(2) the name of the insurer, the name of the policyholder, and the name of each
covered insured;

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(3) the policy number and the period of coverage;

 

(4) the scope (including an indication of whether the coverage was on a claims
made, occurrence, or other basis) and amount (including a description of
deductibles and ceilings of coverage); and

 

(5) a description of any retroactive or “swing” premium adjustments or other
loss-sharing arrangements.

 

To the best of Shareholder’s and Company’s knowledge, information and belief
after due inquiry, with respect to each such insurance policy owned by the
Company: (A) the policy is legal, valid, binding, enforceable, and in full force
and effect with respect to the periods and risks which such policy purports to
insure; (B) the policy will continue to be legal, valid, binding, enforceable,
and in full force and effect in accordance with its terms on the same terms
immediately following the consummation of the transactions contemplated hereby;
(C) the Company is not in breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has occurred which,
with notice or the lapse of time, would constitute such a breach or default, or
permit termination, modification, or acceleration, under the policy; and (D) no
party to the policy has repudiated any provision thereof. The Company has been
covered during the past five years by insurance similar in scope and amount
customary and reasonable for the businesses in which it has engaged during such
period. Schedule 2.2(s) of the Company Disclosure Schedule describes any
self-insurance arrangements affecting the Company. “Self insurance arrangements”
means any arrangement by which the Company has assumed risks in scope and amount
customarily insured by businesses in the Company’s industry and geographic
region.

 

t. Employee Benefits.

 

(1) Schedule 2.2(t) of the Company Disclosure Schedule lists, with respect to
Company, any subsidiary of Company and any trade or business (whether or not
incorporated) which is treated as a single employer with Company (an “ERISA
Affiliate”) within the meaning of Sections 414(b), (c), (m) or (o) of the Code,
(i) all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)) and subject to
ERISA, (ii) each loan to a non-officer employee, loans to officers and directors
and any stock option, stock purchase, phantom stock, stock appreciation right,
(iii) all supplemental retirement, severance, sabbatical, medical, dental,
vision care, disability, employee relocation, cafeteria benefit (Code
Section 125) or dependent care (Code Section 129), life insurance or accident
insurance, bonus, pension, profit sharing, savings, deferred compensation or
incentive plans, programs or arrangements which are not employee benefit plans
as otherwise covered under clause (i) above, (iv) other fringe or employee
benefit plans, programs or arrangements that apply to senior management of
Company and that do not generally apply to all employees and (v) any current or
former employment or executive compensation or severance agreements, written or
otherwise, as to which unsatisfied obligations of Company remain for the benefit
of, or relating to, any present or former employee, consultant or director of
Company (together, the “Company Employee Plans”).

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(2) Company has furnished to Buyer a copy of each of the Company Employee Plans
and related plan documents (including trust documents, insurance policies or
contracts, employee booklets, summary plan descriptions and other authorizing
documents, and, to the extent still in its possession, any material employee
communications relating thereto) and has, with respect to each Company Employee
Plan which is subject to ERISA and/or Code reporting requirements, provided
copies of the Form 5500 reports filed for the last three plan years. Except as
described in Schedule 2.2(t)(2), any Company Employee Plan intended to be
qualified under Section 401(a) of the Code has either obtained from the Internal
Revenue Service a favorable determination letter as to its qualified status
under the Code, including all amendments to the Code effected by the Tax Reform
Act of 1986 and subsequent legislation, or has applied to the Internal Revenue
Service for such a determination letter prior to the expiration of the requisite
period under applicable Treasury Regulations or Internal Revenue Service
pronouncements in which to apply for such determination letter and to make any
amendments necessary to obtain a favorable determination. Company has also
furnished Buyer with the most recent Internal Revenue Service determination
letter issued with respect to each such Company Employee Plan, nothing has
occurred since the issuance of each such letter which could reasonably be
expected to cause the loss of the tax-qualified status of any Company Employee
Plan subject to Code Section 401(a).

 

(3) Other than continued health care coverage required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), none of the
Company Employee Plans promises or provides retiree medical or other retiree
welfare benefits to any person, and each Company Employee Plan may be amended or
terminated at any time without any liability to Company or any of its
subsidiaries or affiliates and each such plan provides the administrator with
the discretion to interpret and construe the terms of the plan; (ii) there has
been no “prohibited transaction,” as such term is defined in Section 406 of
ERISA and Section 4975 of the Code, with respect to any Company Employee Plan;
(iii) each Company Employee Plan is in compliance with the requirements
prescribed by any and all statutes, rules and regulations (including but not
limited to ERISA and the Code) and has been administered in accordance with its
terms and in compliance with the requirements prescribed by any and all
statutes, rules and regulations (including ERISA and the Code), and Company and
each subsidiary or ERISA Affiliate has performed all obligations required to be
performed by them thereunder, are not in any respect in default under or
violation of, and have no knowledge of any default or violation by any other
party to, any of the Company Employee Plans; (iv) neither Company nor any
subsidiary or ERISA Affiliate is subject to any liability or penalty under
Sections 4976 through 4980 of the Code or Title I of ERISA with respect to any
of the Company Employee Plans; (v) all contributions required to be made by
Company or any subsidiary or ERISA Affiliate to any Company Employee Plan have
been made

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on or before their due dates, and a reasonable amount has been accrued for
contributions to each Company Employee Plan for the current plan years;
(vi) with respect to each Company Employee Plan, no “reportable event” within
the meaning of Section 4043 of ERISA (excluding any such event for which the 30
day notice requirement has been waived under the regulations to Section 4043 of
ERISA) nor any event described in Sections 4062, 4063 or 4041 of ERISA has
occurred; and (vii) no Company Employee Plan is covered by, and neither Company
nor any subsidiary or ERISA Affiliate has incurred or could incur any liability
under, Title IV of ERISA or Section 412 of the Code. With respect to each
Company Employee Plan subject to ERISA as either an employee pension plan within
the meaning of Section 3(2) of ERISA or an employee welfare benefit plan within
the meaning of Section 3(1) of ERISA, Company has prepared in good faith and
timely filed all requisite governmental reports (which were true and correct as
of the date filed), and Company has properly and timely filed and distributed or
posted all notices and reports to employees required to be filed, distributed or
posted with respect to each such Company Employee Plan. No suit, administrative
proceeding, action or other litigation has been brought, or to the knowledge of
Company, is threatened, against or with respect to any such Company Employee
Plan, including, without limitation, any audit or inquiry by the Internal
Revenue Service of Department of Labor. Neither Company nor any of its
subsidiaries or other ERISA Affiliate is a party to, or has made any
contribution to or otherwise incurred any obligation under, any “multiemployer
plan,” as defined in Section 3(37) of ERISA, and no event (other than routine
claims for benefits) has occurred and no set of circumstances have occurred in
connection with any Company Employee Plan for which Company or any of its
affiliates or subsidiaries could be subject to any liability. No Company
Employee Plan is funded through a ‘welfare benefit fund’ as such term is defined
in Code Section 419(e).

 

(4) With respect to each Company Employee Plan, Company and each of its
subsidiaries have complied with (i) the applicable health care continuation
coverage and notice provisions of COBRA and the proposed regulations thereunder,
(ii) ERISA Section 609, if applicable, and (iii) the applicable requirements of
the Family and Medical Leave Act of 1993 and the regulations thereunder.

 

(5) The consummation of the transactions contemplated by this Agreement will not
(i) entitle any current or former employee of other service provider of Company,
any Company subsidiary or any other ERISA Affiliate to severance benefits or any
other payment, (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or service provider; or
(iii) require payments or any amount that could be received (whether in cash or
property or the vesting of property) by any employee, officer or director of
Company or any of its affiliates or subsidiaries who is a ‘disqualified
individual’ (as such term is defined in Proposed Treasury Regulation
Section 1.280G-1) under any employment, severance or termination agreement, or
other compensation arrangement or Company Employee Plan currently in effect to
be characterized as a ‘excess parachute payment’ as such term is defined in
Section 280G(b)(1) of the Code.

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(6) Since January 1, 2005, there has been no amendment to, written
interpretation or announcement (whether or not written) by Company, any Company
subsidiary or other ERISA Affiliate relating to, or change in participation or
coverage under, any Company Employee Plan which would increase the expense of
maintaining such Plan by an amount equal to $5,000 above the level of expense
incurred with respect to that Plan for the most recent fiscal year included in
Company’s financial statements.

 

(7) Under the Company Stock Option Plans, if applicable, Company has the right
to terminate the right of each optionee with respect to vested options granted
pursuant thereto by paying such optionee a consideration equal to the amount of
the difference between the purchase consideration and the exercise price
thereof, or if otherwise, such difference should be disclosed on Disclosure
Schedule 2.2(t)(7).

 

(8) All voluntary employee benefit associations related to the Company Employee
Plans, if any, have been submitted to and approved as exempt from federal income
tax under Section 501(c)(9) of the Code by the Internal Revenue Service and have
not been amended or operated in a manner which would adversely affect such
exempt status.

