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EXHIBIT 10.16
AGREEMENT AND PLAN OF MERGER
AMONG
CORE LABORATORIES N.V.,
AGI ACQUISITION COMPANY,
THE XXXXXXX GROUP INTERNATIONAL, INC.
AND
XXXXXX X. XXXXXXX
DECEMBER 18, 1998
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TABLE OF CONTENTS
ARTICLE I THE MERGER
1.01 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 EFFECT OF THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 ARTICLES OF INCORPORATION; BYLAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.05 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.06 ACQUISITION CONSIDERATION; CONVERSION AND CANCELLATION OF SECURITIES . . . . . . . . . . . 2
1.07 PAYMENT FOR COMPANY STOCK; SURRENDER OF CERTIFICATES . . . . . . . . . . . . . . . . . . . 4
1.08 NO FRACTIONAL SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.09 AGREEMENT TO VOTE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.10 WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.11 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12 STOCK TRANSFER BOOKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.13 TAKING OF NECESSARY ACTION; FURTHER ACTION . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDER
2.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . 6
2.02 ORGANIZATIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.03 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.04 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 8
2.06 PERMITS; COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.07 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.08 ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.09 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.11 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.12 POOLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.13 AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.14 CERTAIN BUSINESS PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.15 ENVIRONMENTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.16 UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.17 CERTAIN AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.18 CONTRACTS AND COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.19 AFFILIATE INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.20 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.21 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.22 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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2.23 PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.24 GOOD TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.25 CERTAIN SECURITIES LAW MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.26 AUTHORIZATION AND VALIDITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ACQUIROR
3.01 ORGANIZATION AND QUALIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.02 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.03 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.04 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 18
3.05 REPORTS; FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.06 ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.07 POOLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.08 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV COVENANTS OF THE STOCKHOLDER
4.01 AFFIRMATIVE COVENANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.02 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.02 NEGATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VI COVENANTS OF ACQUIROR
6.01 AFFIRMATIVE COVENANTS OF ACQUIROR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.02 NEGATIVE COVENANTS OF ACQUIROR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VII ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.02 ACCESS AND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.04 AFFILIATES; POOLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.05 PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.06 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.07 EMPLOYEES OF COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.08 TAX-FREE REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VIII INDEMNIFICATION
8.01 IN GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.02 NO EXHAUSTION OF REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.03 DEFENSE OF THIRD PARTY CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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8.04 PAYMENT; ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.05 SATISFACTION OF CLAIMS FROM ESCROW SHARES . . . . . . . . . . . . . . . . . . . . . . . . 30
8.06 LIABILITY LIMITATIONS; SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 31
ARTICLE IX CONDITIONS
9.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIROR COMPANIES . . . . . . . . . . . . . . 31
9.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . 32
ARTICLE X MISCELLANEOUS
10.01 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.02 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.03 WAIVER AND AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . 34
10.05 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.06 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.07 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.08 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.09 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.11 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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EXHIBITS
--------
Exhibit A -- Escrow Agreement
Exhibit B -- Employment Agreement Form
Exhibit C -- Affiliates' Letter
Exhibit D -- Xxxxxxx Employment Agreement
Exhibit E -- Acquiror Disclosure Schedules
Exhibit F -- Company Disclosure Schedules
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and
entered into as of December 18, 1998 by and among Core Laboratories N.V., a
Netherlands limited liability company ("Acquiror"), AGI Acquisition Company, a
Texas corporation with its principal place of business in Houston, Texas, and a
wholly-owned subsidiary of Acquiror ("Acquisition Sub"), The Andrews Group
International Inc., a Texas corporation (the "Company"), and Xxxxxx X. Xxxxxxx
the sole stockholder of the Company (the "Xxxxxxx"). Acquiror and Acquisition
Sub are sometimes collectively referred to herein as the "Acquiror Companies."
RECITALS
Xxxxxxx owns, beneficially and of record, all 100% of the outstanding
capital stock of the Company.
Acquisition Sub, upon the terms and subject to the conditions of this
Agreement and in accordance with the Texas Business Corporation Act (the
"TBCA"), will merge with and into the Company (the "Merger").
The Board of Directors of the Company has determined that the Merger
is consistent with and in furtherance of the long-term business strategy of the
Company and is fair to, and in the best interests of, the Company and Xxxxxxx
and has approved and adopted this Agreement and the transactions contemplated
hereby, and recommended approval and adoption of this Agreement and the Merger
by the stockholder (Xxxxxxx) of the Company.
This Agreement and the Merger have been approved and adopted by the
requisite vote of the stockholder (Xxxxxxx) of the Company and of Acquisition
Sub as required by the TBCA.
For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization within the meaning of the provisions of Section
368(a) of the Code.
The Merger is intended to be treated as a "pooling of interests" for
financial accounting purposes under United States generally accepted accounting
principles ("GAAP").
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.01 THE MERGER. Upon the terms and subject to the conditions set
forth in this
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Agreement, and in accordance with the TBCA, at the Effective Time (as defined
in Section 1.02 of this Agreement), Acquisition Sub shall be merged with and
into the Company. As a result of the Merger, the separate corporate existence
of Acquisition Sub shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"). The name of the
Surviving Corporation shall be "The Xxxxxxx Group International, Inc."
1.02 EFFECTIVE TIME. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
IX of this Agreement, the parties hereto shall cause the Merger to be
consummated by filing a Plan of Merger with the Secretary of State of the State
of Texas, in such form as required by, and executed in accordance with the
relevant provisions of, the TBCA (the date and time of the completion of such
filing being the "Effective Time").
1.03 EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the TBCA.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the property, rights,
privileges, powers and franchises of Acquisition Sub and the Company shall vest
in the Surviving Corporation, and all debts, liabilities and duties of
Acquisition Sub and the Company shall become the debts, liabilities and duties
of the Surviving Corporation.
1.04 ARTICLES OF INCORPORATION; BYLAWS. At the Effective Time, the
Articles of Incorporation and the Bylaws of Acquisition Sub, as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation
and the Bylaws of the Surviving Corporation, except that Article I of the
Articles of Incorporation thereof shall be amended to read "The name of the
corporation is The Xxxxxxx Group International, Inc."
1.05 DIRECTORS AND OFFICERS. The directors of Acquisition Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation, and the officers of
Acquisition Sub immediately prior to the Effective Time shall be the officers
of the Surviving Corporation, in each case until their respective successors
are duly elected or appointed and qualified.
1.06 ACQUISITION CONSIDERATION; CONVERSION AND CANCELLATION OF
SECURITIES. At the Effective Time, by virtue of the Merger and without any
action on the part of the Acquiror Companies, the Company or Xxxxxxx:
(a) Subject to the other provisions of this Article I,
all of the Company's common stock, par value $1.00 per share ("Company
Stock"), issued and outstanding immediately prior to the Effective
Time (excluding any Company Stock described in Section 1.06(c) of this
Agreement), shall be converted into 700,000 shares of fully paid and
nonassessable common shares, par value NLG 0.03 Dutch gilders per
share ("Acquiror Shares"), of Acquiror, subject to the escrow of a
portion of such shares pursuant to the terms and conditions set forth
herein. At the Effective Time, Acquiror will cause to be delivered
to,
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and directly deposited with, Bankers Trust Company (the "Escrow
Agent"), for the account and future potential benefit of Xxxxxxx
immediately prior to the Effective Time, a stock certificate
representing 70,000 Acquiror Shares, which certificate shall be
registered as follows: "Bankers Trust Company, f/b/o Xxxxxx X.
Xxxxxxx" All such Acquiror Shares so delivered to the Escrow Agent,
together with all subsequent stock dividends or distributions of other
Acquiror Shares received in respect of such shares while deposited
with the Escrow Agent shall be referred to as "Escrow Shares." The
Escrow Shares shall be subtracted from the number of Acquiror Shares
Xxxxxxx at the Effective Time is entitled to receive pursuant to the
Merger. The Escrow Shares shall be held by the Escrow Agent pursuant
to the terms and conditions of an Escrow Agreement in substantially
the form attached hereto as Exhibit A (the "Escrow Agreement") between
Acquiror, Acquisition Sub, the Company and Xxxxxxx. The Escrow
Agreement shall authorize the Stockholder's Representative to control
the disposition of such Escrow Shares pursuant to the terms of the
Escrow Agreement.
(b) As a result of the conversion pursuant to subsection
1.06(a), all shares of Company Stock shall cease to be outstanding and
shall automatically be canceled and retired.
(c) Notwithstanding any provision of this Agreement to
the contrary, each share of Company Stock held in the treasury of the
Company and each share of Company Stock owned by Acquiror or any
direct or indirect wholly owned subsidiary of Acquiror or of the
Company immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof and no payment shall be
made with respect thereto.
(d) Each share of common stock, par value $.01 per share,
of Acquisition Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock, par
value $.01 per share, of the Surviving Corporation.
1.07 PAYMENT FOR COMPANY STOCK; SURRENDER OF CERTIFICATES.
(a) Exchange Procedures.
(b) Distributions with Respect to Acquiror Shares.
1.08 NO FRACTIONAL SHARES.
1.09 AGREEMENT TO VOTE SHARES. At any meeting of the Company with
respect to any of the following, and at any adjournment thereof, and with
respect to any consent solicited with respect to any of the following, Xxxxxxx
hereby agrees to vote his Company Stock (i) in favor of approval of the Merger
and any matter which could reasonably be expected to facilitate the Merger and
(ii) against approval of any proposal made in opposition to or in competition
with the Merger, against any merger, consolidation, sale of assets,
reorganization or recapitalization with any party, against any liquidation or
winding up of the Company and against any other matter which would,
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or could reasonably be expected to, prohibit or discourage the Merger.
1.10 WITHHOLDING. Acquiror (or any affiliate thereof) shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to Xxxxxxx such amounts as Acquiror (or any
affiliate thereof) is required to deduct and withhold with respect to the
making of such payment under the Code (as hereinafter defined), or any other
provision of federal, state, local or foreign tax law. To the extent that
amounts are so withheld by Acquiror, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to Xxxxxxx in respect of
which such deduction and withholding was made by Acquiror.
1.11 CLOSING. The Closing shall take place at the offices of
Xxxxxx & Xxxxxx L.L.P., 1001 Xxxxxx, 0000 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxx
00000-0000, at (a) 10:00 a.m. on December 18, 1998, (b) if the conditions set
forth in Article X of this Agreement have not been satisfied or waived on or
before December 18, 1998, at 10:00 a.m. on the second business day following
the date on which the conditions set forth in Article X of this Agreement have
been satisfied or waived or (c) at such other place, time and date as the
parties hereto may agree. At the conclusion of the Closing, the parties hereto
shall cause the Plan of Merger to be filed with the Secretary of State of the
State of Texas.
1.12 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Stock thereafter on the records
of the Company.
1.13 TAKING OF NECESSARY ACTION; FURTHER ACTION. Acquiror and the
Company shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger as promptly as possible. If, at
any time after the Effective Time, any such further action is necessary or
desirable to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of the Company or Acquisition Sub,
such corporations shall direct their respective officers and directors to take
all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND XXXXXXX
The Company and Xxxxxxx, jointly and severally, hereby represent and
warrant to Acquiror that:
2.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company is
a corporation, and each of the Company's subsidiaries (as such term in defined
in Section 10.06 herein) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
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incorporation or organization, and each of the Company and its subsidiaries has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted and, except as set forth
in Section 2.01 of the Company Disclosure Schedule (as defined below), is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its
properties makes such qualification necessary, other than where the failure to
be so duly qualified and in good standing could not reasonably be expected to
have a Company Material Adverse Effect. The term "Company Material Adverse
Effect" as used in this Agreement shall mean any change or effect that would be
materially adverse to the financial condition, results of operations, business
or prospects of the Company and its subsidiaries, taken as a whole, at the time
of such change or effect. Section 2.01 of the Disclosure Schedule delivered by
the Company to Acquiror concurrently with the execution of this Agreement (the
"Company Disclosure Schedule") sets forth, as of the date of this Agreement, a
true and complete list of all the Company's directly or indirectly owned
subsidiaries, together with the jurisdiction of incorporation or organization
of each subsidiary and the percentage of each subsidiary's outstanding capital
stock or other equity interests owned by the Company or another subsidiary of
the Company.
2.02 ORGANIZATIONAL DOCUMENTS. The Company has heretofore
furnished or made available to Acquiror complete and correct copies of the
Articles of Incorporation and the Bylaws or the equivalent organizational
documents, in each case as amended or restated to the date hereof, of the
Company and each of its subsidiaries. Neither the Company nor any of its
subsidiaries is in violation of any of the provisions of its Articles of
Incorporation or Bylaws (or equivalent organizational documents).