 

(9) Each of the guaranteed investment contracts and other funding contracts with
any insurance company that are held by any Company Employee Plan and any annuity
contracts purchased by any such plan was issued by an insurance company which
carried a commercially acceptable rating from each of Dunn & Bradstreet,
Standard & Poor’s, Best and Moody’s Investor Service, Inc., as of the date such
contract was issued, the date hereof and the Closing Date.

 

(10) Except as completely and accurately disclosed on Schedule 2.2(t), no
Company Employee Plan covers persons employed outside the United States and no
such Plan is subject to the laws of a foreign jurisdiction.

 

(11) Schedule 2.2(t) of the Company Disclosure Schedule sets forth, on a plan by
plan basis, the present value of benefits payable presently or in the future to
present or former employees of Company or any of its subsidiaries or affiliates
under each unfunded Company Employee Plan.

 

(12) With respect to each Company Employee Plan, all insurance premiums required
to be paid with respect to said plans as of the Effective Time have been or will
be paid prior to the Effective Time and adequate reserves have been provided for
on Company’s balance sheet for any premiums (or portions thereof) attributable
to service on or prior to the Effective Time.

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u. Tax Matters.

 

(1) All federal, state, local and foreign tax returns required to be filed by
the Company and its Subsidiaries prior to the date hereof have been filed on a
timely basis with the appropriate governmental authorities in all jurisdictions
in which such tax returns are required to be filed (except for such tax returns
subject to a valid extension), and all such returns are correct and complete.
Shareholders have delivered to Buyer correct and complete copies of all federal
income tax returns, examination reports, and statements of deficiencies asserted
against or agreed to by the Company or any Subsidiary since January 1, 2000. To
the knowledge of the Shareholders and the Company, neither the Company nor its
Subsidiaries are currently the subject of any audit, examination or any similar
investigation by any governmental authority. Schedule 2.2(u)(1) of the Company
Disclosure Schedule sets forth all audits, examinations or similar
investigations of the Company and its Subsidiaries by any governmental authority
since January 1, 2000.

 

(2) All federal, state, local and foreign income, franchise, sales, use,
property, and all other taxes, fees, assessments, or other governmental charges
(including withholding taxes), and all interest and penalties thereon (all of
the foregoing collectively, “Taxes”) due from or properly accruable by the
Company and its Subsidiaries have been fully and timely paid or, in the cases of
Taxes for which payment is not yet required, properly and fully accrued for on
the Company Financial Statements or in Schedule 2.2(u)(2) with respect to all
taxable periods ending on or prior to the date of this Agreement and interim
periods through the date of this Agreement.

 

(3) None of the Company and its Subsidiaries has filed a consent under
Section 341(f) of the Code concerning collapsible corporations. None of the
Shareholders, the Company or any Subsidiary is a party to any agreement,
contract or arrangement that would, by reason of the consummation of any of the
transactions contemplated by this Agreement, individually or in the aggregate,
result in the payment of any “excess parachute payment” within the meaning of
Section 280G of the Code. None of the assets of the Company or any Subsidiary is
required to be treated as being owned by any other person pursuant to the “safe
harbor” leasing provisions of Section 168 of the Internal Revenue Code of 1954,
as in effect prior to the repeal of said leasing provisions.

 

(4) None of the Company and its Subsidiaries is a party to any Tax allocation or
sharing agreement. None of the Company and its Subsidiaries (A) has been a
member of an affiliated group filing a consolidated federal income tax return
(other than a group the common Buyer of which was the Company or a Related
Company) or (B) has any liability for the taxes of any person (other than any of
the Company or a Related Company and their respective Subsidiaries) under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.

 

(5) Schedule 2.2(u)(5) sets forth the following information with respect to each
of the Company and its Subsidiaries as of the most recent

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practicable date: (A) the basis of the Company or Subsidiary in its assets as
set forth on its last filed federal income tax return; (B) the amount of any net
operating loss, net capital loss, unused investment or other credit, unused
foreign tax, or excess charitable contribution allocable to the Company or
Subsidiary; and (C) the amount of any deferred gain or loss allocable to the
Company or Subsidiary arising out of any Deferred Intercompany Transaction (as
defined in Treas. Reg. Section 1.1502-13).

 

(6) The Company will not be liable for any Taxes under Section 1374 of the Code
in connection with the deemed sale of the Company’s assets (including the assets
of any qualified subchapter S subsidiary) caused by an election under
Section 338(h)(10) of the Code. Neither the Company nor any qualified subchapter
S subsidiary of the Company has, in the past ten (10) years, (A) acquired assets
from another corporation in a transaction in which the Company’s Tax basis for
the acquired assets was determined, in whole or in part, by reference to the Tax
basis of the acquired assets (or any other property) in the hands of the
transferor or (B) acquired the stock of any corporation which is a qualified
subchapter S subsidiary.

 

(7) There will be no transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest) incurred or
imposed by the State of Louisiana, or any political subdivision thereof, in
connection with the sale of the Company Common Stock by the Shareholders
pursuant to this Agreement (including any corporate-level gains tax triggered by
the sale of the Company Common Stock). However, Shareholders and the Company
give no warranty, representation or right of reimbursement concerning the tax
treatment in any other states or political subdivision thereof.

 

v. Disclosures.

 

(1) No representation or warranty of the Shareholders contained herein, and no
statement contained in any document or instrument heretofore delivered to the
Buyer in connection with this Agreement or the transactions contemplated herein,
contains any untrue statement of a material fact or fails to state a material
fact necessary to make the statements herein or therein not misleading.

 

(2) There is no fact known to any of the Shareholders that has any specific
application to the Company (other than general economic or industry conditions)
and that materially adversely affects the assets, business, prospects, financial
condition, or results of operations of the Company that has not been set forth
in this Agreement, Schedule 2.2(v) or in the Company Disclosure Schedule.

 

w. Brokers. All brokerage contracts with respect to this Agreement and the
transactions contemplated hereby, written or oral, are as set forth on Schedule
2.2(w).

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x. Powers of Attorney. There are no outstanding powers of attorney executed on
behalf of the Company or any of the Shareholders.

 

y. Investment Company. The Company is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, or a “holding company”, a “subsidiary company”
of a “holding company” or an “affiliate” of a “holding company” or a “public
utility” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

z. Shareholder Contracts. No Shareholder is a party to any contract or agreement
with Company except as disclosed in Schedule 2.2(z).

 

2.3 Representations and Warranties by the Buyer. The Buyer represents and
warrants to the Shareholders and the Company that the statements contained in
this Section 2.3 are correct as of the date of this Agreement and will be
correct as of the Closing Date (as though made then), except as set forth in the
disclosure schedule delivered by the Buyer to the Shareholders and the Company
on the date hereof, as supplemented or amended in accordance with Section 3.4 of
this Agreement (such schedule, as so supplemented or amended, the (“Buyer
Disclosure Schedule”). The Buyer Disclosure Schedule will be arranged in
sections and paragraphs corresponding to the lettered and numbered sections and
paragraphs contained in this Section 2.3. Notwithstanding anything herein to the
contrary, each matter disclosed in either the Buyer Disclosure Schedule shall be
deemed responsive to all other Sections of the Agreement to which disclosure is
required by the Buyer; provided, however, that the responsiveness of such a
disclosure matter to another Section of the Agreement and/or disclosure schedule
is facially apparent.

 

a. Organization and Qualification, etc. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Louisiana, has corporate power and authority to own all of its properties and
assets and to carry on its business as it is now being conducted, and is duly
qualified to do business and is in good standing in each other jurisdiction
where, to the reasonable belief of Buyer, such qualification is necessary or
appropriate. The copies of the Buyer’s Articles of Incorporation and Bylaws, as
amended to date, which have been delivered to the Shareholders are complete and
correct, and such instruments, as so amended, are in full force and effect.

 

b. Subsidiaries, etc. Except as set forth in Schedule 2.3(b), the Buyer does not
own of record or beneficially, directly or indirectly, any shares of outstanding
common stock or securities convertible into common stock of any other
corporation or any participating interest in any partnership, joint venture or
other non-corporate business enterprise. Any corporate or non-corporate business
entity listed in Schedule 2.3(b) are collectively called the “Subsidiaries.”

 

c. Authority Relative to Agreement. Buyer has the corporate power and authority
to execute, deliver and perform this Agreement, and all agreements and
instruments to be executed and delivered by Buyer in accordance with this
Agreement and to consummate the transactions contemplated on the part of Buyer
hereby and

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thereby. The execution and delivery by Buyer of this Agreement, and all
agreements and instruments to be executed and delivered by Buyer in accordance
with this Agreement and the consummation by Buyer of the transactions
contemplated on its part hereby and thereby have been duly authorized by its
Board of Directors. No other corporate proceedings on the part of Buyer are
necessary to authorize the execution and delivery of this Agreement and all
agreements and instruments to be executed and delivered by Buyer in accordance
with this Agreement. No other corporate proceedings on the part of Buyer are
necessary to authorize the performance of this Agreement, and all agreements and
instruments to be executed and delivered by Buyer in accordance with this
Agreement or the consummation by Buyer of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Buyer and is enforceable
against Buyer in accordance with its respective terms, except as such
enforcement is subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting creditors’ rights.