2.03 CAPITALIZATION.
(a) The authorized capital stock of the Company consists
of 100,000 shares of Common Stock, par value $1.00 per share and there are no
shares of preferred stock. As of the date of this Agreement, 1,000 shares of
Common Stock were issued and outstanding, 0 shares of Company Stock were held
by the Company in its treasury or by the Company's subsidiaries and no shares
of Company Stock were reserved for issuance. Each of the issued shares of
capital stock of, or other equity interests in, each of the Company and its
subsidiaries is duly authorized, validly issued and, in the case of shares of
capital stock, fully paid and nonassessable, and has not been issued in
violation of (nor are any of the authorized shares of capital stock of, or
other equity interests in, the Company or any of its subsidiaries subject to)
any preemptive or similar rights created by statute, the Articles of
Incorporation or Bylaws (or the equivalent organizational documents) of the
Company or any of its subsidiaries, or any agreement to which the Company or
any of its subsidiaries is a party or is bound, and all such issued shares or
other equity interests owned by the Company or a subsidiary of the Company are
owned free and clear of all security interests, liens, claims, pledges,
agreements, limitations on the Company's or such subsidiaries' voting rights,
charges or other encumbrances of any nature whatsoever.
(b) No bonds, debentures, notes or other indebtedness of
the Company having the
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right to vote (or convertible into or exchangeable or exercisable for
securities having the right to vote) on any matters on which shareholders may
vote ("Voting Debt") are issued or outstanding.
(c) Except as set forth in Section 2.03(c) of the Company
Disclosure Schedule, there are no options, warrants or other rights (including
registration rights), agreements, arrangements or commitments of any character
to which the Company or any of its subsidiaries is a party relating to the
issued or unissued capital stock or other equity interests of the Company or
any of its subsidiaries or obligating the Company or any of its subsidiaries to
grant, issue or sell any shares of capital stock, Voting Debt or other equity
interests of the Company or any of its subsidiaries. Except as set forth in
Section 2.03(c) of the Company Disclosure Schedule, there are no obligations,
contingent or otherwise, of the Company or any of its subsidiaries (i) to
repurchase, redeem or otherwise acquire any shares of capital stock or other
securities of the Company or the capital stock or other equity interests of any
subsidiary of the Company or (ii) (other than advances to wholly owned
subsidiaries in the ordinary course of business) to provide material funds to,
or to make any material investment in (in the form of a loan, capital
contribution or otherwise), or to provide any guarantee with respect to the
material obligations of, any subsidiary of the Company or any other person.
Except (i) as set forth in Section 2.03(c) of the Company Disclosure Schedule
or (ii) for subsidiaries of the Company set forth in Section 2.01 of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries
(x) directly or indirectly owns, (y) has agreed to purchase or otherwise
acquire or (z) holds any interest convertible into or exchangeable or
exercisable for, 5% or more of the capital stock or other equity interest of
any corporation, partnership, joint venture or other business association or
entity. Except as set forth in Section 2.03(c) of the Company Disclosure
Schedule or for any agreements, arrangements or commitments between the Company
and its wholly owned subsidiaries or between such wholly owned subsidiaries,
there are no agreements, arrangements or commitments of any character
(contingent or otherwise) pursuant to which any person is or may be entitled to
receive any payment based on, or calculated in accordance with, the revenues or
earnings of the Company or any of its subsidiaries. Except as set forth in
Section 2.03(c) of the Company Disclosure Schedule, there are no voting trusts,
proxies or other agreements or understandings to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound with respect to the voting of any shares of capital stock or other
equity interests of the Company or any of its subsidiaries.
2.04 AUTHORITY. The Company has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Company and, assuming the due authorization, execution and
delivery hereof by Acquiror, constitutes the legal, valid and binding
obligation of the Company.
2.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
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(a) Assuming that all consents, licenses, permits,
waivers, approvals, authorizations, orders, filings and notifications
contemplated by the exceptions to Section 2.05(b) are obtained or made and
except as disclosed in Section 2.05(a) of the Company Disclosure Schedule, the
execution and delivery of this Agreement by the Company does not, and the
performance by the Company of its obligations hereunder, including consummation
of the transactions contemplated hereby, will not (i) conflict with or violate
the Articles of Incorporation or Bylaws, or the equivalent organizational
documents, in each case as amended or restated, of the Company or any of its
subsidiaries, (ii) conflict with or violate any federal, state, foreign or
local law, statute, ordinance, rule or regulation (collectively, "Laws") or
any judgment, order or decree applicable to the Company or any of its
subsidiaries or by or to which any of their respective properties is bound or
subject or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or require payment under, or result in the creation of a lien
or encumbrance on any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by or
to which the Company or any of its subsidiaries or any of their respective
properties is bound or subject.
(b) The execution and delivery of this Agreement by the
Company does not, and the performance by the Company of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not, require the Company to obtain any consent, license, permit, waiver,
approval, authorization or order of, or to make any filing with or notification
to, any governmental or regulatory authority, federal, state, local or foreign
(collectively, "Governmental Entities"), except (i) the filing of the Plan of
Merger with the Secretary of State of the State of Texas, (ii) the applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act"),
(iii) where the failure to obtain such consents, licenses, permits, waivers,
approvals, authorizations or orders, or to make such filings or notifications
could not reasonably be expected to cause a Company Material Adverse Effect or
to prevent the Company from performing its obligations under this Agreement and
(iv) as disclosed in Section 2.05(b) of the Company Disclosure Schedule.
2.06 PERMITS; COMPLIANCE. Except as disclosed in Section 2.06 of
the Company Disclosure Schedule, each of the Company and its subsidiaries is in
possession of all (i) franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, identification and
registration numbers, approvals and orders necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted
(collectively, the "Company Permits"). Section 2.06 of the Company Disclosure
Schedule sets forth a list of each of the Company Permits and the jurisdiction
issuing the same, all of which are in good standing and not subject to
meritorious challenge. Section 2.06 of the Company Disclosure Schedule also
sets forth, as of the date of this Agreement, all actions, proceedings,
investigations or surveys pending or, to the knowledge of the Company or
Xxxxxxx, threatened against the Company or any of its subsidiaries that could
reasonably be expected to result in the loss or revocation of a Company
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Permit. Except as set forth in Section 2.06 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is in conflict with,
in default under or in violation of , and none of them has received, since
December 31, 1996, from any Governmental Entity any written notice with respect
to any conflict with, default under or violation of, (i) any Law applicable to
the Company or any of its subsidiaries or by or to which any of their
respective properties is bound or subject, (ii) any judgment, order or decree
applicable to the Company or any of its subsidiaries or (iii) any of the
Company Permits.
2.07 FINANCIAL STATEMENTS. The Company has provided Acquiror with
true, correct and complete copies of its audited consolidated balance sheet,
income statement and statement of cash flows for the years ended December 31,
1995, 1996 and 1997 and the ten months ended October 31, 1998 (collectively,
the "Company Financial Statements"). Each of the Company Financial Statements
(including, in each case, any related notes thereto), except as set forth in
Section 2.07 of the Company disclosure Schedule, (a) has been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved in compliance with SEC reporting requirements (except (i) to the
extent disclosed therein or required by changes in GAAP, and (ii) as may be
indicated in the notes thereto, and (b) fairly present the consolidated
financial position of the Company and its subsidiaries as of the respective
dates thereof and the consolidated results of operations and cash flows for the
periods indicated (subject, in the case of unaudited consolidated financial
statements for interim periods, to adjustments, consisting only of normal,
recurring accruals, necessary to present fairly such results of operations and
cash flows).
2.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated
by this Agreement or as set forth in Section 2.08 of the Company Disclosure
Schedule, since December 31, 1997 the Company and its subsidiaries have
conducted their respective businesses only in the ordinary course and in a
manner consistent with past practice and there has not been: (i) any damage,
destruction or loss with respect to any assets of the Company or any of its
subsidiaries that, whether or not covered by insurance, would constitute a
Company Material Adverse Effect; (ii) any change by the Company or its
subsidiaries in their significant accounting policies; (iii) except for
dividends by a wholly owned subsidiary of the Company to the Company or to
another wholly owned subsidiary of the Company, any declaration, setting aside
or payment of any dividends or distributions in respect of shares of Company
Stock or the shares of stock of, or other equity interests in, any subsidiary
of the Company or any redemption, purchase or other acquisition of any of the
Company's securities or any of the securities of any subsidiary of the Company;
(iv) any material increase in the benefits under, or the establishment or
amendment of, any bonus, insurance, severance, deferred compensation, pension,
retirement, profit sharing, performance awards (including, without limitation,
the granting of stock appreciation rights or restricted stock awards), stock
purchase or other employee benefit plan, or any increase in the compensation
payable or to become payable to any of the directors or officers of the Company
or the employees of the Company and its subsidiaries as a group; or (v) any
other Company Material Adverse Effect.
2.09 LITIGATION. Except as disclosed in Section 2.09 of the
Company Disclosure Schedule, there is no claim, action, suit, litigation,
proceeding, arbitration or, to the knowledge of the Company
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14
or Xxxxxxx, investigation of any kind, at law or in equity (including actions
or proceedings seeking injunctive relief), pending or, to the knowledge of the
Company or Xxxxxxx, threatened against the Company or any of its subsidiaries
or any properties or rights of the Company or any of its subsidiaries, and
neither the Company nor any of its subsidiaries is subject to any executory
judgment, order, writ, injunction, decree or award of any Governmental Entity,
including without limitation any cease and desist order and any consent decree,
settlement agreement or other similar written agreement with any Governmental
Entity.
2.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) With respect to each employee benefit plan, program,
arrangement and contract (including, without limitation, any "employee benefit
plan," as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), maintained or contributed to by the Company
or any of its subsidiaries, or with respect to which the Company or any of its
subsidiaries could incur liability under Section 4069, 4212(c) or 4204 of ERISA
(the "Benefit Plans"), the Company has delivered or made available to Acquiror
a true and correct copy of (i) the most recent annual report (Form 5500) filed
with the Internal Revenue Service (the "IRS") for each Benefit Plan for which a
Form 5500 is required to be filed, (ii) such Benefit Plan, (iii) each trust
agreement, if any, relating to such Benefit Plan, (iv) the most recent summary
plan description for each Benefit Plan for which a summary plan description is
required, (v) the most recent actuarial report or valuation relating to a
Benefit Plan subject to Title IV of ERISA and (vi) the most recent
determination letter, if any, issued by the IRS with respect to any Benefit
Plan qualified under Section 401 of the Code.
(b) With respect to the Benefit Plans, no event has
occurred and, to the knowledge of the Company or Xxxxxxx, there exists no
condition or set of circumstances, in connection with which the Company or any
of its subsidiaries could be subject to any liability under the terms of such
Benefit Plans, ERISA, the Code or any other applicable Law.
(c) There are no collective bargaining or other labor
union contracts to which the Company or its subsidiaries is a party applicable
to persons employed by the Company or its subsidiaries and no collective
bargaining agreement is being negotiated by the Company or any of its
subsidiaries. There is no pending or, to the knowledge of the Company or
Xxxxxxx, threatened labor dispute, strike or work stoppage against the Company
or any of its subsidiaries. To the knowledge of the Company or any of the
Stockholder, none of the Company, any of its subsidiaries or any of their
respective representatives or employees has committed any unfair labor practice
in connection with the operation of the respective businesses of the Company or
its subsidiaries that could reasonably be expected to have a Company Material
Adverse Effect, and there is no pending or, to the knowledge of the Company or
Xxxxxxx, threatened charge or complaint against the Company or any of its
subsidiaries by the National Labor Relations Board or any comparable state
agency.
(d) Section 2.10(d) of the Company Disclosure Schedule
contains true and correct
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(i) copies of all employment agreements to which the Company or any of its
subsidiaries is a party; (ii) listings of all officers of the Company who have
executed a non-competition agreement with the Company or any of its
subsidiaries; (iii) copies of all severance agreements, programs and policies
of the Company or any of its subsidiaries with or relating to its, or any of
its subsidiaries, employees; and (iv) summary descriptions of all plans,
programs, agreements and other arrangements of the Company or any of its
subsidiaries with or relating to its, or any of its subsidiaries, employees.
Except as set forth in Section 2.10(d) of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries will owe a severance payment or
similar obligation to any of their respective employees, officers or directors
as a result of the Merger or the other transactions contemplated by this
Agreement, and none of such persons will be entitled to severance payments or
other benefits as a result of the Merger or the other transactions
contemplated by this Agreement in the event of the subsequent termination of
their employment.
(e) No Benefit Plan provides retiree medical or retiree
life insurance benefits and (y) neither the Company nor any of its subsidiaries
is contractually or otherwise obligated (whether or not in writing) to provide
life insurance and medical benefits upon retirement or termination of
employment of employees.
(f) Neither the Company nor any of its subsidiaries
contributes to or has an obligation to contribute to, and has not within six
years prior to the date of this Agreement contributed to or had an obligation
to contribute to, a multi-employer plan within the meaning of Section 3(37) of
ERISA.
(g) The Company has not taken any of the following or
other similar actions since December 31, 1997: the acceleration of vesting,
waiving of performance criteria or the adjustment of awards or any other
actions permitted upon a change in control of the Company with respect to any
of the Benefit Plans or any of the plans, programs, agreements, policies or
other arrangements described in Section 2.10(d) of this Agreement.
2.11 TAXES. Except as set forth in Section 2.11 of the Company
Disclosure Schedule,
(a) (i) all returns and reports ("Tax Returns") of or
with respect to any Tax which is required to be filed with respect to the
Company or any its subsidiaries have been duly and timely filed, (ii) all items
of income, gain, loss, deduction and credit or other items required to be
included in each such Tax Return have been so included and all information
provided in each such Tax Return is true, correct and complete in all material
respects, (iii) all Taxes that have become due with respect to the period
covered by each such Tax Return have been timely paid in full, (iv) all
withholding Tax requirements imposed on or with respect to Company or any of
its subsidiaries have been satisfied in all material respects, and (v) no
penalty, interest or other charge is or will become due with respect to the
late filing of any such Tax Return or late payment of any such Tax.
(b) There is no claim against the Company or any of its
subsidiaries for Taxes, and no assessment, deficiency or adjustment has been
asserted or proposed with respect to any Tax
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16
Return of or with respect to the Company or any of its subsidiaries other than
those disclosed (and to which are attached true and complete copies of all
audit or similar reports) in Section 2.11 of the Company Disclosure Schedule.
(c) The total amounts set up as liabilities for current
and deferred Taxes in the Company Financial Statements are sufficient to cover
the payment of all Taxes, whether or not assessed or disputed, which are, or
are hereafter found to be, or to have been, due by or with respect to the
Company and any of its subsidiaries up to and through the periods covered
thereby.
(d) Except for statutory liens for current Taxes not yet
due, no liens for Taxes exist upon any of the assets of the Company or any of
its subsidiaries.
(e) None of the transactions contemplated by this
Agreement will result in any Tax liability or the recognition of any item of
income or gain to the Company or any of its subsidiaries.
(f) Neither the Company nor any of its subsidiaries has
made an election under section 341(f) of the Code.
2.12 POOLING. Neither the Company nor, to the knowledge of the
Company or Xxxxxxx, any of the Company's affiliates has taken or agreed to take
any action that would prevent the Merger from being treated for financial
accounting purposes as a "pooling of interests" in accordance with GAAP and the
rules, regulations and interpretations of the SEC (a "Pooling Transaction").
2.13 AFFILIATES. Section 2.13 of the Company Disclosure Schedule
identifies all persons who, to the knowledge of the Company, may be deemed to
be affiliates of the Company within the meaning of that term as used in Rule
145 promulgated pursuant to the Securities Act, including, without limitation,
all directors and executive officers of the Company.
2.14 CERTAIN BUSINESS PRACTICES. None of the Company, any of its
subsidiaries or any directors, officers, agents or employees of the Company or
any of its subsidiaries (in their capacities as such) has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful purposes
relating to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, (iii) consummated any transaction, made any payment,
entered into any agreement or arrangement or taken any other action in
violation of Section 1128B(b) of the Social Security Act, as amended, or (iv)
made any other unlawful payment.
2.15 ENVIRONMENTAL. The Company and each of its subsidiaries is in
full compliance with all laws, rules, regulations, and other legal
requirements, foreign and domestic, relating to the prevention of pollution and
the protection of the environment, including all such legal requirements
pertaining to human health and safety (collectively, "Environmental Laws").
There is no physical condition existing on any property ever owned or operated
by the Company or any of its subsidiaries
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nor are there any physical conditions existing on any other property that may
have been impacted by the operations of the Company or any of its subsidiaries
that could give rise to any remedial obligation under any Environmental Laws or
that could result in any liability to any third party claiming damage to person
or property as a result or consequence of such physical conditions. None of the
Company or any of its subsidiaries has caused or permitted its businesses,
properties or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose of, transfer, produce, or process any Hazardous
Substance (as defined below) except in compliance with all applicable laws,
rules, regulations, orders, judgments and decrees, and has not caused or
permitted the Release (as defined below) of any Hazardous Substance on or off
the site of any property of any of the Company or any of its subsidiaries. The
term "Hazardous Substance" shall mean any hazardous waste, as defined by 42
U.S.C. 6903(5), any hazardous substance, as defined by 42 U.S.C. 9601(14), any
pollutant or contaminant, as defined by 42 U.S.C. 9601(33), and all toxic
substances, hazardous materials, or other chemical substances regulated by any
other law, rule, or regulation. The term "Release" shall have the meaning set
forth in 42 U.S.C. 9601(22).
2.16 UNDISCLOSED LIABILITIES. Except as and to the extent of the
amounts specifically reflected or accrued for in the balance sheet dated as of
October 31, 1998, included in the Company Financial Statements, or set forth in
Section 2.16 of the Company Disclosure Schedule, none of the Company or any of
its subsidiaries has any liabilities or obligations of any nature whether
absolute, accrued, contingent or otherwise, and whether due or to become due.
Neither the Company nor Xxxxxxx knows of any basis for the assertion against
the Company or any of its subsidiaries of any such liability or obligation not
fully reflected or adequately accrued for in the Company Financial Statements
or set forth in Section 2.16 of the Company Disclosure Schedule.
2.17 CERTAIN AGREEMENTS. Except as set forth in Section 2.17 of
the Company Disclosure Schedule, none of the Company or any of its subsidiaries
is a party to, or bound by, any contract, agreement or organizational document
which purports to restrict, by virtue of a noncompetition, territorial
exclusivity or other provision covering such subject matter, the scope of the
business or operations of any of the Company or any of its subsidiaries
geographically or otherwise.
2.18 CONTRACTS AND COMMITMENTS. Section 2.18 of the Company
Disclosure Schedule sets forth (i) a list of each contract or commitment to
which the Company or any of its subsidiaries is a party or by which its or
their property is bound that involves consideration or other expenditure in
excess of $25,000 or performance over a period of more than six months or that
is otherwise material to the business or operations of the Company and its
subsidiaries, taken as a whole ("Material Contracts"); (ii) a list of all real
or personal property leases to which any of the Company or any of its
subsidiaries is a party involving consideration or other expenditure in excess
of $25,000 over the term of the lease ("Material Leases"); (iii) a list of
guarantees, or agreements to indemnify or be contingently liable for, the
payment or performance by any person or business entity to which any of the
Company or any of its subsidiaries is a party ("Guarantees"); and (iv) a list
of contracts or other formal or informal understandings between the Company or
any of its subsidiaries and any of its officers, directors, employees,
consultants, agents or shareholder (or any of such shareholders' family members
or affiliates) ("Affiliate Agreements"). True and complete copies of each
Material
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Contract, Material Lease, Guarantee and Affiliate Agreement have been furnished
to Acquiror prior to the date hereof. Except as specifically disclosed in
Section 2.18 of the Company Disclosure Schedule, each of the Material
Contracts, Material Leases, Guarantees and Affiliate Agreements constitutes the
valid and legally binding obligation of the parties thereto and is in full
force and effect without default on the part of the Company, and to the
knowledge of the Company Xxxxxxx, any other party thereto.
2.19 AFFILIATE INTERESTS. Neither Xxxxxxx nor any employee,
consultant, officer or director, or former shareholder, employee, consultant,
officer or director, of the Company or any of its subsidiaries has any interest
in any property, tangible, or intangible, including, without limitation,
patents, trade secrets, other confidential business information, trademarks,
service marks or trade names used in or pertaining to the business of the
Company or any of its subsidiaries, except (with respect to the Stockholder)
for the normal rights of a shareholder.
2.20 INTELLECTUAL PROPERTY. The Company or one or more of its
subsidiaries own, or hold licenses under or otherwise have the right to use or
sublicense, all foreign and domestic patents, trademarks (common law and
registered), trademark registration applications, service marks (common law and
registered), service xxxx registration applications, trade names and
copyrights, copyright applications, trade secrets, know-how and other
proprietary information as are necessary for the conduct of the business of the
Company and its subsidiaries as currently conducted. A list of all such
intellectual property is set forth in Section 2.20 of the Company Disclosure
Schedule. Neither the Company nor any of its subsidiaries is currently in
receipt of any notice of infringement or notice of conflict with the asserted
rights of others in any patents, trademarks, service marks, trade names, trade
secrets and copyrights owned or held by other persons, except, in each case,
for matters that could not reasonably be expected to have a Company Material
Adverse Effect. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate or breach the
terms of or cause any cancellation of any material license held by the Company
or any of its subsidiaries under, any patent, trademark, service xxxx, trade
name, trade secret or copyright.
2.21 BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or Xxxxxxx.
2.22 INSURANCE. Section 2.22 of the Company Disclosure Schedule
sets forth a list of all policies of insurance currently in effect relating to
the business or operations of the Company and its subsidiaries (true and
complete copies of which have been furnished to Acquiror). Such insurance
policies are in full force and effect. The Company and each of its
subsidiaries are presently insured, and during each of the past five calendar
years have been insured, against such risks as companies engaged in a similar
business would, in accordance with good business practice, customarily be
insured. Except as set forth in Section 2.22 of the Company Disclosure
Schedule, the policies of general liability, malpractice or professional
liability, fire, theft and other insurance maintained with respect to the
operations, assets or businesses of the Company and its subsidiaries provide
adequate
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19
coverage against loss. The Company or its subsidiaries have given in a timely
manner to their insurers all notices required to be given under such insurance
policies with respect to all claims and actions covered by insurance, and no
insurer has denied coverage of any such claims or actions or reserved it rights
in respect of or rejected any of such claims. None of the Company or any of
its subsidiaries has received any notice or other communication from any such
insurer canceling or materially amending any of such insurance policies, and no
such cancellation is pending or threatened.
2.23 PROPERTIES. Except as set forth in Section 2.23 of the
Company Disclosure Schedule, the Company and its subsidiaries have good and
marketable title, free and clear of all liens to all their material properties
and assets whether tangible or intangible, real, personal or mixed, reflected
in the Company Financial Statements as being owned by the Company and its
subsidiaries as of the date thereof, other than (i) any properties or assets
that have been sold or otherwise disposed of in the ordinary course of business
since the date of such financial statements, (ii) liens disclosed in the notes
to such financial statements and (iii) liens arising in the ordinary course of
business. All buildings, and all fixtures, equipment and other property and
assets that are material to its business on a consolidated basis, held under
leases or sub-leases by the Company or any of its subsidiaries are held under
valid instruments enforceable in accordance with their respective terms,
subject to applicable laws of bankruptcy, insolvency or similar laws relating
to creditors' rights generally and to general principles of equity (whether
applied in a proceeding in law or equity). All of the Company's and its
subsidiaries' equipment in regular use has been reasonably maintained and is in
serviceable condition, reasonable wear and tear excepted.
2.24 GOOD TITLE. Xxxxxxx is the sole record and beneficial owner
of, and has good and valid title to, the number of shares of Company Stock,
free and clear of all liens, claims, encumbrances, options, voting trusts or
agreements, proxies or other claims or charges of any nature whatsoever (other
than resulting from this Agreement).
2.25 CERTAIN SECURITIES LAW MATTERS.
(a) Xxxxxxx, either alone or with his purchaser
representative as defined in Rule 501(h) under the Securities Act of 1933, as
amended ("Securities Act"), if any, has substantial experience in evaluating
and investing in private placement transactions so that such Xxxxxxx is capable
of evaluating the merits and risks of its investment in the Acquiror Shares.
Xxxxxxx, by reason of such Andrew's business or financial experience, either
alone or with his purchaser representative as defined in Section 501(h) under
the Securities Act, if any, has the capacity to protect his own interests in
connection with the acquisition of the Acquiror Shares hereunder. Xxxxxxx has
designated himself, as an "accredited investor" on the signature page hereto is
an "accredited investor" as defined in Rule 501 of Regulation D promulgated
pursuant to the Securities Act. Xxxxxxx has received copies of the Acquiror
SEC Reports (as such term is defined in Section 3.05), as well as certain
financial and other information on the Company and the Acquiror. Xxxxxxx is
familiar with the business and financial condition, properties, operations and
prospects of Acquiror. Xxxxxxx has had an opportunity to discuss Acquiror's
business and financial condition,
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20
properties, operations and prospects with Acquiror's management. Xxxxxxx has
also had an opportunity to ask questions of officers of Acquiror, which
questions were answered to his satisfaction. Xxxxxxx understands that such
discussion was intended to describe certain aspects of Acquiror's business and
financial condition, properties, operations and prospects, but were not a
thorough or exhaustive description.
(b) Xxxxxxx understands that the Acquiror Shares will be
"restricted securities" under the applicable federal securities laws and that
the Securities Act and the rules of the SEC provide in substance that he may
dispose of the Acquiror Shares only pursuant to an effective registration
statement under the Securities Act or an exemption therefrom, and it
understands that Acquiror has no obligation or intention to register the
Acquiror Shares, or to take action so as to permit sales pursuant to the
Securities Act (including Rule 144) thereunder which permits limited resales of
shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
issue, the resale occurring not less than one (1) year after a party has
purchased and paid for the security to be sold, the sale being effected through
a "broker's transaction" or in transactions with a "market maker" and the
number of shares being sold not exceeding specified limitations. Accordingly,
Xxxxxxx understands that under the SEC's rules, he may dispose of the Acquiror
Shares in transactions which are exempt from registration under the Securities
Act. As a consequence of all of the foregoing, Xxxxxxx understands that he
must bear the economic risk of the investment in the Acquiror Shares for an
indefinite period of time.