 

d. Non-Contravention. The execution, delivery and performance of this Agreement
and all agreements and instruments to be executed and delivered by Buyer in
accordance with this Agreement do not and the consummation by Buyer of the
transactions contemplated hereby and thereby will not (1) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling change, or other restriction of any government, government agency, or
court to which Buyer is subject, (2) violate any provision of the Certificate of
Incorporation or Bylaws of Buyer, or (3) violate or result in, with the giving
of notice or the lapse of time or both, the violation of any provision of, or
result in the acceleration of or entitle any party to accelerate (whether after
the giving of notice or lapse of time or both) any obligation under, or result
in the creation or imposition of any lien, charge, pledge, security interest or
other encumbrance upon any of the property of Buyer pursuant to, any provision
of any mortgage, lien, lease, agreement, contract, license, or instrument to
which Buyer is a party or by which any of its assets are bound. The execution,
delivery and performance of this Agreement and all agreements and instruments to
be executed and delivered by Buyer in accordance with this Agreement do not and
will not violate or conflict with any other restriction of any kind or character
to which Buyer is subject or by which any of its assets may be bound, and the
same does not and will not constitute an event permitting termination of any
such mortgage, lien, lease, agreement, license or instrument to which Buyer is a
party or by which any of its assets is bound.

 

e. Approvals. Except as set forth in Schedule 2.3(e), no consent, authorization,
order or approval of, or filing or registration with, any governmental
commission, board or other regulatory body or any other person is required for
the execution and delivery of this Agreement and any amendments thereto and the
consummation by Buyer of the transactions contemplated hereby and thereby.

 

f. Litigation. Except as set forth in Schedule 2.3(f), there are no actions,
suits, audits, investigations, unfair labor practices charges, complaints,
claims, grievances or proceedings with respect to the Buyer or any of its
Subsidiaries pending against the Buyer or any of its Subsidiaries at law or in
equity, or before or by any federal, state, municipal, foreign or other
governmental department, commission, board, bureau, agency

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or instrumentality, nor are there any such actions, suits, audits,
investigations, unfair labor practice charges, complaints, grievances or
proceedings that are known to be threatened against the Buyer or any of its
Subsidiaries.

 

g. Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Buyer directly with Shareholders
and the Company, without the intervention of any person on behalf of Buyer in
such manner as to give rise to any valid claim by any person against
Shareholders or the Company for a finder’s fee, brokerage commission, or similar
payment.

 

h. Investment Intent.

 

(1) Buyer is acquiring the Company Common Stock solely for the purpose of
investment, for its own account, and not with a view to or for sale in
connection with any distribution thereof within the meaning of Section 2(11) of
the Securities Act. Buyer acknowledges that the Company Common Stock is being
sold to Buyer by each of the Shareholders in reliance upon one or more
exemptions from registration contained in the Securities Act and applicable
state securities laws. The reliance by Shareholders upon such exemptions is
based in part upon the representations set forth in this Section 2.3(h).

 

(2) Buyer understands that the Company Common Stock has not been registered
under the Securities Act, that there is no established market for the Company
Common Stock, and that the Company Common Stock must be held indefinitely and
cannot be transferred unless it is subsequently registered under the Securities
Act or an exemption from such registration is available with respect to such
transfer.

 

(3) Buyer has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Company Common Stock and of making an informed investment decision.

 

(4) Buyer is able to bear the economic risk of its investment in the Company
Common Stock, to hold the Company Common Stock for an indefinite period of time
and to afford a complete loss of its investment in the Company Common Stock.

 

(5) Buyer and its representatives, including such counsel, have been given the
opportunity to ask questions of, and receive answers from, the officers of the
Company and the Shareholders concerning the terms of the transactions
contemplated by this Agreement and the affairs and the business and financial
condition of the Company.

 

i. Filings with Securities and Exchange Commission. Each of the Forms 10 K and
10-Q filed by the Buyer with the Securities and Exchange Commission (“SEC”)
during calendar years 2003, 2004 and 2005 fairly present, in all material
respects, the financial condition and results of operation of the Buyer for the
periods covered by such

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reports. No event has occurred or developed during calendar years 2003, 2004 or
2005 resulting in a material adverse effect on Buyer’s assets or business not
required to be reported to the SEC. Since the expiration of the most recent
period for which a Form 10-K or 10-Q was prepared and filed by Buyer, (a) there
has been no change in the assets liabilities or financial condition of Buyer’s
business except for changes in the ordinary course of business or changes
resulting from Hurricanes Katrina and Rita, which have not had a material
adverse effect on Buyer’s assets or business, and (b) there has been no
occurrence (other than the impact of Hurricanes Katrina or Rita) or development,
individually or in the aggregate, whether or not insured against, with respect
to the business, prospects, condition (financial or otherwise), operations,
property or affairs of the Buyer’s business, which has had a material adverse
effect on Buyer’s assets or business.

 

j. Piggyback Registration. If at any time during the term of this Agreement,
(i) Buyer proposes to register shares of common stock under the Securities Act
in connection with the public offering of such shares for cash (a “Proposed
Registration”) other than a registration statement on Form S-8 or any successor
or other forms promulgated for similar purposes and (ii) a Registration
Statement covering the sale of all of the Closing Shares is not then effective
and available for sales thereof by the Shareholders, Buyer shall, at such time,
promptly give each Shareholder written notice of such Proposed Registration.
Each Shareholder shall have five (5) Business Days from its receipt of such
notice to deliver to the Buyer a written request specifying the amount of
Closing Shares that such Shareholder intends to sell and such Shareholder’s
intended method of distribution. Upon receipt of such request, Buyer shall use
reasonable efforts to cause all Closing Shares which Buyer has been requested to
register to be registered under the Securities Act to the extend necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Shareholder; provided however,
that Buyer shall have the right to postpone, withdraw or delay any registration
effected pursuant to this Section 2.3j without obligation to the Shareholder.
If, in connection with any underwritten public offering for the account of Buyer
or for stockholders of the Buyer that have contractual rights to require Buyer
to register shares of Common Stock, the managing underwriter(s) thereof shall
impose a limitation on the number of shares of Common Stock which may be
included in a registration statement because, in the judgment of such
underwriter(s), marketing or other factors dictate such limitation is necessary
to facilitate such offering, then Buyer shall be obligated to include in the
registration statement only such limited portion of the Closing Shares with
respect to which each Shareholder has requested inclusion hereunder as such
underwriter(s) shall permit.

 

ARTICLE 3

ADDITIONAL COVENANTS AND AGREEMENTS

 

3.1 Conduct of Business. During the period from the date hereof to the Closing
Date, except as otherwise expressly contemplated by this Agreement, the
Shareholders shall cause the Company to, and the Company shall, with some
exception because of the impact of Hurricanes Katrina and Rita, conduct its
operations according to its ordinary and usual course of business, and shall use
its best efforts to preserve intact its business organization, keep

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available the services of its officers and employees, and maintain its present
relationships with licensors, suppliers, distributors, customers and others
having significant business relationships with it. Representatives of the
Company will on request confer during such period with representatives of Buyer
to keep it informed with respect to the general status of the on-going
operations of the business of the Company. Without limiting the generality of
the foregoing and except as otherwise affected by matters expressly contemplated
by this Agreement or in connection with the transactions contemplated by this
Agreement, the Shareholders will cause the Company during such period to:

 

a. carry on the business in substantially the same manner as heretofore carried
on and not introduce any material new method of operation or accounting, nor
provide discounted services outside the ordinary course of business consistent
with the Company’s prior practices;

 

b. maintain its properties, facilities, equipment and other assets, including
those held under leases, in good working order, condition and repair, ordinary
wear and tear excepted;

 

c. perform all of its obligations under all debt and lease instruments and other
agreements relating to or affecting its business, assets, properties, equipment
and rights, and pay all vendors, suppliers, and other third parties (including
mechanics and materialmen) within sixty (60) calendar days of receipt, except to
the extent that such payments may be subject to undisputed claims of offset or
reimbursement in favor of the Company, and pay in full all payroll obligations
when due;

 

d. maintain its present debt and lease instruments (unless same are otherwise
mature) and refrain from entering into new or amended debt or lease instruments
without prior written notice to Buyer and in the case of new term debt, the
consent of Buyer;

 

e. not incur any indebtedness other than ordinary trade accounts payable in the
ordinary course of business;

 

f. keep in full force and effect its present insurance policies or other
comparable insurance coverage;

 

g. use its best efforts to maintain and preserve its business organization
intact, retain its present employees and maintain its relationship with
suppliers, customers and others having business relations with the Company;