(c) Xxxxxxx acknowledges and agrees that he is not
relying upon Acquiror or the Company or their respective officers, directors,
employees or agents, as to the United States federal income tax or any other
tax consequences to Xxxxxxx of the transactions contemplated by this Agreement.
As to all such tax consequences, Xxxxxxx hereby agrees and represents that he
has consulted with his own legal and tax advisors to the extent that he has
deemed such consultation necessary or appropriate, that he is making his own
determination as to what the tax consequences of the transactions contemplated
hereby will be to him and that neither Acquiror nor the Company is making any
representation, express or implied, as to any such tax consequences.
2.26 AUTHORIZATION AND VALIDITY OF AGREEMENT. Xxxxxxx has the full
power, legal right, capacity and authority to enter into, execute and deliver
this Agreement and to carry out and perform the transactions contemplated
hereby. This Agreement constitutes a valid and binding obligation of Xxxxxxx,
enforceable against Xxxxxxx in accordance with its terms.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to the Company and the
Stockholder that:
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3.01 ORGANIZATION AND QUALIFICATION. Acquiror is a limited
liability company duly organized, validly existing and in good standing under
the laws of The Netherlands and Acquisition Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. Each of Acquiror Companies has all requisite power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary,
other than where the failure to be so duly qualified and in good standing could
not reasonably be expected to have an Acquiror Material Adverse Effect. The
term "Acquiror Material Adverse Effect" as used in this Agreement shall mean
any change or effect that would be materially adverse to the financial
condition, results of operations, business or prospects of Acquiror and its
subsidiaries, taken as a whole, at the time of such change or effect.
3.02 CAPITALIZATION.
(a) The authorized capital stock of Acquiror consists of
(i) 100,000,000 Acquiror Shares, of which, as of ____________, 1998: (A)
___________ were issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable and were not issued in violation
of any preemptive or similar rights created by statute, Acquiror's Articles of
Association (collectively, the "Acquiror Organizational Documents") or any
agreement to which Acquiror is a party or is bound; (B) no shares were held in
the treasury of Acquiror and (C) __________ shares were reserved for future
issuance pursuant to stock option plans of Acquiror and (ii) 3,000,000
Preference Shares, par value NLG 0.03, none of which were issued or
outstanding.
(b) The Acquiror Shares to be issued pursuant to the
Merger will be duly authorized, validly issued, fully paid and nonassessable.
3.03 AUTHORITY. Each of the Acquiror Companies has all requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Acquiror Companies
and the performance by each of the Acquiror Companies of its obligations
hereunder, including the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action and no other
corporate proceedings on the part of either of the Acquiror Companies are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
each of the Acquiror Companies and, assuming the due authorization, execution
and delivery hereof by the other parties hereto, constitutes the legal, valid
and binding obligation of each of the Acquiror Companies.
3.04 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming that all consents, licenses, permits,
waivers, approvals, authorizations, orders, filings and notifications
contemplated by the exceptions to Section 3.04(b)
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are obtained or made and except as otherwise disclosed in Section 3.04(a) of
the Disclosure Schedule delivered by the Acquiror to the Company
contemporaneously with the execution and delivery of this Agreement (the
"Acquiror Disclosure Schedule"), the execution and delivery of this Agreement
by the Acquiror Companies does not, and performance of their respective
obligations hereunder, including the consummation of the transactions
contemplated hereby, will not (i) conflict with or violate the Acquiror
Organizational Documents or the Articles of Incorporation or Bylaws of
Acquisition Sub, (ii) conflict with or violate any Laws in effect as of the
date of this Agreement applicable to Acquiror or any of Acquiror's subsidiaries
or by or to which any of their properties is bound or subject or (iii) result
in any breach of or constitute a default (or an event that with or without
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
or require payment under, or result in the creation of a lien or encumbrance on
any of the properties or assets of Acquiror or any of Acquiror's subsidiaries
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Acquiror
or any of Acquiror's subsidiaries is a party or by or to which Acquiror or any
of Acquiror's subsidiaries or any of their respective properties is bound or
subject, except for any such conflicts, violations, breaches, defaults, events,
rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or encumbrances that could not reasonably be expected to
have an Acquiror Material Adverse Effect.
(b) The execution and delivery of this Agreement by the
Acquiror Companies does not, and the performance of this Agreement by the
Acquiror Companies will not, including the consummation of the transactions
contemplated hereby, require Acquiror or Acquisition Sub to obtain any
consent, license, permit, waiver approval, authorization or order of, or to
make any filing with or notification to, any Governmental Entities, except (i)
for the filing of the Plan of Merger with the Secretary of State of the State
of Texas, (ii) the applicable requirements of the HSR Act, (iii) the applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the National Association of Securities Dealers, Inc. (the "NASD"),
(iv) where the failure to obtain such consents, licenses, permits, waivers,
approvals, authorizations or orders, or to make such filings or notifications
could not reasonably be expected to prevent Acquiror or Acquisition Sub from
performing their respective obligations under this Agreement and (v) as
disclosed in Section 3.04(b) of the Acquiror Disclosure Schedule.
3.05 REPORTS; FINANCIAL STATEMENTS.
(a) Since December 31, 1997, Acquiror has filed all
forms, reports, statements and other documents required to be filed with the
SEC, including without limitation (i) all Annual Reports on Form 10-K, (ii) all
Quarterly Reports on Form 10-Q, (iii) all proxy statements relating to meetings
of shareholders (whether annual or special), (iv) all Current Reports on Form
8-K and (v) all other reports, schedules, registration statements or other
documents (collectively referred to as the "Acquiror SEC Reports"). The
Acquiror SEC Reports were prepared in all material respects in accordance with
the requirements of applicable Law (including the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to the Acquiror SEC Reports) and the Acquiror SEC Reports
did not at the time they were filed contain
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any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Each of the historical consolidated financial
statements (including, in each case, any related notes thereto) contained in
the Acquiror SEC Reports (i) have been prepared in accordance with the
published rules and regulations of the SEC and generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except (A) to the extent disclosed therein or required by changes in generally
accepted accounting principles, (B) as may be indicated in the notes thereto
and (C) in the case of the unaudited financial statements, as permitted by the
rules and regulations of the SEC) and (ii) fairly present the consolidated
financial position of Acquiror and its subsidiaries as of the respective dates
thereof and the consolidated results of operations and cash flows for the
periods indicated (subject, in the case of unaudited consolidated financial
statements for interim periods, to adjustments, consisting only of normal,
recurring accruals, necessary to present fairly such results of operations and
cash flows).
3.06 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Acquiror SEC Reports filed prior to the date of this Agreement or as
contemplated by this Agreement, since December 31, 1997, Acquiror and its
subsidiaries have conducted their respective businesses only in the ordinary
course and in a manner consistent with past practice and there has not been any
Acquiror Material Adverse Effect.
3.07 POOLING. Neither Acquiror nor, to the knowledge of Acquiror,
any of its affiliates has taken or agreed to take any action that would prevent
the Merger from being treated for financial accounting purposes as a Pooling
Transaction in accordance with GAAP and the rules, regulations and
interpretations of the SEC.
3.08 BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Acquiror.
ARTICLE IV
COVENANTS OF XXXXXXX
4.01 AFFIRMATIVE COVENANT. Xxxxxxx covenants and agrees that,
prior to the Effective Time, he will take all commercially reasonable actions
necessary to ensure that the Company complies with Articles V and VII hereof.
4.02 NEGATIVE COVENANTS. Xxxxxxx covenants and agrees that, prior
to the Effective Time, he will not:
(a) take any action that reasonably could be expected to
result in (i) any of the
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representations and warranties of Xxxxxxx and the Company set forth in
Article II hereof becoming untrue or (ii) any of the conditions set
forth in Article X hereof not being satisfied; or
(b) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to
facilitate, any inquiries or the making of any proposal relating to,
or that may reasonably be expected to lead to, any Competing
Transaction, or enter into discussions or negotiate with any person or
entity in furtherance of such inquiries or to obtain a Competing
Transaction, or agree to, or endorse, any Competing Transaction, or
authorize or permit any agent, investment banker, financial advisor,
attorney, accountant or other representative retained by Xxxxxxx to
take any such action, and Xxxxxxx shall promptly notify Acquiror of
all relevant terms of any such inquiries or proposals received by
Xxxxxxx or by any such agent, investment banker, financial advisor,
attorney, accountant or other representative relating to any of such
matters and if such inquiry or proposal is in writing, Xxxxxxx shall
promptly deliver or cause to be delivered to Acquiror a copy of such
inquiry or proposal. For purposes of this Agreement, "Competing
Transaction" shall mean any merger, consolidation, share exchange,
business combination or similar transaction involving the Company or
any of its subsidiaries or the acquisition in any manner, directly or
indirectly, of a material interest in any voting securities of, or a
material equity interest in a substantial portion of the assets of,
the Company or any of its subsidiaries, other than the transactions
contemplated by this Agreement.
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company hereby
covenants and agrees that, prior to the Effective Time, unless otherwise
expressly contemplated by this Agreement or consented to in writing by
Acquiror, the Company will and will cause each of its subsidiaries to:
(a) operate its business in the usual and ordinary course
consistent with past practices;
(b) use all reasonable efforts to preserve substantially
intact its business organization, maintain its rights and franchises,
retain the services of its respective officers and key employees and
maintain its relationships with its respective customers and
suppliers;
(c) maintain and keep its properties and assets in as
good repair and condition as at present, ordinary wear and tear
excepted, and maintain supplies and inventories in quantities
consistent with its customary business practice;
(d) use all reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage
to that currently maintained;
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(e) ensure that the aggregate of (i) cash on hand and
(ii) accounts receivables at the Company shall not be less than
$6,863,000 and the aggregate outstanding balance of (i)long-term debt
and (ii) short-term debt shall not be greater than $____________
[October 31, 1998 figure];
(f) ensure that the net worth be no less than
$[____________] plus all net income earned from October 31, 1998
through the closing date; and
(g) use its best efforts to ensure that Xxxxxxx
Representative shall execute and deliver, along with Acquiror, the
Acquisition Sub and the Escrow Agent, the Escrow Agreement.
5.02 NEGATIVE COVENANTS OF THE COMPANY. Except as expressly
contemplated by this Agreement or otherwise consented to in writing by
Acquiror, from the date of this Agreement until the Effective Time, the Company
will not do, and will not permit any of its subsidiaries to do, any of the
following:
(a) (i) increase the compensation payable to or to become
payable to any director or executive officer; (ii) increase the
compensation payable or pay bonuses to employees of the Company
(excluding payments made pursuant to agreements disclosed in Section
23.10(d) of the Company Disclosure Schedule) other than in the
ordinary course of business, (iii) grant any severance or termination
pay (other than pursuant to the normal severance practices of the
Company or its subsidiaries as in effect on the date of this
Agreement) to, or enter into any employment or severance agreement
with, any director, officer or employee; (iv) except as set forth in
Section 2.10(d) of the Company Disclosure Schedule, establish, adopt
or enter into any employee benefit plan or arrangement or (v) except
as may be required by applicable law or as set forth in Section
2.10(d) of the Company Disclosure Schedule, amend, or take any other
actions (including, without limitation, the acceleration of vesting,
waiving of performance criteria or the adjustment of awards or any
other actions permitted upon a "change in control" (as defined in the
respective plans) of the Company, with respect to any of the Benefit
Plans or any of the plans, programs, agreements, policies or other
arrangements described in Section 2.10(d) of this Agreement;
(b) declare or pay any dividend on, or make any other
distribution in respect of, outstanding shares of capital stock or
other equity interests, except dividends by a wholly owned subsidiary
of the Company to the Company or another wholly owned subsidiary of
the Company;
(c) (i) except as described in Section 2.03(c) of the
Company Disclosure Schedule, redeem, purchase or otherwise acquire any
shares of its or any of its subsidiaries' capital stock or any
securities or obligations convertible into or exchangeable for any
shares of its or its subsidiaries' capital stock (other than any such
acquisition directly from any wholly owned subsidiary of the Company
in exchange for capital contributions or loans to
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such subsidiary), or any options, warrants or conversion or other
rights to acquire any shares of its or its subsidiaries' capital stock
or any such securities or obligations; (ii) effect any reorganization
or recapitalization of the Company or any of its subsidiaries; or
(iii) split, combine or reclassify any of its or its subsidiaries'
capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for,
shares of its or its subsidiaries' capital stock;
(d) (i) except as set forth in Section 2.03(a) hereof or
as described in Section 2.03(c) of the Company Disclosure Schedule,
issue (whether upon original issue or out of treasury), sell, grant,
award, deliver or limit the voting rights of any shares of any class
of its or its subsidiaries' capital stock, any securities convertible
into or exercisable or exchangeable for any such shares, or any
rights, warrants or options to acquire, any such shares; (ii) amend or
otherwise modify the terms of any such rights, warrants or options the
effect of which shall be to make such terms materially more favorable
to the holders thereof; or (iii) take any action to accelerate the
vesting of any of the stock options;
(e) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion
of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization
or division thereof, or otherwise acquire or agree to acquire any
assets of any other person (other than the purchase of assets from
suppliers or vendors in the ordinary course of business and consistent
with past practice);
(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, any of its assets or any
assets of any of its subsidiaries, except for pledges or dispositions
of assets in the ordinary course of business and consistent with past
practice;
(g) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to
facilitate, any inquiries or the making of any proposal relating to,
or that may reasonably be expected to lead to, any Competing
Transaction, or enter into discussions or negotiate with any person or
entity in furtherance of such inquiries or to obtain a Competing
Transaction, or agree to, or endorse, any Competing Transaction, or
authorize or permit any of the officers, directors, employees or
agents of the Company or any of its subsidiaries or any agent,
investment banker, financial advisor, attorney, accountant or other
representative retained by the Company or any of the Company's
subsidiaries to take any such action, and the Company shall promptly
notify Acquiror of all relevant terms of any such inquiries or
proposals received by the Company or any of its subsidiaries or by any
such officer, director, employee, agent, investment banker, financial
advisor, attorney, accountant or other representative relating to any
of such matters and if such inquiry or proposal is in writing, the
Company shall promptly deliver or cause to be delivered to Acquiror a
copy of such inquiry or proposal;
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(h) release any third party from its obligations under
any existing standstill agreement or arrangement relating to a
Competing Transaction or otherwise under any confidentiality or other
similar agreement relating to information material to the Company or
any of its subsidiaries;
(i) propose to adopt any amendments to its Articles of
Incorporation or its Bylaws that would have an adverse effect on the
consummation of the transactions contemplated by this Agreement;
(j) (i) change any of its significant accounting policies
or (ii) make or rescind any express or deemed election relating to
Taxes, settle or compromise any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, or change any of its methods of
reporting income or deductions for federal income tax purposes from
those employed in the preparation of the federal income tax returns
for the taxable year ending December 31, 1997, except, in the case of
clause (i) or clause (ii), as may be required by Law or generally
accepted accounting principles;
(k) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond,
debenture or similar instrument or under any financing lease, whether
pursuant to a sale-and-leaseback transaction or otherwise, except in
the ordinary course of business consistent with past practice;
(l) enter into any material arrangement, agreement or
contract with any third party (other than customers in the ordinary
course of business); or
(m) agree in writing or otherwise to do any of the
foregoing.