 

h. refrain from effecting any change in the articles of incorporation, bylaws or
capital structure of the Company and refrain from entering into or agreeing to
enter into any merger or consolidation by the Company with or into, and refrain
from acquiring all or substantially all of the assets, common stock or business
of any person, corporation, partnership, association or other business
organization or division of any thereof;

 

i. refrain from incurring any expenditures outside the normal course of
business, including any capital expenditures without prior written notification
to and concurrence of Buyer;

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j. refrain from starting or acquiring any new businesses without the prior
written notification to Buyer;

 

k. maintain its present salaries and commission levels for all officers,
directors, employees or agents, except for raises that may be awarded to
employees at or below the level of supervisor in keeping with past practices of
the Company in the ordinary course of its business, refrain from entering into
employment agreements and refrain from entering into any collective bargaining
agreement without the prior written consent of Buyer;

 

l. refrain from declaring or paying any fees, commissions or loans outside the
ordinary course of business, and refrain from declaring or paying any bonuses
without the prior written consent of Buyer; and

 

m. refrain from declaring or paying any dividends, payments or distributions to
Shareholders or their affiliates without the prior written consent of Buyer;

 

n. promptly notify Buyer of any claim or litigation threatened or instituted, or
any other material adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or employees;

 

o. comply with and cause to be complied with all applicable laws, rules,
regulations and orders of all federal, state and local governments or
governmental agencies affecting or relating to the Company or its assets,
properties, operations, businesses or employees, including the timely payment of
all tax liabilities which may come due;

 

p. other than in the ordinary course of business, refrain from any sale,
disposition, distribution or encumbrance of any of its properties or assets and
refrain from entering into any agreement or commitment with respect to any such
sale, disposition, distribution or encumbrance (other than the sale or use of
inventories in the ordinary course of business) without the prior written
consent of Buyer;

 

q. refrain from any purchase or redemption of any common stock or other voting
interest of the Company and refrain from issuing any common stock or other
voting interest;

 

r. refrain from entering into any long-term contracts for the provision of
services or the purchase of supplies or inventory without the prior written
consent of Buyer which consent shall not be unreasonably withheld;

 

s. refrain from making any change in any accounting principle, classification,
policy or practice, except as required by GAAP; and

 

t. manage working capital in the ordinary course of business and consistent with
past practice.

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3.2 Access to Information by Buyer. Until the Closing Date or termination of
this Agreement, Shareholders will furnish Buyer with the Unaudited Monthly
Financial Statements for each month following December 31, 2004 promptly as
available. Buyer may, prior to the Closing have access to the business and
properties of the Company and information concerning its financial and legal
condition as Buyer reasonably deems necessary or advisable in connection with
the consummation of the transactions contemplated hereby, provided that such
access shall not interfere with normal operations of the Company. The
Shareholders and the Company agree to permit Buyer and its authorized
representatives, including but not limited to Buyer’s lending sources, or cause
them to be permitted, to have, after the date hereof and until the Closing Date
or termination of this Agreement, full access to the premises, books and records
of the Company during normal business hours, and the officers and key employees
of the Company will furnish Buyer with such financial and operating data and
other information with respect to the business and properties of the Company as
Buyer shall from time to time reasonably request. No investigation by Buyer
heretofore or hereafter made shall affect the requirement of accurate
representations and warranties of the Shareholders and the Company, and each
such representation and warranty shall survive any such investigation. No
information gained by the Buyer through its own investigation and due diligence
shall be a waiver of the need for written disclosures by the Shareholders and
the Company.

 

3.3 Access to Information by the Shareholders. Until the Closing Date or the
termination of this Agreement, the Shareholders shall have access to the books,
records, operating data, and any other information concerning the financial and
legal condition of the Buyer as the Shareholders deem necessary or advisable in
connection with the transactions contemplated hereby. All requests by the
Shareholders for information pursuant to this Section 3.3 shall be directed to
the Buyer. No investigation by the Shareholders heretofore or hereafter made
shall affect the representations and warranties of Buyer, and each such
representation and warranty shall survive any such investigation.

 

3.4 Amendment to Schedules. Each party hereto agrees that, with respect to the
representations and warranties of such party contained in this Agreement, such
party shall have the right and continuing obligation until the Closing Date to
supplement or amend promptly the Shareholders Disclosure Schedule, the Company
Disclosure Schedule or the Buyer Disclosure Schedule (collectively, referred to
as the “Disclosure Schedules”) with respect to any matter that would have been
or would be required to be set forth or described in the Disclosure Schedules in
order to not materially breach any representation, warranty or covenant of such
party contained herein. Each amendment or supplement to any Disclosure Schedule
shall be clearly marked so as to indicate the amending or supplemental
information contained therein, which shall be presented in appropriate detail,
and shall be delivered prior to the Closing Date and in the manner provided in
Section 8.3. In the event that the Company or Shareholders amend or supplement
the Disclosure Schedules pursuant to this Section 3.4 and such amendment or
supplement constitutes or reflects, individually or in the aggregate, a material
adverse change to the business, assets or prospects of the Company or the
Shareholders (all determined in good faith by the Buyer) then Buyer may, by
notice to the Company and the Shareholders given not less than one (1) business
day prior to the scheduled Closing Date, terminate this Agreement and no party
shall have any further obligation hereunder except as specified in Section 5.2.

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3.5 Confidentiality. The provisions of this Section 3.5 shall supersede and
replace all prior agreements and understandings of the parties with respect to
the subject matter hereof.

 

a. Confidential Information. Until the Closing Date all Confidential
Information, as hereinafter defined, acquired by Buyer with respect to the
Shareholders or the Company, or by the Shareholders or the Company with respect
to Buyer, shall be (i) maintained in strict confidence, (ii) used only for the
purpose of and in connection with evaluating the transactions contemplated
herein, and (iii) disclosed only (A) to employees and duly authorized agents and
representatives who have been informed of the obligations of the parties under
this Agreement with respect to such Confidential Information, who have a need to
know the information in connection with consummating the transactions
contemplated herein, and who agree to keep such information confidential, or
(B) as required by legal process (of which the other parties shall be given
prompt notice). Buyer, the Shareholders and the Company shall be responsible for
any breach of this Section 3.5(a) by any of their respective representatives and
each agrees to take all reasonable measures to restrain its representatives from
prohibited or unauthorized disclosure of the Confidential Information. For the
purpose of this Agreement, the term “Confidential Information” shall mean all
information acquired by any party from another party hereto or its
representatives pursuant to Section 3.2 or 3.3 hereof or otherwise with respect
to the business or operations of such other party, other than (A) information
generally available to the public which has not become available as a result of
disclosure in violation of this Section 3.5(a) and (B) information which becomes
available on a nonconfidential basis from a source other than a party to this
Agreement or its representatives, provided that such source is not known by the
party to this Agreement receiving such information to be bound by a
confidentiality agreement or other obligation of secrecy to another party to
this Agreement or its representatives. If the transactions contemplated herein
are not consummated, all Confidential Information in written or printed or other
tangible form (whether copies or originals) shall be returned to the party of
origin, and all documents, memoranda, notes and other writings whatsoever
prepared by any party or its representatives based on Confidential Information
shall be destroyed; and each party and its representatives will thereafter hold
all Confidential Information concerning the other parties hereto or the
Shareholders in strict confidence.

 

b. Public Announcements. No press release, public announcement, confirmation or
other information regarding this Agreement or the contents hereof shall be made
by Buyer, the Shareholders or the Company without prior consultation between the
parties, except as may be necessary, in the opinion of counsel, to any party to
meet the requirements of any applicable law or regulations, the determination of
any court, or the requirements of any stock exchange on which the securities of
such party may be listed. Notwithstanding the foregoing, Buyer may disclose
pertinent information regarding the transaction contemplated hereby to its
existing and prospective investors, lenders or investment bankers or financial
advisors for the purposes of obtaining financing. Buyer may also make
appropriate disclosures of the general nature of the transaction contemplated
hereby and the identity, nature and scope of the Company’s operations to
prospective acquisition candidates in its efforts to attract additional
acquisitions for Buyer. Buyer may also make appropriate disclosure as required
in

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connection with any registration statement or confidential information
memorandum prepared by Buyer, but in that event will give the Shareholders
prompt notice thereof. Prior to the Closing, the Buyer and the Company shall
jointly approve the contents of any press releases, written employee
presentations, or other comparable materials of potentially wide distribution
that disclose or refer to the transaction contemplated hereby, except for such
press releases or other communications required by law. If the transactions
contemplated herein are not consummated, neither the Buyer nor the Shareholders
shall disclose to any third party or publicly announce the proposed transaction
contemplated hereby, except as otherwise permitted hereinabove and except as
agreed in advance, in writing, by the parties or otherwise required by law, in
which case the party so compelled will give reasonable written notice in advance
to the other parties.

 

3.6 Exclusivity. After the signing of this Agreement until the earlier of the
Closing Date or the termination of this Agreement, neither the Company nor any
Shareholder shall (i) solicit, initiate, or encourage the submission of any
proposal or offer from any person or entity relating to the acquisition of any
common stock or other voting securities of, or any substantial portion of the
assets of, the Company (including any acquisition structured as a merger,
consolidation, or share exchange) or (ii) participate in any negotiations or
discussions regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
person or entity in favor of such acquisition (including any acquisition
structured as a merger, consolidation, or share exchange). Neither the
Shareholders or the Company shall furnish to any other person any information
with respect to the Company that could be used for the purposes described above.
Shareholders shall promptly notify Buyer of any acquisition proposal received by
Shareholders or Company and shall provide Buyer a copy (to the extent written)
or description (to the extent oral) of such acquisition proposal.

 

3.7 Shareholders’ Release of Claims. Effective as of the “Closing Date,” each of
the undersigned in his capacity as a Preheat, Inc. shareholder (a “Shareholder”)
hereby (a) releases, acquits and forever discharges Preheat, Inc. (the
“Company”) and its Subsidiaries from any and all liabilities, obligations,
indebtedness, claims, demands, actions or causes of action arising from or
relating to any event, occurrence, act, omission or condition occurring or
existing on or prior to the Closing Date, including, without limitation, any
claim for indemnity or contribution from the Company or any of its Subsidiaries,
except for (i) salary and expense reimbursement payable to the Shareholders as
an officer, director or employee in the ordinary course of business, (ii) all
benefits (including interests in benefit plans) and fringe benefits to which the
Shareholders are entitled and (iii) all indemnity obligations of the Company in
favor of any Shareholders in their capacity as such or in their capacity as an
officer or director of the Company, which indemnity obligations are set forth in
the Articles of Incorporation and Bylaws of the Company (provided that this
shall in no way limit Omni Energy Services Corp.’s ability to amend such
provisions after the Closing with respect to incidents or occurrences subsequent
to the Closing), and (iv) obligations arising under notes payable to
Shareholders pursuant to Sections 1.2(b) and 1.2(c) of this Stock Purchase and
Sale Agreement, and (b) waives any and all preemptive or other rights to acquire
any shares of common stock of the Company and releases any and all claims
arising in connection with any prior default, violation or failure to comply
with or satisfy any such preemptive or other rights.

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3.8 Real Estate Matters. The Buyer, with the full cooperation and assistance of
the Shareholders and the Company, will cause an environmental investigation to
be performed by environmental engineers or consultants with respect to all of
the real estate owned and leased by the Company listed on Schedule 2.2(m)(1) of
the Company Disclosure Schedule (the “Environmental Assessment Property”). The
Buyer will pay the expenses incurred in obtaining the Phase I Environmental
Investigations. Should Buyer’s consultants suggest that a Phase II Environmental
Investigation is required for one or more properties, such expense shall be paid
by Shareholders and Buyer, 50% to each. During the period prior to Closing, the
Shareholders and the Company shall afford Buyer and its representatives the
continuing right to inspect, during the Company’s normal business hours, the
Environmental Assessment Property and all books, records, contacts, documents
and other data pertaining to the use, ownership, operation, or maintenance of
the Environmental Assessment Property. If after completion of such environmental
investigations, it is determined, at the Buyer’s reasonable discretion, that
information acquired by Buyer establishes that the Company’s owned or leased
real estate constitutes a material environmental liability to the Company, Buyer
shall have the right to terminate this Agreement, upon five (5) calendar days
written notice to Shareholders and Company, and no party hereunder shall have
any continuing obligations hereunder except as set forth in Section 5.2 hereof.

 

3.9 Certain Tax Matters.

 

a. Mutual Consent for Section 338(h)(10) Election. The Buyer and Shareholders
shall cooperate fully and work together towards determining whether an election
will be made under Section 338(h)(10) of the Code (and any corresponding
election under state, local, and foreign tax law) with respect to the purchase
and sale of the stock of the Company pursuant to this Agreement. Any such
election (a “Section 338(h)(10) Election”) shall be made only pursuant to the
mutual consent of the Buyer and Shareholders. In the event of mutual consent
regarding the election of Section 338(h)(10), the Buyer and Shareholders shall
cooperate fully to ensure that all returns, documents, statements, and other
forms that are required to be submitted to any federal, state, county, or other
local taxing authority in connection with a Section 338(h)(10) Election are
submitted in compliance with applicable filing deadlines.

 

b. Tax Periods Ending on or before the Closing Date. Buyer shall prepare or
cause to be prepared and file or cause to be filed all Tax Returns for the
Company and its Subsidiaries for all periods ending on or prior to the Closing
Date which are filed after the Closing Date. Buyer shall permit Shareholders to
review and comment on each such Tax Return described in the preceding sentence
prior to filing. Shareholders acknowledge that upon Closing any election to be
taxed as a Subchapter S Corporation will terminate and that Shareholders will be
responsible for all taxes due up to the day of Closing.

 

c. Cooperation on Tax Matters.

 

(i) Buyer, the Company and its Subsidiaries and Shareholders shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to this Section 3.9 and any

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audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party’s request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Company and its Subsidiaries agree (A) to
retain all books and records with respect to Tax matters pertinent to The
Company and its Subsidiaries relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Buyer or Shareholders, any extensions thereof) of the
respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority, and (B) to give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, The Company and its
Subsidiaries or Shareholders, as the case may be, shall allow the other party to
take possession of such books and records.

 

(ii) Buyer and Shareholders further agree, upon request, to use their best
efforts to obtain any certificate or other document from any governmental
authority or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).

 

d. Tax Sharing Agreements. All tax sharing agreements or similar agreements, if
any, with respect to or involving the Company and its Subsidiaries shall be
terminated as of the Closing Date and, after the Closing Date, the Company and
its Subsidiaries shall not be bound thereby or have any liability thereunder.

 

e. Certificate of No Tax Due. On or before ninety days after the Closing Date,
the Shareholders shall deliver to Buyer its Texas Certificate of No Tax Due,
which will show no franchise or state sales and use tax due in respect of the
Company as of the Closing Date.

 

f. Sub Chapter S Status. Through the Closing Date, the Company and Shareholders
will not revoke the Company=s election, if any, to be taxed as an S corporation
within the meaning of Sections 1361 and 1362 of the Code. The Company and
Shareholders will not take or allow any action, other than the sale of the
Company=s stock pursuant to this Agreement, that would result in the termination
of the Company=s status as a validly electing S corporation within the meaning
of Sections 1361 and 1362 of the Code.

 

3.10 Satisfaction of Conditions by the Company and Shareholders. The Company and
the Shareholders shall (i) use their reasonable efforts to obtain, as soon as
possible, all governmental approvals required to be obtained by the Company and
make, as soon as possible, all filings with any governmental authority required
on the part of the Company to consummate the transactions contemplated hereby,
(ii) use their reasonable efforts to obtain, as soon as possible, all other
consents to and approvals required to be obtained by the Company to consummate
the transactions contemplated hereby, and (iii) otherwise use their reasonable
efforts to satisfy the conditions set forth in Article 4 of this Agreement to
the extent that such satisfaction is within their control.

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3.11 Satisfaction of Conditions by Buyer. Buyer shall (i) use its reasonable
efforts to obtain, as soon as possible, all governmental approvals required to
be obtained by the Buyer and make, as soon as possible, all filings with any
governmental authority required on the part of the Buyer to consummate the
transactions contemplated hereby, (ii) use its reasonable efforts to obtain, as
soon as possible, all of the consents to and approvals required to be obtained
by the Buyer to consummate the transactions contemplated hereby, and
(iii) otherwise use its reasonable efforts to satisfy the conditions set forth
in Article 4 of this Agreement to the extent that such satisfaction is within
its control.

 

3.12 Benefit Plans. Neither Buyer nor, following the Closing, the Company shall
terminate any health or medical insurance, life insurance, 401(k) plan or other
benefit plan in effect with respect to the Company until such time as Buyer
replaces such plan. Any such replacement plan shall give the officers and
employees of the Company full credit for the period of time each has been
employed by the Company prior to the Closing and for the period of time each is
employed by the Company after the Closing. Any new health insurance plan shall
provide for coverage for pre-existing conditions.

 

3.13 Shareholder and Affiliate Indebtedness and Receivables. As of the Closing,
Shareholders and their Affiliates shall cause to be paid in full in cash all
accounts payable, notes payable and advances payable owed by them or their
Affiliates to the Company (or any Subsidiary), and the Company (or any
Subsidiary) shall pay in full in cash all accounts payable, notes payable and
advances payable by the Company (or any Subsidiary) to Shareholders or their
Affiliates, unless otherwise agreed to by Buyer.

 

3.14 Other Liabilities. As of the Closing, the Company (or any Subsidiary) shall
pay in full in cash all liabilities outside the ordinary course of business
other than the liabilities comprising the Closing Assumption of Debt. As of the
Closing, the only liabilities remaining of the Company shall be those listed on
Schedule 3.14.