ARTICLE VI
COVENANTS OF ACQUIROR
6.01 AFFIRMATIVE COVENANTS OF ACQUIROR. Acquiror hereby covenants
and agrees that, prior to the Effective Time, unless otherwise expressly
contemplated by this Agreement or consented to in writing by the Company,
Acquiror will:
(a) use all reasonable efforts to preserve substantially
intact its business organization;
(b) maintain and keep its properties and assets in as
good repair and condition as at present, ordinary wear and tear
excepted, and maintain supplies and inventories in quantities
consistent with its customary business practice; and
(c) use all reasonable efforts to keep in full force and
effect insurance and bonds
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comparable in amount and scope of coverage to that currently
maintained.
6.02 NEGATIVE COVENANTS OF ACQUIROR. Except as expressly
contemplated by this Agreement or otherwise consented to in writing by the
Company, from the date of this Agreement until the Effective Time, Acquiror
will not do any of the following:
(a) amend any of the material terms or provisions of the
Acquiror Shares;
(b ) knowingly take any action that would result in a
failure to maintain the listing of the shares of the Acquiror on the
New York Stock Exchange Stock Market;
(c) propose to adopt any amendments to the Acquiror
Organizational Documents that would have an adverse effect on the
consummation of the transactions contemplated by this Agreement; or
(d) agree in writing or otherwise to do any of the
foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS. The Company and Xxxxxxx
shall give prompt notice to Acquiror, and Acquiror shall give prompt notice to
the Company, orally and in writing, of (i) the occurrence, or failure to occur,
of any event which occurrence or failure would be likely to cause any
representation or warranty of the party giving such notice contained in this
Agreement to be untrue or inaccurate at any time from the date hereof to the
Effective Time, (ii) any material failure of the party giving such notice to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by such person hereunder within the time specified therefor and
(iii) any change or event having, or which, insofar as can be reasonably
foreseen, could have, a material adverse effect on the financial condition,
results of operations, business or prospects of Acquiror or the Company.
7.02 ACCESS AND INFORMATION.
(a) The Company shall, and shall cause its subsidiaries
to, (i) afford to Acquiror and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Acquiror Representatives") access during ordinary business hours and at other
reasonable times, upon reasonable prior notice, to the officers, employees,
accountants, agents, properties, offices and other facilities of the Company
and its subsidiaries and to the books and records thereof and (ii) furnish
promptly to Acquiror and the Acquiror Representatives such information
concerning the business, properties, contracts, records and personnel of the
Company and its subsidiaries (including, without limitation, financial,
operating and other data and information) as may be reasonably requested, from
time to time, by Acquiror or the Acquiror
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Representatives.
(b) Acquiror shall, and shall cause its subsidiaries to,
(i) afford to the Company and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Company Representatives") access during ordinary business hours, upon
reasonable prior notice, to the officers, employees, accountants, agents,
properties, offices and other facilities of Acquiror and its subsidiaries and
to the books and records thereof and (ii) furnish promptly to the Company and
the Company Representatives such information concerning the business,
properties, contracts, records and personnel of Acquiror and its subsidiaries
(including, without limitation, financial, operating and other data and
information) as may be reasonably requested, from time to time, by the Company
or the Company Representatives.
(c) Notwithstanding the foregoing provisions of this
Section 7.02, neither party shall be required to grant access or furnish
information to the other party to the extent that such access or the furnishing
of such information is prohibited by Law or contract. No investigation by the
parties hereto made heretofore or hereafter shall affect the representations
and warranties of the parties that are contained herein and each such
representation and warranty shall survive such investigation.
(d) Each party to this Agreement shall hold in confidence
all nonpublic information received from the other party to this Agreement until
such time as such information is otherwise publicly available and, if this
Agreement is terminated, each party will deliver to the other party all
documents, work papers and other materials (including copies) obtained by such
party or on its behalf from another party as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution hereof.
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS.
(a) The Company and Acquiror shall each use, and shall
cause each of their respective subsidiaries to use, and the Stockholder shall
use all reasonable efforts promptly (i) to take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper
or advisable under applicable Law or otherwise to consummate and make effective
the transactions contemplated by this Agreement, (ii) to obtain from any
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained by the Company, Acquiror or
Xxxxxxx, respectively, or any of the Company's or Acquiror's respective
subsidiaries, in connection with the authorization, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, (iii) to make all necessary filings, and thereafter make
any other required submissions, with respect to this Agreement and the Merger
required under (A) the Securities Act and the Exchange Act and the rules and
regulations thereunder, and any other applicable federal or state securities
laws, (B) the HSR Act and (C) any other applicable Law; provided that Acquiror
and the Company shall cooperate with each other in connection with the making
of all such filings, including providing copies of all such documents to the
nonfiling party and its advisors prior to filing and, if requested, shall
accept all
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reasonable additions, deletions or changes suggested in connection therewith.
The Company and Acquiror shall furnish all information required for any
application or other filing to be made pursuant to the rules and regulations of
any applicable Law in connection with the transactions contemplated by this
Agreement.
(b) Acquiror, the Company and Xxxxxxx agree, and Acquiror
and the Company shall cause each of their respective subsidiaries, to cooperate
and to use all reasonable efforts to contest and resist any action, including
legislative, administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order (whether
temporary, preliminary or permanent) (an "Order") that is in effect and that
restricts, prevents or prohibits the consummation of the Merger or any other
transactions contemplated by this Agreement, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal
and all available legislative action. Acquiror, the Company and Xxxxxxx also
agree to take any and all reasonable actions, including, without limitation,
the disposition of assets or the withdrawal from doing business in particular
jurisdictions, required by regulatory authorities as a condition to the
granting of any approvals required in order to permit the consummation of the
Merger or as may be required to avoid, lift, vacate or reverse any legislative
or judicial action that would otherwise cause any condition to the Merger not
to be satisfied; provided, however, that in no event shall any party take, or
be required to take, any action that could reasonably be expected to have a
Company Material Adverse Effect or an Acquiror Material Adverse Effect.
(c) The Company, Acquiror and Xxxxxxx shall each promptly
give (or shall cause their respective subsidiaries to give) any notices
regarding the Merger, this Agreement or the transactions contemplated hereby to
third parties required by Law or by any contract, license, lease or other
agreement to which such person is a party or by which such person is bound, and
use (and cause its subsidiaries to use) all reasonable efforts to obtain any
third party consents (i) necessary, proper or advisable to consummate the
transactions contemplated by this Agreement, (ii) otherwise required under any
contracts, licenses, leases or other agreements in connection with the
consummation of the transactions contemplated by this Agreement or (iii)
required to prevent a Company Material Adverse Effect or an Acquiror Material
Adverse Effect, respectively, from occurring after the Effective Time.
(d) If any party shall fail to obtain any third party
consent described in subsection (c)(i) above, such party shall use all
reasonable efforts, and shall take any such actions reasonably requested by the
other parties, to limit the adverse effect upon the Company and Acquiror, their
respective subsidiaries, and their respective businesses resulting, or which
could reasonably be expected to result after the Effective Time, from the
failure to obtain such consent.
7.04 AFFILIATES; POOLING. The Company shall use all reasonable
efforts to obtain and deliver to Acquiror an executed letter agreement,
substantially in the form of Exhibit C hereto, from (i) each person identified
as an affiliate of the Company in Section 2.13 of the Company Disclosure
Schedule within 5 days after the execution hereof, (ii) any person who may be
deemed to have become an affiliate of the Company after the date of this
Agreement and on or prior to the Effective
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Time as soon as practicable after such person attains such status and (iii) any
person whose agreement thereto may be deemed reasonably necessary by Acquiror
to sustain the Merger's status as a Pooling Transaction on or prior to the
Effective Time.
7.05 PUBLIC ANNOUNCEMENTS. Acquiror and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the Merger and shall not issue any
such press release or make any such public statement prior to such
consultation; provided, however, that a party may, without consulting with the
other party, issue such a press release or make such a public statement if
required by applicable Law or the rules of the NASD or a national securities
exchange if such party has used commercially reasonable efforts to consult with
the other party but has been unable to do so in a timely manner.
7.06 EXPENSES. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses. The Company shall have fully paid all outside
legal and accounting expenses incurred in connection with this Agreement on or
before the Closing.
7.07 EMPLOYEES OF COMPANY. As soon as reasonably practicable after
the Effective Time, Acquiror shall provide employee benefit plans and
arrangements to employees of the Company and its subsidiaries that are similar
to the employee benefit plans and arrangements of Acquiror for similarly
situated employees of the Acquiror as in effect immediately prior to the
Effective Time. The employees of Company and its subsidiaries shall be
credited for their actual years of service with the Company for purposes of
eligibility, vesting and benefit accrual under all Acquiror benefit plans
including, but not limited to, vacation, severance, retirement and disability
plans. Such employee benefits under the Acquiror medical plan shall not be
subject to any exclusions for any pre-existing conditions, and credit shall be
received for any deductibles or out-of-pocket amounts previously paid. Nothing
in this Agreement is intended to confer upon any employee of the Company or its
subsidiaries retained ("Retained Employees") any right to continued employment
after evaluation by Acquiror and its affiliates of their employment needs at
any time after the Closing. Notwithstanding any provision in this Agreement to
the contrary, Acquiror expressly reserves the right to amend, modify, or
terminate any benefit plan or program established or maintained by Acquiror or
any of its affiliates (including, without limitation, the Company or its
subsidiaries) for the benefit of the Retained Employees.
7.08 TAX-FREE REORGANIZATION. Subject to the terms and conditions
hereof, Acquiror and the Company shall each use its best efforts to cause the
Merger to be treated as a reorganization within the meaning of Section 368(a)
of the Code. Acquiror shall cause the Company to comply with all applicable
reporting requirements under Section 367(a) of the Code and U.S. Treasury
Regulations issued thereunder.
ARTICLE VIII
INDEMNIFICATION
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8.01 IN GENERAL. Subject to the terms and conditions of this
Article IX, Xxxxxxx hereby agrees, to indemnify, defend and hold harmless
Acquiror and its directors, officers, employees, consultants, affiliates and
controlling persons (hereinafter, including the Company and its subsidiaries
after the Effective Time (collectively, the "Acquiror Indemnified Parties"),
from and against all Claims asserted against, resulting from, imposed upon or
incurred by Acquiror or any Acquiror Indemnified Party, directly or indirectly,
by reason of, arising out of, or resulting from (a) the inaccuracy or breach of
any representation or warranty of the Company or Xxxxxxx contained in or made
pursuant to this Agreement or (b) the breach of any covenant or agreement of
the Company or Xxxxxxx contained in or made pursuant to this Agreement. It is
agreed among the parties hereto that the obligations of Xxxxxxx to the Acquiror
Indemnified Party pursuant to this Section 8.01 be satisfied only pursuant to
the Escrow Agreement and the procedures set forth in Sections 8.04 and 8.05
hereof. As used in this Article IX, the term "Claim" shall include (i) all
debts, liabilities and obligations, (ii) all losses, damages, costs and
expenses (including, without limitation, interest (including prejudgment
interest in any litigated matter), penalties, court costs and reasonable
attorneys' fees and expenses), and (iii) all demands, claims, actions, costs of
investigation, causes of action, proceedings, arbitrations, judgments,
settlements and assessments, whether or not ultimately determined to be valid.