 

ARTICLE 4

CONDITIONS PRECEDENT

 

4.1 Conditions Precedent to the Obligations of the Buyer. The obligations of the
Buyer to consummate the Closing under this Agreement are subject to the
satisfaction in all material respects of each of the following conditions,
unless waived by the Buyer:

 

a. Accuracy of Representations and Warranties. Except for such changes as are
permitted pursuant to Section 3.4 of this Agreement, the representations and
warranties of the Shareholders and the Company contained in this Agreement, in
the Shareholders Disclosure Schedule, the Company Disclosure Schedule and in
each closing certificate and document delivered to Buyer by the Company or the
Shareholders pursuant hereto shall be correct in all material respects at and as
of the Closing Date as though made at and as of the Closing Date, other than
such representations and warranties as are specifically made as of another date
which shall be correct at and as of such other date; and the Shareholders and
the Company shall each have delivered to Buyer a certificate to that effect.

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b. Performance of Covenants. The Shareholders and the Company shall have
performed and complied with all covenants of this Agreement to be performed or
complied with by them at or prior to the Closing Date, and the Shareholders and
the Company shall each have delivered to Buyer a certificate to that effect.

 

c. Legal Actions or Proceedings. No legal action or proceeding shall have been
instituted after the date hereof against the Shareholders or the Company, or
against Buyer, arising by reason of the acquisition of the Company pursuant to
this Agreement, which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,
(ii) to have a material adverse effect on the Company or (iii) to have a
material adverse effect on the results of operations or financial condition of
Buyer and its subsidiaries, taken as a whole, after giving effect to the
consummation of the transactions contemplated by this Agreement.

 

d. Approvals. The Company and the Shareholders shall have procured all of the
consents, approvals and waivers specified in Sections 2.1(b) and 2.2(d), and the
Shareholders and the Company shall each have delivered the same to Buyer,
including but not limited to waiver of any and all rights under any stock
transfer restriction agreements, any preemptive right agreements and/or
provisions, and any rights of first refusal, whether set forth in the Company
Articles of Incorporation and/or the Company Bylaws and/or contracts.

 

e. Employment and Non-Compete Agreements. Robert H. Rhyne, Jr., Brent Trauth,
Scott Carter, Alvin Dupre, Brandon Orlando and Company shall have executed and
delivered Employment and Non-Compete Agreements with the Company on the forms
attached as Exhibits 4.1(e)(1) through 4.1(e)(5), Pro-Enterprise Inc. and
Company shall have executed an agency agreement on the form attached hereto as
Exhibit 4.1(e)(6) and Brandon Orlando and Company shall have executed a bill of
sale for the reverse osmosis equipment on the form attached hereto as Exhibit
4.1(e)(7).

 

f. Opinion of Counsel for the Company and the Shareholders. Buyer shall have
received the favorable opinion of The Milling Firm, counsel for the Company and
the Shareholders, dated the Closing Date, in the form attached as Exhibit
4.1(f).

 

g. The Shareholders Release of the Company; Corporate Records. The Shareholders
shall have delivered to the Buyer (i) a release that effectuates Section 3.7 of
this Agreement, and (ii) the original corporate records and books of Company,
including the minute book, the stock transfer books, and the corporate seal of
the Company (of any of which the Shareholders may retain copies for any proper
purpose).

 

h. Due Diligence Satisfactory. The Buyer’s due diligence investigation of the
Company as contemplated by Section 3.2 and Section 3.8 hereof shall be completed
to the satisfaction of Buyer and Buyer’s lending sources, including its senior
lenders.

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i. All Proceedings to be Satisfactory. All necessary director and shareholder
resolutions, waivers and consents and all other actions to be taken by the
Shareholders and the Company in connection with the consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
shall be satisfactory in form and substance to Buyer and its counsel.

 

j. Financing. Buyer shall have, as of the Closing Date, sufficient financing
arrangements in place in order to have immediately available funds to enable it
to pay the cash portion of the Purchase Price to the Shareholders at the
Closing.

 

k. Provisions for Federal and State Income Tax. The Company shall have
sufficient cash on hand as of the Closing Date to cover the estimates (which
estimates shall be satisfactory to Buyer) of the federal and state income taxes
on taxable income of the Company through the Closing Date.

 

l. Excess Working Capital. In addition to the amount for the federal and state
tax estimates discussed above, the Company shall have Excess Working Capital on
hand as of the Closing Date sufficient to allow the Company to continue to
operate in the ordinary course of business consistent with past practices
without the injection of any cash from the Buyer. For purposes of this
provision, Excess Working Capital is defined as cash on hand plus accounts
receivable (aged 90 days or less) minus accounts payable. The sufficiency of the
amount of such Excess Working Capital shall be determined by Buyer, but in no
event shall it be less than $4.5 Million Dollars.

 

m. 100% Commitment. The Shareholders collectively the owners of 100% of the
outstanding shares of common stock of the Company, their respective spouses, the
Company and Buyer have executed and delivered this Agreement.

 

n. Broker Release. None required.

 

o. Secretary’s Certificate. Buyer shall have received the Certificate of the
Secretary of the Company, dated the Closing Date, in the form attached as
Exhibit 4.1(o).

 

p. Officer’s Certificate. Buyer shall have received the Certificate of an
Executive Officer of the Company, dated the Closing Date, in the form attached
as Exhibit 4.1(p).

 

q. Float Plane Assignment. Rhyne Enterprises, Inc. shall transfer and assign the
float plane bearing tail number N701JS, free and clear of all encumbrances, to
OMNI Offshore Aviation Corp. or such other entity as may be designated by Buyer.

 

r. Pressure Washers. Pressure Washers Sales and Rental, Inc. shall transfer and
assign any and all pressure washers and ancillary parts, equipment and inventory
that it owns to Company, free and clear of any encumbrances.

 

s. Miscellaneous Assignment. Shareholders shall transfer and assign to Buyer any
and all property possessed by them for the benefit of the Company that has been
used to entertain Company customers and/or that has traditionally been paid for
by the Company, such as hunting leases and tickets to sporting events.

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t. Preheat, Inc. Guaranties. Company shall be released from any and all guaranty
agreements granted or given in favor of third parties.

 

4.2 Conditions Precedent to the Obligations of the Shareholders and the Company.
The obligations of the Shareholders and the Company to consummate the Closing
under this Agreement are subject to the satisfaction in all material respects or
waiver by the Shareholders of each of the following conditions:

 

a. Accuracy of Representations and Warranties. Except for such changes as are
permitted pursuant to Section 3.4 of this Agreement, the representations and
warranties of Buyer contained in this Agreement, in the Buyer Disclosure
Schedule and in each closing certificate and document delivered by the Buyer to
the Shareholders or the Company pursuant hereto shall be correct in all material
respects at and as of the Closing Date, as though made at and as the Closing
Date, other than such representations and warranties as are specifically made as
of another date which shall be correct at and as of such other date; and Buyer
shall have delivered to the Shareholders and the Company a certificate to that
effect.

 

b. Performance of Covenants. Buyer shall have performed and complied with all
covenants of this Agreement to be performed or complied with by them at or prior
to the Closing Date, and Buyer shall each have delivered to the Shareholders and
the Company a certificate to such effect.

 

c. Approvals. Buyer shall have procured all of the consents, approvals and
waivers specified in Section 2.3(f), and Buyer shall deliver the same to the
Shareholders and the Company.

 

d. All Proceedings to be Satisfactory. All certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
shall be satisfactory in form and substance to Shareholders, the Company and
their counsel.

 

e. Opinion of Counsel for the Buyer. The Shareholders and the Company shall have
received the favorable opinion of Gordon, Arata, McCollam, Duplantis & Eagan,
L.L.P., counsel for Buyer, dated the Closing Date, in the form attached as
Exhibit 4.2(e).

 

f. Legal Actions or Proceedings. No legal action or proceeding shall have been
instituted after the date hereof against the Buyer, or against the Shareholders
or the Company, arising by reason of the acquisition of the Company pursuant to
this Agreement, which is reasonably likely (1) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,
(2) to have a material adverse effect on the Company or (3) to have a material
adverse effect on the results of operations or financial condition of Buyer and
its subsidiaries, taken as a whole, after giving effect to the consummation of
the transactions contemplated by this Agreement.

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g. Due Diligence Satisfaction. Shareholder’s due diligence investigation of
Buyer shall be completed to the satisfaction of Shareholders.

 

h. Assumption of Company Debt. Buyer’s assumption of debt, as described in
Section 1.2(f) above, shall be approved by and consented to by Company’s
lenders/creditors. Buyer shall use it reasonable efforts to obtain releases of
any personal guaranties of Shareholders related to the debt described in
Section 1.2(f).