8.02 NO EXHAUSTION OF REMEDIES. Xxxxxxx acknowledges that his
obligation is independent of the obligations of the Company pursuant to this
Agreement, and that he waives any right to require the Acquiror Indemnified
Parties to (i) proceed against the Company; or (ii) pursue any other remedy
whatsoever in the power of the Acquiror Indemnified Parties.
8.03 DEFENSE OF THIRD PARTY CLAIMS. The obligation of Xxxxxxx to
indemnify the Acquiror Indemnified Parties under this Article VIII with
respect to Claims relating to or arising from third parties (a "Third Party
Claim") shall be subject to the following terms and conditions:
(a) Notice and Defense. The Acquiror Indemnified Party
will give the other party or parties (whether one or more, the
"Indemnifying Party") prompt written notice of any such Third Party
Claim, and the Indemnifying Party may undertake the defense thereof by
representatives chosen by it upon written notice to the Acquiror
Indemnified Party provided within 20 days of receiving notice of such
Third Party Claim (or sooner if the nature of the Third Party Claim so
requires). Failure of the Acquiror Indemnified Party to give such
notice shall not affect the Indemnifying Party's duty or obligations
under this Article VIII, except to the extent the Indemnifying Party
is materially prejudiced thereby. The Acquiror Indemnified Party shall
make available to the Indemnifying Party or its representatives all
records and other materials required by the Indemnifying Party and in
the possession or under the control of the Acquiror Indemnified Party,
for the use of the Indemnifying Party and its representatives in
defending any such clam, and shall in other respects give reasonable
cooperation in such defense.
(b) Failure to Defend. If the Indemnifying Party, within
20 days after notice of any such Third Party Claim (or sooner if the
nature of any Third Party Claim so requires),
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fails to undertake the defense of such Third Party Claim actively and
in good faith, then the Acquiror Indemnified Party will have the right
to undertake the defense, compromise or settlement of such Third Party
Claim, or consent to the entry of a judgment with respect thereto.
(c) Acquiror Indemnified Party's Rights. Anything in
this Article VIII to the contrary notwithstanding, (i) if there is a
reasonable probability that the Third Party Claim may adversely affect
the Acquiror Indemnified Party other than as a result of money damages
or other money payments in an aggregate amount of less than $100,000,
the Acquiror Indemnified Party shall have the right to defend,
compromise or settle such Third Party Claim (provided that the
Acquiror Indemnified Party shall not settle such Third Party Claim or
consent to any judgment without first obtaining the consent of the
Indemnifying Party, which shall not be unreasonably withheld), and
(ii) the Indemnifying Party shall not without the written consent of
the Acquiror Indemnified Party, settle or compromise any Third Party
Claim or consent to the entry of any judgment that does not include as
an unconditional term thereof the giving by the claimant or the
plaintiff to the Acquiror Indemnified Party of an unconditional
release from all liability in respect of such Third Party Claim.
8.04 PAYMENT; ARBITRATION. Upon the occurrence of a Claim for
which indemnification is believed to be due hereunder, the Indemnified Party
shall provide notice of such Claim to the Indemnifying Party, stating in
specific terms the circumstances giving rise to the Claim, specifying the
amount of the Claim and making a request for any payment then believed due.
Any Claim shall be conclusive against the Indemnifying Party in all respects 30
days after receipt by the Indemnifying Party of such notice, unless within such
period the Indemnifying Party sends the Indemnified Party a notice disputing
the propriety of the Claim. Such notice of dispute shall describe the basis
for such objection and the amount of the Claim as to which the Indemnifying
Party does not believe should be subject to indemnification. Upon receipt of
any such notice of dispute, both the Indemnified Party and the Indemnifying
Party shall use all reasonable efforts to cooperate and arrive at a mutually
acceptable resolution of such dispute within the next 30 days. If a mutually
acceptable resolution cannot be reached between the Indemnified Party and the
Indemnifying Party with such 30-day period, either party may submit the dispute
for resolution by binding arbitration pursuant to the provisions of this
Section 8.04. If a party elects to submit such matter to arbitration, such
party shall provide notice to the other party of its election to do so, and the
parties shall attempt to appoint a single arbitrator. If the parties are
unable within 10 days of receipt of the notice to agree on a single arbitrator,
then each party shall appoint one arbitrator, and the two arbitrators so
appointed shall name a third arbitrator within a period of 10 days of their
nomination. If the two arbitrators fail to appoint a third arbitrator within
such 10-day period, a third arbitrator shall be appointed pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. In all
respects, such panel shall be governed by the American Arbitration
Association's then existing Commercial Arbitration Rules, and the place of
arbitration shall be in a city mutually selected by the Indemnifying Party and
the Indemnified Party (or, if no city can be mutually agreed upon within 10
days, then in Houston, Texas). If it is finally determined that all or a
portion of such Claim amount
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is owed to the Indemnified Party, then such Claim amount shall be satisfied in
accordance with Section 8.02 hereof. Judgment upon the award resulting from
arbitration may be entered in any court having jurisdiction for direct
enforcement, or any application may be made to a court for a judicial
acceptance of the award and an order of enforcement, as the case may be.
8.05 SATISFACTION OF CLAIMS FROM ESCROW SHARES. After the
Effective Time, the obligations and liabilities of Xxxxxxx pursuant to Section
8.01 of this Agreement shall be satisfied solely from payments of the Escrow
Shares by delivery to the Acquiror Indemnified Parties. Pursuant to the terms
of the Escrow Agreement, if Xxxxxxx is determined to owe a Claim amount
pursuant to the procedures set forth in Section 8.04, then the amount due the
Indemnified Party hereunder shall be satisfied by the delivery to the
Indemnified Party pursuant to the Escrow Agreement of Escrow Shares equal in
value to the amount of the Claim to be satisfied, and the Claim shall be deemed
paid and satisfied upon receipt by the Indemnified Party of certificates
representing such number of Escrow Shares duly endorsed for transfer to the
Indemnified Party. The per share value of the Escrow Shares for purposes of
this Article VIII and the Escrow Agreement with respect to a particular Claim
shall be the Market Value (as defined herein) of the Escrow Shares. The
"Market Value" of an Escrow Share shall be the price of the Acquiror Stock on
December 18, 1998 (regardless of the actual trading price for the Acquiror
Stock) with appropriate adjustment to take into account any stock split,
reverse stock split, stock dividend, recapitalization or other similar capital
adjustments with respect to the Escrow Shares. The Market Value of the
Additional Corpus (as such term is defined in the Escrow Agreement) shall be
determined by mutual agreement of Xxxxxxx and the Acquiror. In the event that
such parties cannot in good faith agree on the market value of the Additional
Corpus, the matter shall be settled by binding arbitration in accordance with
the procedures set forth herein.
8.06 LIABILITY LIMITATIONS; SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. All representations, warranties, covenants and agreements of the
Company and Xxxxxxx in this Agreement or made pursuant hereto shall survive the
Closing and any investigation thereof for one year after the Closing Date, and
Xxxxxxx shall have no liability under this Article VIII unless written notice
of a Claim is provided within such period. After the Effective Time, the
Acquiror Indemnified Parties shall not be entitled to indemnification for
Claims from the Escrow Shares except to the extent the aggregate amount for all
claims exceeds $25,000. After the Effective Time, all claims by the Acquiror
Indemnified Parties pursuant to this Agreement shall be limited to the Escrow
Shares.
ARTICLE IX
CONDITIONS
9.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIROR COMPANIES.
The obligation of the Acquiror Companies to effect the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions, any or all of which may be
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waived by Acquiror, in whole or in part, to the extent permitted by applicable
law:
(a) Each of the representations and warranties of the
Company and Xxxxxxx contained in this Agreement shall be true and
correct in all material respects (without duplication of any
materiality exception contained in any individual representation and
warranty) as of the date of this Agreement and as of the Effective
Time as though made again as of the Effective Time. Acquiror shall
have received a certificate of the President and the Chief Financial
Officer of the Company, dated the Closing Date, to such effect with
respect to the representations and warranties of the Company set forth
in Article II hereof;
(b) The Company and Xxxxxxx shall have performed or
complied with all agreements and covenants required by this Agreement
to be performed or complied with by such person on or prior to the
Effective Time. Acquiror shall have received a certificate of the
President and the Chief Financial Officer of the Company, dated the
Closing Date, to such effect with respect to the Company's performance
and compliance;
(c) The resignations, effective at the Effective Time, of
each of directors and officers of the Company shall have been
delivered to Acquiror;
(d) No court or Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any Laws (whether temporary,
preliminary or permanent) which is in effect and which has the effect
of making the Merger illegal or otherwise prohibiting consummation of
the Merger;
(e) The applicable waiting period under any competition
Laws, Regulations and Orders of foreign Governmental Entities, as set
forth in Acquiror's Disclosure Letter or the Company's Disclosure
Letter, shall have expired or been terminated;
(f) Acquiror shall have been advised in writing by Xxxxxx
Xxxxxxxx LLP as of the Closing Date to the effect that such firm knows
of no reason why the Merger cannot be treated for financial accounting
purposes as a Pooling Transaction;
(g) Messrs. ______, ______, ______, _____, and _____
shall have duly executed and delivered to Acquiror an employment
agreement substantially in the form of Exhibit B hereto and Xxxxxxx in
the form of Exhibit D hereto;
(h) Acquiror shall have received the Escrow Agreement,
duly executed and delivered by Xxxxxxx and the Escrow Agent.
9.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to effect the transactions contemplated hereby shall
be subject to the satisfaction at or prior to the Effective Time of the
following conditions, any or all of which may be waived by the Company, in
whole or in part, to the extent permitted by applicable law:
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(a) Each of the representations and warranties of
Acquiror contained in this Agreement shall be true and correct in all
material respects (without duplication of any materiality exception
contained in any individual representation and warranty) as of the
date of this Agreement and as of the Effective Time as though made
again as of the Effective Time. The Company shall have received a
certificate of the President and the Chief Financial Officer of
Acquiror, dated the Closing Date, to such effect;
(b) Acquiror shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time. The Company
shall have received a certificate of the President and the Chief
Financial Officer of Acquiror, dated the Closing Date, to such effect;
(c) No court or Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any Laws (whether temporary,
preliminary or permanent) which is in effect and which has the effect
of making the Merger illegal or otherwise prohibiting consummation of
the Merger;
(d) The applicable waiting period under any competition
Laws, Regulations and Orders of foreign Governmental Entities, as set
forth in Acquiror's Disclosure Letter or the Company's Disclosure
Letter, shall have expired or been terminated.
ARTICLE X
MISCELLANEOUS
10.01 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Effective Time:
(a) by mutual consent of Acquiror and the Company;
(b) by either Acquiror or the Company if the Effective
Time has not occurred on or before January 31, 1999;
(c) by Acquiror, upon a breach of any covenant or
agreement on the part of the Company or Xxxxxxx set forth in this
Agreement, or if any representation or warranty of the Company or
Xxxxxxx shall have become untrue, in either case such that the
conditions set forth in Section ______ or Section ______ would not be
satisfied (a "Terminating Company Breach"); provided that, if such
Terminating Company Breach is curable by the Company or Xxxxxxx, as
the case may be, through the exercise of reasonable efforts and for so
long as the Company or Xxxxxxx continue to exercise such reasonable
efforts, Acquiror may not terminate this Agreement under this Section
10.01(c);
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(d) by the Company, upon breach of any covenant or
agreement on the part of Acquiror set forth in this Agreement, or if
any representation or warranty of Acquiror shall have become untrue,
in either case such that the conditions set forth in Section ______ or
Section ______ would not be satisfied (a "Terminating Acquiror
Breach"); provided that, if such Terminating Acquiror Breach is
curable by Acquiror through the exercise of its reasonable efforts and
for so long as Acquiror continues to exercise such reasonable efforts,
the Company may not terminate this Agreement under this Section
10.02(d); or
(e) by either Acquiror or the Company, if there shall be
any Order which is final and nonappealable preventing the consummation
of the Merger, unless the party relying on such Order has not complied
with its obligations under Section 7.03(b).
10.02 EFFECT OF TERMINATION. In the event of any termination of
this Agreement pursuant to Section 10.01, Xxxxxxx, the Company, Acquiror and
Acquisition Sub shall have no obligation or liability to each other except that
(i) the provisions of Sections ______ and ______ shall survive any such
termination, and (ii) nothing herein and no termination pursuant hereto will
relieve any party from liability for any breach of this Agreement.
10.03 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits thereof. This
Agreement may not be amended or supplemented at any time, except by an
instrument in writing signed on behalf of each party hereto. The waiver by any
party hereto of any condition or of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other condition or
subsequent breach.