 

i. Real Estate Leases. The Shareholders as lessors and the Company as lessee
shall have executed leases on forms agreeable to the Shareholders, the Company
and Buyer, for the Company facilities in Broussard, Louisiana, Belle Chasse,
Louisiana and Freer, Texas and the Shareholders and Buyer shall have executed
leases or subleases, on forms satisfactory to the Shareholders, Company and
Buyer, for the two New Orleans apartments currently owned by Pressure Washers
Sales and Rentals, Inc.

 

ARTICLE 5

TERMINATION

 

5.1 Termination of Agreement. The Parties may terminate this Agreement as
provided below:

 

a. Mutual Consent. The Buyer and the Shareholders may terminate this Agreement
by mutual written consent of Buyer and Shareholders at any time prior to the
Closing Date;

 

b. Termination by Buyer. The Buyer may terminate this Agreement by giving
written notice to the Shareholders at any time prior to the Closing Date in the
event of a material change in the financial position of the Company, or if the
Shareholders or the Company has breached any material representation, warranty,
or covenant contained in this Agreement in any material respect, if the Buyer
has notified the Shareholders of the breach and the breach has continued without
cure until ten (10) calendar days after the notice of such breach;

 

c. Termination by the Shareholders. The Shareholders may terminate this
Agreement by giving written notice to the Buyer at any time prior to the Closing
Date in the event of a material change in the financial position of the Buyer,
or if the Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, if the Shareholders have
notified the Buyer of the breach and the breach has continued without cure until
ten (10) calendar days after the notice of such breach;

 

d. Termination by Either the Shareholders or the Buyer. Either the Buyer or the
Shareholders may terminate this Agreement by giving written notice to the other
parties (i) if the Closing shall not have occurred by December 31, 2005;
provided, however, that the right to terminate this Agreement under this
Section 5.1 (d)(i) shall not be available to any party whose failure to fulfill
any obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur on or prior to such date; or
(ii) in the event that any governmental authority shall have

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issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become final
and nonappealable.

 

5.2 Effect of Termination. In the event of termination of this Agreement as
provided in Section 5.1, this Agreement shall forthwith become void and there
shall be no liability on the part of any party hereto, except that
(1) Section 3.5, Section 8.1, Section 8.6, Section 8.7, Section 8.8, and
Section 8.10 hereof shall survive such termination and (2) nothing herein shall
relieve any party from liability for any willful breach of any such surviving
Section hereof.

 

ARTICLE 6

SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

 

6.1 Survival of Representations and Warranties. Subject to the limitations of
Section 6.4, the respective representations and warranties of the parties
contained in this Agreement shall survive the Closing Date, regardless of any
investigation made by or on behalf of any party.

 

6.2 Indemnification by the Shareholders. Subject to the limitations of
Section 6.5 and the provisions of Section 3.8, the Shareholders, solidarily,
jointly and severally, hereby agree to indemnify and hold harmless Buyer and its
affiliates including the Buyer and its officers and directors, in respect of any
losses, claims, damages, liabilities or related expenses (including, but not
limited to, all litigation costs but net of all available proceeds of insurance)
(collectively, “Losses”) which Buyer (but without duplication) incurs as a
result of the breach of:

 

a. any of the representations or warranties made by the Shareholders in or
pursuant to this Agreement, or

 

b. any of the covenants made by the Shareholders in or pursuant to this
Agreement which are to be performed at or after the Closing Date.

 

The indemnification obligations of the Shareholders under this Section 6.2 shall
survive the Closing Date and will terminate at the time specified in
Section 6.5.

 

6.3 Indemnification by Buyer. Buyer agrees to indemnify and hold harmless the
Shareholders in respect of any losses, claims, damages, liabilities or related
expenses (including, but not limited to, all litigation costs) which the
Shareholders incur as a result of the breach of:

 

a. any of the representations or warranties made by Buyer in or pursuant to this
Agreement, or

 

b. any of the covenants made by Buyer in or pursuant to this Agreement which are
to be performed at or after the Closing Date.

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The indemnification obligations of Buyer under this Section 6.3 shall survive
the Closing Date and will terminate at the time specified in Section 6.5.

 

6.4 Notice. Promptly after any party hereto (in Article 6, the “Indemnified
Party”) has received notice or has knowledge of the occurrence of any event
which the Indemnified Party asserts is an indemnifiable event or after the
threat or commencement of any action, claim or proceeding commenced against the
Indemnified Party by a third party that might result in any claim for indemnity
pursuant to this Agreement (a “Third Party Claim”), the Indemnified Party shall
provide the party obligated to provide indemnification hereunder (in Article 6,
the “Indemnifying Party”) written notice of such claim or the threat of
commencement of such action or proceeding. Promptly after receipt by an
Indemnifying Party of any such notice, the Indemnifying Party shall, within ten
business days of receipt of such notice, either: (i) acknowledge the debt,
liability or obligation for which indemnity is sought as a valid claim and
forthwith pay the Indemnified Party an amount sufficient to discharge such debt,
liability or obligation; (ii) in the event of a Third Party Claim which is not
acknowledged by the Indemnifying Party to be owing, notify the Indemnified Party
whether the Indemnifying Party elects to undertake the defense thereof and, if
so, thereupon promptly assume and diligently contest such Third Party Claim with
counsel reasonably satisfactory to the Indemnified Party; or (iii) in the event
of a claim by the Indemnified Party for indemnity hereunder which is challenged
by the Indemnifying Party, notify the Indemnified Party of such challenge.
Failure to respond within the appropriate time period following the receipt of a
notice hereunder shall be deemed to constitute a challenge by the Indemnifying
Party of the claims to indemnification by the Indemnified Party. In the event of
such a challenge, the Indemnified Party shall, if the claim is a Third Party
Claim, defend against such claim subject to such Party’s right to be indemnified
for all litigation costs to the extent it is ultimately determined that the
Indemnifying Party was obligated (after applying the limitations of Section 6.5)
to provide indemnification with respect to such Third Party Claim. The
Indemnified Party shall not compromise a Third Party Claim without the prior
written consent of the Indemnifying Party (which consent may not be unreasonably
withheld or delayed if the Indemnifying Party has challenged the claim to
indemnification by the Indemnified Party). The Indemnifying Party shall not
compromise a Third Party Claim unless the compromise includes a complete release
of the Indemnified Party and does not create any obligations of the Indemnified
Party.

 

6.5 Limitations on Indemnification. No Indemnified Party shall be entitled to
indemnification pursuant to Article 6 unless and until the aggregate of all
Losses for which indemnification would (but for the limitation of this sentence)
be required to be paid by the Indemnifying Party under Article 6 of this
Agreement (collectively, “Indemnity Obligations”) exceeds $100,000 (the “Loss
Threshold”), provided that if the aggregate Losses for which indemnification is
required to be paid shall exceed such sum then only those Losses in excess
thereof shall be payable. If an Indemnifying Party pays indemnification
(including without limitation, the cost of defending a Third Party Claim) that
was not required to be paid due to any limitation set forth in this Section 6.5,
then the Indemnified Party shall, promptly after demand by the Indemnifying
Party, reimburse the latter for such payments without interest. Losses for which
indemnification is required to be paid under Article 6 by reason of any breach
of the representations and warranties of Section 2.1 (“Section 2.1 Losses”)
shall not be subject to the Loss Threshold, but the amount of Section 2.1 Losses
shall not be counted toward meeting that threshold with respect to other
indemnification claims. Absent a finding of fraud

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by a court having jurisdiction, the maximum aggregate liability of the
Shareholders with respect to Shareholder Indemnity Obligations shall not exceed
Four Million and No/100 Dollars ($4,000,000.00) in the aggregate (the “Aggregate
Limitation”). A Shareholder shall have no further obligations with respect to
Shareholder Indemnity Obligations at the earlier of the time when all
Shareholders have paid and/or are obligated to pay Shareholder Indemnity
Obligations equal in the aggregate to the Aggregate Limitation.

 

a. An Indemnified Party shall not be entitled to make any claim for
indemnification under this Article 6 unless notice of such claim describing such
claim with particularity is given prior to the date that is twenty-four
(24) months after the Closing Date, or, with respect to the warranties and
representations in Section 2.2(u) (“Tax Matters”), the date that is not later
than the expiration of the applicable statute of limitations for a claim by a
taxing authority for any taxes, penalties or interest.

 

ARTICLE 7

FURTHER ASSURANCES

 

7.1 Further Assurances. At any time and from time to time on and after the
Closing Date (a) at the request and expense of Buyer, the Shareholders shall
deliver to Buyer (but may retain copies for any proper purpose) any records,
documents and data possessed by the Shareholders and not previously delivered to
Buyer to which Buyer is entitled and shall execute and deliver or cause to be
executed and delivered all such deeds, assignments, consents, documents and
further instruments of transfer and conveyance, and take or cause to be taken
all such other actions, as Buyer may reasonably deem necessary or desirable in
order to fully and effectively vest in Buyer, or to confirm its title to and
possession of, the Company Common Stock or to assist Buyer in exercising rights
with respect thereto which Buyer is entitled to exercise pursuant to the terms
of this Agreement; and (b) Buyer shall execute and deliver or cause to be
executed and delivered such further instruments and take or cause to be taken
such further actions as the Shareholders may reasonably deem necessary or
desirable to carry out the terms and provisions of this Agreement.