10.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
(including the Schedules and Exhibits hereto) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both oral and
written, among the parties or any of them, with respect to the subject matter
hereof, and neither this nor any document delivered in connection with this
Agreement confers upon any person not a party hereto any rights or remedies
hereunder except as provided in Article VIII hereof.
10.05 ASSIGNMENT. This Agreement shall inure to the benefit of and
will be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns. This Agreement shall not be
assignable by any party hereto without the consent of the other parties hereto,
except that the parties hereto agree that the right and obligations of the
Acquiror may be assigned to an affiliate of the Acquiror.
10.06 CERTAIN DEFINITIONS. For the purposes of this Agreement, the
term:
(a) "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
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(b) "business day" means any day other than a day on
which banks in the State of Texas are authorized or obligated to be
closed;
(c) "Closing" shall mean a meeting, which shall be held
in accordance with Section ______ of this Agreement, of persons
interested in the transactions contemplated by this Agreement at which
all documents deemed necessary by the parties to this Agreement to
evidence the fulfillment or waiver of all conditions precedent to the
consummation of the transactions contemplated by the Agreement are
executed and delivered;
(d) "Closing Date" shall mean the date of the Closing as
determined pursuant to Section 1.11 of this Agreement.
(e) "control" (including the terms "controlled,"
"controlled by" and "under common control with") means the possession,
directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management or policies of a
person, whether through the ownership of stock or as trustee or
executor, by contract or credit arrangement or otherwise;
(f) "person" means an individual, corporation,
partnership, limited liability company, association, trust,
unincorporated organization, other entity or group (as defined in
Section 13(d) of the Exchange Act);
(g) "Significant Subsidiary" means any subsidiary of
Acquiror that would constitute a Significant Subsidiary within the
meaning of Rule 1-02 of Regulation S-X of the SEC;
(h) "subsidiary" or "subsidiaries" of the Company,
Acquiror or any other person, means any corporation, partnership,
joint venture or other legal entity of which the Company, Acquiror or
any such other person, as the case may be (either alone or through or
together with any other subsidiary), owns, directly or indirectly, 50%
or more of the stock or other equity interests the holders of which
are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity;
(i) "Tax" or "Taxes" shall mean any and all taxes,
charges, fees, levies, assessments, duties or other amounts payable to
any federal, state, local or foreign taxing authority or agency,
including, without limitation, (i) income, franchise, profits, gross
receipts, minimum, alternative minimum, estimated, ad valorem, value
added, sales, use, service, real or personal property, capital stock,
license, payroll, withholding, disability, employment, social
security, workers compensation, unemployment compensation, utility,
severance, excise, stamp, windfall profits, transfer and gains taxes,
(ii) customs, duties, imposts, charges, levies or other similar
assessments of any kind, and (iii) interest, penalties and additions
to tax imposed with respect thereto; and
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(j) "Trading Day" shall mean each business day on which
the New York Stock Exchange is open for trading.
10.07 NOTICES. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and (i) delivered in person or by courier, (ii) sent by
telecopy or facsimile transmission, or (iii) mailed, certified first class
mail, postage prepaid, return receipt requested, to the parties hereto at the
following addresses:
If to the Company: The Xxxxxxx Group International, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a copy to: Xxxx &Lauterbach, P.C.
0000 Xxxxx Xxxx Xxx Xxxxxxx
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxx
If to Xxxxxxx: Xx. Xxxxxx X. Xxxxxxx
c/o The Xxxxxxx Group International, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
with a copy to: Xxxx & Xxxxxxxxxx, P.C.
0000 Xxxxx Xxxx Xxx Xxxxxxx
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxx
If to Acquiror: Core Laboratories N.V.
or Acquisition sub Xxxxxxxxxxx 000
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Telecopy: 011-31-20-627-9886
Attention: Xxxxxxx Xxxxxxxx
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with a copy to: Core Laboratories, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx
or to such other address as the parties hereto shall have furnished to the
other parties hereto by notice given in accordance with this Section 10.07.
Such notices shall be effective (i) if delivered in person or by courier, upon
actual receipt by the intended recipient, (ii) if sent by telecopy or facsimile
transmission, when the sender receives telecopier confirmation that such notice
was received at the telecopier number of the addressee, or (iii) if mailed,
upon the earlier of five days after deposit in the mail and the date of
delivery as shown by the return receipt therefor.
10.08 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive law of the State of Texas, without
giving effect to the principles of conflicts of law thereof. Venue for all
purposes shall lie in Xxxxxx County, Texas.
10.09 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
10.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, by original or facsimile signatures each of which shall be an
original, but all of which together shall constitute one and the same
agreement.
10.11 HEADINGS. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
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IN WITNESS WHEREOF, the Company and each of the Acquiror Companies
have each caused this Agreement to be executed on its behalf by its officer
thereunto duly authorized, and Xxxxxxx has executed this Agreement, all as of
the date first above written.
CORE LABORATORIES N.V.
By
-----------------------------------
Name:
Title:
AGI ACQUISITION COMPANY
By
-----------------------------------
Name:
Title:
THE XXXXXXX GROUP INTERNATIONAL, INC.
By
-----------------------------------
Name:
Title:
XXXXXX X. XXXXXXX:
By
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
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EXHIBIT A
ESCROW AGREEMENT
This Escrow Agreement ("Escrow Agreement"), dated as of December __,
1998, is entered into by and among Core Laboratories N.V., a Netherlands
limited liability company ("Buyer"), Xxxxxxx Acquisition, Inc., a Texas
corporation ("Buyer Sub I"), Xxxxxxx Acquisition B.V., a Netherlands limited
liability company ("Buyer Sub II") (Buyer Sub I and Buyer Sub II, hereinafter
referred to as "Buyer Subs"), Xxxxxx X. Xxxxxxx an individual resident in the
United States (the "Seller"), and Bankers Trust Company, as escrow agent
("Escrow Agent"). Defined terms used but not otherwise defined herein shall
have the meanings set forth in the Merger Agreements (as defined below).
RECITALS
WHEREAS, Buyer, Buyer Sub I, and Seller have entered into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger I Agreement"),
pursuant to which Buyer Sub I is acquiring all of the issued and outstanding
capital stock of The Xxxxxxx Group International, Inc., a Texas corporation
wholly owned by Seller ("Xxxxxxx Company"), in exchange for the issuance by
Buyer to Seller of the Buyer Shares; and
WHEREAS, Buyer, Buyer Sub II, and Seller have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger II
Agreement"), pursuant to which Buyer Sub II is acquiring all of the issued and
outstanding capital stock of A.G.I. Mexicana S.A. de C.V., a Mexican
corporation owned 99.0% by Seller ("Mexicana Company"), in exchange for the
issuance by Buyer to Seller of the Buyer Shares; and
WHEREAS, pursuant to the Merger I Agreement and the Merger II
Agreement (collectively, the "Merger Agreements"), Seller has made certain
representations, warranties, covenants and agreements to and with Buyer and
Buyer Subs, and Seller has agreed to indemnify, defend and hold harmless the
Buyer Indemnified Parties against Claims under Article IX of the Merger
Agreements; and
WHEREAS, the parties to the Merger Agreements have agreed to establish
an escrow fund (the "Escrow Fund"), initially consisting of _______ Buyer
Shares, from which they may, subject to the terms and conditions of the Merger
Agreements and this Escrow Agreement, satisfy Seller's obligations to indemnify
against Claims; and
WHEREAS, the Escrow Agent has agreed to act as the agent and custodian
for the Escrow Fund for the benefit of the parties to the Merger Agreements.
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NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements, provisions and covenants contained in this Escrow Agreement and the
Merger Agreements, the parties hereby agree as follows:
ARTICLE 1
ESTABLISHMENT OF ESCROW
(a) Buyer, Buyer Subs, and Seller each hereby appoint the Escrow
Agent to act as agent and custodian for the Escrow Fund for their respective
benefits pursuant to the terms of this Escrow Agreement, and the Escrow Agent
hereby accepts such appointment pursuant to such terms.
(b) Pursuant to the provisions of Section 2.3 of the Merger
Agreement, Buyer will cause to be delivered to, and directly deposited with,
the Escrow Agent for the account and future potential benefit of Seller a stock
certificate representing _______ Buyer Shares, which certificate shall be
registered as follows: "Bankers Trust Company f/b/o the Former Shareholder of
the Common Stock of The Xxxxxxx Group International, Inc. and A.G.I. Mexicana
S.A. de C.V.". Buyer will cause all such Buyer Shares hereby initially
delivered to, and initially deposited with, the Escrow Agent, together with all
subsequent stock dividends or distributions of other Buyer Shares received in
respect of such shares while deposited hereunder, shall be referred to herein
as the "Escrow Shares".
(c) The respective number of Escrow Shares to be initially
deposited with the Escrow Agent by Buyer for the account of the Seller is set
forth on Exhibit A hereto.
(d) The Seller shall deliver to the Escrow Agent simultaneously
herewith four stock powers duly executed and endorsed in blank in the form
attached as Exhibit B hereto with respect to each stock certificates
representing the Escrow Shares, and the Escrow Agent hereby acknowledges
receipt of the stock certificate representing the Escrow Shares and such
executed stock powers. The Seller agrees to execute in the future such
additional stock powers as may be required or requested by Buyer or the Escrow
Agent to transfer any Escrow Shares required in accordance with the provisions
of the Merger Agreements and this Escrow Agreement.
(e) The Escrow Shares shall be retained, managed and disbursed by
the Escrow Agent subject to the terms and conditions of this Escrow Agreement
and Article IX of the Merger Agreements. The Seller shall have the full and
unencumbered right to vote all Escrow Shares held for his account in the Escrow
Fund on matters submitted to a vote of Buyer's shareholders.
(f) All cash dividends and cash distributions on Escrow Shares,
when and if distributed by Buyer, and all additional Buyer Shares, property or
other securities, issued on or with respect to the Escrow Shares ("Additional
Corpus"), including as a result of stock splits, stock dividends or other
similar capital adjustments to, or recapitalizations on, or share exchanges
with (including by reason or merger, consolidation or other business
combination involving Buyer), the Buyer Shares,
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or other securities, shall be retained in the Escrow Fund for the account of
Seller subject to the terms hereof.
ARTICLE 2
CLAIMS AGAINST ESCROW SHARES
(a) If Buyer is entitled to indemnification from Seller against a
Claim pursuant to Section 9.1 (or any other section) of the Merger Agreements,
then such Claim shall be satisfied by the Escrow Agent's delivery to Buyer of
the requisite number of Escrow Shares (determined in accordance with Article IX
of the Merger Agreements). Any Claim by Buyer against Seller shall be deemed
to be paid and satisfied upon receipt by Buyer from the Escrow Agent of stock
certificates representing the requisite number of Escrow Shares (accompanied by
stock powers duly executed and endorsed in blank covering such shares in
accordance with Article 3 of this Escrow Agreement) and any Additional Corpus
allocable to such Escrow Shares. As used in this Escrow Agreement, the term
"Claim" shall have the same meaning as set forth in Section 9.1 of the Merger
Agreements as it shall apply to any claim for indemnification asserted by Buyer
against Seller pursuant to Section 9.1 (or any other section) of the Merger
Agreements. As used in this Escrow Agreement with respect to entitlement to
indemnification under the Merger Agreements, the term "Buyer" shall include all
parties included in the definition of "Buyer Indemnified Parties" as set forth
in Section 9.1 of the Merger Agreements.
(b) The delivery to Buyer of Escrow Shares and Additional Corpus,
if any, applicable to such Escrow Shares, in satisfaction of an indemnification
claim hereunder shall be taken from the account of the Seller in the Escrow
Fund.
ARTICLE 3
PROCEDURE FOR CHARGE TO ESCROW
(a) Any Claim under the indemnification provisions of the Merger
Agreements to be satisfied under this Escrow Agreement shall be made by Buyer
by notice to the Escrow Agent and Seller, stating in specific terms the
circumstances giving rise to the Claim, specifying the amount of the Claim and
making a request for any payment then believed due. A Claim shall be deemed to
be finally resolved and appropriate for payment by the Escrow Agent when the
conditions specified in clause (b) below have been met with respect thereto.
(b) For purposes of this Escrow Agreement, a "Final Instruction"
shall mean a written notice given to the Escrow Agent directing the
disbursement from the Escrow Fund of the amount of the Claim, and shall be
signed both by Buyer and Seller, except as otherwise provided in clause (ii) or
(iii) below. A Final Instruction shall be delivered to the Escrow Agent under
the following circumstances, and accompanied by the indicated documentation:
- 39 -
45
(i) If Seller disputes either the validity, amount or
calculation of the Claim, Seller shall give written notice of such
dispute to Buyer, with a copy to the Escrow Agent, within 30 days
after the delivery of notice of the Claim by Buyer. Such notice shall
set forth the reasons and basis for disputing such Claim and the
amount in dispute. In such circumstances, no Final Instruction may be
given to the Escrow Agent except as provided in clause (iii) below.