 

7.2 Books and Records. Buyer agrees that it shall preserve and keep all books
and records relating to the Company in Buyer’s possession until the later of
December 31, 2010, or six months following the expiration of the statute of
limitations (including extensions thereof) applicable to the tax returns filed
by or with respect to the Company for taxable periods ending prior to or on the
Closing Date to which such books or records are relevant. After such time,
before Buyer shall dispose of any of such books and records, at least 90
calendar days’ prior written notice to such effect shall be given by Buyer to
the Shareholders, and the Shareholders shall be given an opportunity, at Buyer’s
cost and expense, to remove all or any part of such books and records as the
Shareholders may select, and the Shareholders may retain copies thereof. Duly
authorized representatives of the Shareholders shall, upon reasonable notice,
have access at any time to such books and records during normal business hours
to examine, inspect and copy such books and records.

 

a. In any instance in which any Shareholder or Buyer, as the case may be, is
required to prepare or file (or cause to be filed) tax returns which cover a
period that includes the Closing Date or to respond to an audit by the Internal
Revenue Service or other governmental agency with respect to a period prior to
the Closing Date, each Shareholder or Buyer, as the case may be, will furnish
all information and records reasonably available to it and reasonably requested
of him, her or it and necessary or

--------------------------------------------------------------------------------

appropriate for use in preparing such returns or responding to such audit. The
Buyer shall at Buyer’s expense prepare and file, subject to giving Shareholders
a reasonable opportunity to comment on, tax returns covering periods ending on
the Closing Date.

 

b. Buyer, the Company and the Shareholders shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the filing of
tax returns and any audit, litigation or other proceeding with respect to taxes.
Such cooperation shall include the provision of records and information which
are reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.

 

ARTICLE 8

MISCELLANEOUS

 

8.1 Expenses, etc. Whether or not the transactions contemplated by this
Agreement are consummated, none of the parties hereto shall have any obligation
to pay any of the fees and expenses of the other parties incident to the
negotiation, preparation and execution of this Agreement, including the fees and
expenses of counsel, accountants and other experts; provided, however, that, in
the event a party has breached any representation, warranty or covenant
contained in this Agreement, after its execution, in any material respect, and
such breach has not been cured ten (10) calendar days after the giving of notice
of such breach, the breaching party shall pay the first $100,000 of the
non-breaching party’s reasonable expenses incurred as a result of such breach,
including but not limited to the non-defaulting party’s attorney’s fees incurred
in connection with the negotiation, execution and efforts toward consummation of
this Agreement, including but not limited to the costs and expenses of due
diligence reviews and financial audits. For purposes of this Section 8.1, all
fees and expenses incident to the negotiation, preparation and execution of this
Agreement incurred by either or both Company and Shareholders and which have
been incurred prior to Closing shall be deemed and paid as costs and obligations
of the Shareholders’ alone. The Shareholders, on the one hand, and the Company
and Buyer, on the other hand, will indemnify the other parties, and hold them
harmless from and against any claims for finders’ fees or brokerage commissions
in relation to or in connection with such transactions as a result of any
agreement or understanding between such indemnifying party and any third party.

 

8.2 Execution in Counterparts. For the convenience of the parties, this
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

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8.3 Notices. All notices which are required or may be given pursuant to the
terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and delivered or mailed as follows:

 

If to the Shareholders or, prior

to the Closing, to the Company:

 

Preheat, Inc

4730 S.W. Evangeline Thruway

Broussard, Louisiana 70518

Telephone: (337) 837-2411

Facsimile: (337) 837-9794

 

Attn:   Robert H. Rhyne, Jr.     Brent Trauth

 

With a copy to:

 

Jeff W. Elmore

Milling Benson, Woodard, LLP

Post Office Box 52126

Lafayette, Louisaina 70505

Telephone: (337) 232-3929

Facsimile: (337) 233-4957

 

If to Buyer or, following the Closing,

to the Company, to:

 

OMNI Energy Services Corp.

Post Office Box 3761

Lafayette, Louisiana 70502

Attn: Mr. Darcy Klug

Telephone: (337) 896-6664

Facsimile: (337) 896-9067

 

With a copy to:

 

Samuel E. Masur

Gordon, Arata, McCollam,

  Duplantis & Eagan, L.L.P.

400 E. Kaliste Saloom Road, Suite 4200

Lafayette, Louisiana 70508

Telephone: (337) 237-0132

Facsimile: (337) 237-3451

 

or such other address or addresses as any party hereto shall have designated by
notice in writing to the other parties hereto. Any notice or other communication
pursuant to this Agreement shall be deemed to have been duly given or made and
to have become effective upon the earliest of (a) when delivered in hand to the
party to which directed, or (b) if sent by first-class mail postage, prepaid and
properly addressed as set forth above, three (3) calendar days after deposit in
the

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United States Mail, or (c) with respect to delivery by certified mail, return
receipt requested, properly addressed as set forth above, when delivery thereof
is made by the U.S. Postal Service (or the date of refusal of delivery), or
(d) when delivered (or the date of refusal of delivery) if sent by overnight
delivery service, or (e) the date sent, if sent by facsimile transmission with
proper electronic confirmation.

 

8.4 Waivers. Any party hereto (as to itself, but not as to other parties without
their consent) may, by written notice to the other parties hereto, (a) extend
the time for the performance of any of the obligations or other actions of the
other parties under this Agreement; (b) waive any inaccuracies in the
representations or warranties of another party contained in this Agreement or in
any document delivered pursuant to this Agreement; (c) waive compliance with any
of the conditions or covenants of another party contained in this Agreement; or
(d) waive performance of any of the obligations of another party under this
Agreement. Except as otherwise provided in the preceding sentence, no action
taken pursuant to this Agreement, including without limitation any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representation, warranty,
covenant or agreement contained in this Agreement. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed a waiver of any subsequent breach.

 

8.5 Amendments, Supplements, Schedules, etc. At any time this Agreement may be
amended or supplemented by such additional agreements, articles or certificates,
as may be determined by the parties hereto to be necessary, desirable or
expedient to further the purposes of the Agreement, or to clarify the intention
of the parties hereto, or to add to or modify the covenants, terms or conditions
hereof or to effect or facilitate any governmental approval or acceptance of
this Agreement or to effect or facilitate the filing or recording of this
Agreement or the consummation of any of the transactions contemplated hereby.
Any such additional agreement, article, or certificate must be in writing and
signed by all parties.

 

8.6 Entire Agreement. This Agreement, its Exhibits and Disclosure Schedules and
the documents executed on the Closing Date in connection herewith, constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
No representation, warranty, promise, inducement or statement of intention has
been made by any party hereto which is not embodied in this Agreement or such
other documents, and no party hereto shall be bound by, or be liable for, any
alleged representation, warranty, promise, inducement or statement of intention
not embodied herein or therein.

 

8.7 Choice of Forum; Consent to Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of Louisiana. Any
suit, action or proceeding arising with respect to the validity, construction,
enforcement or interpretation of this Agreement, and all issues relating in any
matter hereto, shall be brought in the United States District Court for the
Western District of Louisiana, or in the event that federal jurisdiction does
not pertain, in the state courts of the State of Louisiana in Lafayette Parish.
Each of the parties hereto hereby submits and consents to the jurisdiction of
such courts for the purpose of any such suit, action or proceeding and hereby
irrevocably waives (a) any objection

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which any of them may now or hereafter have to the laying of venue in such
courts, and (b) any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.

 

8.8 Binding Effect, Benefits. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors, assigns,
heirs and legatees. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto or their respective
successors and assigns, and third parties who are expressly given rights
hereunder, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.

 

8.9 Assignability. Neither this Agreement nor any of the parties’ rights
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto; provided, however, that the Buyer may
assign its rights under this Agreement to an affiliate without the prior written
consent of any party hereto, provided that Buyer shall remain, jointly and
severally, bound with its assignee with respect to all obligations undertaken by
it.

 

8.10 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, rule or
regulation, such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof. The remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed effective as of the date first above written.

 

BUYER:

OMNI ENERGY SERVICES CORP.

a Louisiana corporation

/s/ James C. Eckert

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James C. Eckert

Chief Executive Officer

SHAREHOLDERS:

/s/ Robert H. Rhyne, Jr.

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Robert H. Rhyne, Jr.

/s/ Brent Trauth

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Brent Trauth

THE COMPANY:

PREHEAT, INC.

a Louisiana corporation

By:

 

/s/ Robert H. Rhyne, Jr.

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Name:

 

Robert H. Rhyne, Jr.

Title:

 

President