(ii) If Seller fails to respond to the Claim within 30
days after the delivery to Seller and the Escrow Agent of the notice
of the Claim, or if Seller notifies the Escrow Agent that there is no
dispute with respect to the Claim, Buyer shall have the right to
deliver to the Escrow Agent a Final Instruction, signed only by Buyer,
with respect to the Claim.
(iii) In the case of a dispute, the Escrow Agent shall not
disburse any of the Escrow Fund in connection with the disputed amount
of such Claim until such time as the Escrow Agent receives a Final
Instruction with respect to such disputed Claim as set forth below.
Upon receipt of such notice of dispute by Buyer, both Buyer and Seller
shall use all reasonable efforts to cooperate and arrive at a mutually
acceptable resolution of such dispute within the next 30 days. If
Seller and the Buyer reach an agreement with respect to such dispute,
Seller and Buyer shall give to the Escrow Agent a Final Instruction,
signed by both Seller and Buyer, with respect to the Claim. If a
mutually acceptable resolution cannot be reached between Buyer and
Seller within such 30-day period, either party may submit the dispute
for resolution by binding arbitration pursuant to the provisions of
this Article 3. If a party elects to submit such matter to
arbitration, such party shall provide notice to the other party of its
election to do so, and the parties shall attempt to appoint a single
arbitrator. If the parties are unable within 10 days after receipt of
the notice to agree on a single arbitrator, then each party shall
appoint one arbitrator, and the two arbitrators so appointed shall
name a third arbitrator within a period of 10 days of their
nomination. If the two arbitrators fail to appoint a third arbitrator
within such 10-day period, a third arbitrator shall be appointed
pursuant to the then existing Commercial Arbitration Rules (the
"Rules") of the American Arbitration Association ("AAA"). In all
respects, such panel and the arbitration proceeding shall be governed
by the Rules, and the place of arbitration shall be in a city mutually
selected by Buyer and Seller (or, if no city can be mutually agreed
upon within 10 days, then in Houston, Texas). If it is finally
determined that all or a portion of such Claim amount is owed to an
Buyer Indemnified Party, the Buyer Indemnified Party shall be entitled
to payment of such Claim upon presentation of a Final Instruction
signed by Buyer and accompanied by a copy of the arbitration order.
Judgment upon the award resulting from arbitration may be entered in
any court having jurisdiction for direct enforcement, or any
application may be made to a court for a judicial acceptance of the
award and an order of enforcement, as the case may be.
(c) Promptly after resolution of a Claim as provided in clause (b)
above, the Escrow
- 40 -
46
Agent shall satisfy such Claim by delivering to Buyer the amount of the Escrow
Fund calculated in accordance with Section 9.4 of the Merger Agreements or, if
the value of the Escrow Fund held hereunder is less than the amount of such
Claim, by delivering to Buyer all of the Escrow Fund then held hereunder. Any
Escrow Shares delivered to Buyer in satisfaction of a Claim hereunder shall be
accompanied by duly executed blank stock powers (in the form attached as Exhibit
B) therefor and any such Escrow Shares so delivered shall be free and clear of
any interest of Seller or Escrow Agent therein. If the amount of the Escrow
Shares to be delivered to Buyer is not available in that specified certificate
denomination then the Escrow Agent should request the necessary denomination
from the stock transfer agent at the following address: American Stock Transfer
& Trust Company, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxx.
ARTICLE 4
DISPOSITION OF ESCROW FUND
(a) The Escrow Fund held hereunder shall be released by the Escrow
Agent to Seller on the next business day following the first anniversary of the
Closing Date (the "Distribution Date"). Notwithstanding any other provision
hereof, if on the Distribution Date any unresolved Claim is then pending
hereunder, only the amount of the Escrow Fund having a value in excess of the
value required to satisfy such Claim (Escrow Shares being valued for such
purpose in accordance with Article IX of the Merger Agreements) as determined
in good faith by Buyer shall be released to Seller.
(b) At such later time as all Claims have been finally resolved
and the amount of all such Claims has been paid to Buyer, the balance of the
Escrow Fund then held hereunder, if any, shall be disbursed to Seller.
(c) The escrow established by this Escrow Agreement shall continue
in effect until release of the entire Escrow Fund pursuant to the provisions
hereof.
(d) No fractional Buyer Shares shall be delivered at any time by
the Escrow Agent.
ARTICLE 5
PROVISIONS RELATING TO THE ESCROW AGENT
(a) The Escrow Agent shall have no duties or responsibilities
whatsoever with respect to the Escrow Fund except as are specifically set forth
herein. The Escrow Agent shall neither be responsible for or under, nor
chargeable with knowledge of the terms and conditions of, any other agreement,
instrument or document in connection herewith. The Escrow Agent may
conclusively rely upon, and shall be fully protected from all liability, loss,
cost, damage or expense in acting or omitting to act pursuant to any written
notice, instrument, request, consent, certificate, document,
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47
letter, telegram, opinion, order, resolution or other writing hereunder without
being required to determine the authenticity of such document, the correctness
of any fact stated therein, the propriety of the service thereof or the
capacity, identity or authority of any party purporting to sign or deliver such
document. The Escrow Agent shall have no responsibility for the contents of
any such writing contemplated herein and may rely without any liability upon
the contents thereof.
(b) The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be authorized
hereby or with the rights or powers conferred upon it hereunder, nor for action
taken or omitted by it in good faith, and in accordance with advice of counsel
(which counsel may be of the Escrow Agent's own choosing), and shall not be
liable for any mistake of fact or error of judgment or for any acts or
omissions of any kind except for its own willful misconduct or gross
negligence.
(c) Each of the Buyer and Seller agree to jointly and severally
indemnify the Escrow Agent and its employees, directors, officers and agents
and hold each harmless against any and all liabilities incurred by it hereunder
as a consequence of such party's action, and the parties agree jointly and
severally to indemnify the Escrow Agent and hold it harmless against any
claims, costs, payments, and expenses (including the fees and expenses of
counsel) and all liabilities incurred by it in connection with the performance
of its duties hereunder and them hereunder, except in either case for claims,
costs, payments and expenses (including the fees and expenses of counsel) and
liabilities incurred by the Escrow Agent resulting from its own willful
misconduct or gross negligence.
(d) The Escrow Agent may resign as such following the giving of 60
days' prior written notice to Buyer and Seller. Similarly, the Escrow Agent
may be removed and replaced following the giving of 60 days' prior written
notice to the Escrow Agent jointly by Buyer and Seller. In either event, the
duties of the Escrow Agent shall terminate 60 days after the date of such
notice (or at such earlier date as may be mutually agreeable), except for its
obligations to hold and deliver the Escrow Fund to the successor Escrow Agent;
and the Escrow Agent shall then deliver the balance of the Escrow Fund then in
its possession to such a successor Escrow Agent as shall be appointed by Buyer
and the Seller as evidenced by a written notice filed with the Escrow Agent.
If Buyer and Seller are unable to agree upon a successor Escrow Agent by the
effective date of such resignation or removal, the then acting Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
Escrow Agent or other appropriate relief; and any such resulting appointment
shall be binding upon all of the parties hereto. Upon acknowledgment by any
successor Escrow Agent of the receipt of the then remaining balance of the
Escrow Fund, the then acting Escrow Agent shall be fully released and relieved
of all duties, responsibilities and obligations under this Escrow Agreement.
(e) The Escrow Agent shall not be bound in any way by any
agreement, other than this Escrow Agreement. A copy of the Merger Agreements,
together with the Schedules and Exhibits
- 42 -
48
thereto, has been provided to the Escrow Agent in connection with the execution
of this Escrow Agreement and the Escrow Agent understands that the terms of
Seller's indemnification obligations are set forth in Article IX of the Merger
Agreements. The Merger Agreements form an integral part of this Escrow
Agreement and, therefore, Article IX thereof is hereby incorporated by
reference herein.
(f) The Escrow Agent shall be under no duty to institute or defend
any arbitration or legal proceeding with respect to the Escrow Fund or under
this Escrow Agreement and none of the costs or expenses or any such proceeding
shall be borne by the Escrow Agent. The costs and expenses of any such
proceeding shall be borne as decided by the arbitrators or court and shall be
direct obligations of Buyer or Seller, as the case may be, and shall not be
satisfied in any way by the Escrow Fund.
ARTICLE 6
SECURITY INTEREST
The Seller hereby grants to Buyer a first priority security interest
in his respective right, title to and interest in the Escrow Fund held under
this Escrow Agreement, for the purpose of securing, or partially securing, his
indemnification obligations to Buyer pursuant to Article IX of the Merger
Agreements. The Seller agrees to execute and deliver any such further
instruments as Buyer or Escrow Agent may request from time to time evidencing
such security interest.
ARTICLE 7
NOTICES
All notices, requests, demands, claims and other communications which
are required to be or may be given under this Escrow Agreement shall be in
writing and shall be deemed to have been duly given if (i) delivered in person
or by courier, (ii) sent by telecopy or facsimile transmission, answer back
requested, or (iii) mailed, by registered or certified mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
(a) If to Buyer: Core Laboratories N.V.
Xxxxxxxxxxx 000
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Telecopy: 011-31-20-627-9886
Attention: Xxxxxxx Xxxxxxxx
and
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49
Core Laboratories, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx
(b) If to Seller: Xxxxxx X. Xxxxxxx
c/o The Xxxxxxx Group International, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: H. Xxxx Xxxx, Xx.
with a copy
(which shall not
constitute notice) to: Xxxx &Lauterbach, P.C.
0000 Xxxxx Xxxx Xxx Xxxxxxx
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Mr. Xxxxxxx Xxxx
(c) If to the Escrow Agent:
Bankers Trust Company
0 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention:
-------------------------------
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Article 7. Such notices shall be
effective, (i) if delivered in person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when
the answer back is received, or (iii) if mailed, upon the earlier of five
business days after deposit in the mail and the date of delivery as shown by
the return receipt therefor.
ARTICLE 8
BINDING EFFECT; OTHER INTERESTS
This Escrow Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
successors and assigns. Nothing herein is
- 44 -
50
intended or shall be construed to give any other person (including, without
limitation, any creditors of Escrow Agent, Buyer or Seller) any right, remedy
or claim under, in or with respect to this Escrow Agreement or the Escrow Fund
held hereunder. The Escrow Agent shall not have a lien or adverse claim upon,
or any other right whatsoever to payment from, the Escrow Fund (or dividends or
distributions paid thereon) for or on account of any right to payment or
reimbursement hereunder or otherwise.
ARTICLE 9
GOVERNING LAW
This Escrow Agreement shall be construed and enforced in accordance
with the laws of the State of Texas, excluding any choice of law rules that may
direct the application of the laws of another jurisdiction.
ARTICLE 10
COMPENSATION; EXPENSES
The Escrow Agent shall be entitled to payment from Buyer for customary
fees and expenses for all services rendered by it hereunder in accordance with
Exhibit C attached hereto (as such schedule may be amended from time to time),
payable on the closing date. The Escrow Agent shall also be entitled to
reimbursement on demand for all loss, liability, damage or expenses paid or
incurred by it in the administration of its duties hereunder, including, but
not limited to, all counsel, advisors' and agents' fees and disbursements and
all taxes or other governmental charges.
ARTICLE 11
TERM
This Escrow Agreement shall terminate on the later of (i) the
Distribution Date or (ii) the date on which all Claims, if any, asserted by
Buyer pursuant to the terms of this Escrow Agreement and the Merger Agreements
shall have been conclusively resolved and paid pursuant to this Escrow
Agreement and the Merger Agreements. The rights of the Escrow Agent and the
obligations of the other parties hereto under Articles 5 and 10 hereof shall
survive the termination thereof and the resignation or removal of the Escrow
Agent.
ARTICLE 12
AMENDMENT AND MODIFICATION
Buyer, Seller, and the Escrow Agent may amend, modify and/or
supplement this Escrow Agreement as they may mutually agree in writing.
ARTICLE 13
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51
COUNTERPARTS
This Escrow Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.
ARTICLE 14
HEADINGS
The headings used in this Escrow Agreement are for convenience only
and shall not affect the construction hereof.
ARTICLE 15
ASSIGNABILITY
Neither this Escrow Agreement nor any interest herein or in the Escrow
Fund may be assigned or transferred, voluntarily or by operation of law, by
Buyer, Seller or the Escrow Agent, except pursuant to the laws of descent and
distribution; provided, however, that Buyer may assign this Escrow Agreement
and any or all interest herein to any "affiliate" of Buyer upon notice to all
parties and, thereupon such assignee shall fully assume and succeed to all of
the assignors' rights, benefits, obligations, duties and responsibilities
hereunder.
ARTICLE 16
TAX WITHHOLDING
Notwithstanding anything to the contrary set forth herein, the Escrow
Agent is authorized to withhold from any proposed distribution to Seller from
the Escrow Fund such amount as is necessary for the purpose of complying with
the Escrow Agent's obligations under federal, state or local tax provisions;
provided, however, that such withholding shall not reduce the amount of the
Escrow Fund which may otherwise required to be delivered to Buyer under Article
3 hereof. In the event that there are insufficient funds remaining to pay any
withholding obligations after distribution of the Escrow Funds to Buyer, such
liability shall be the responsibility of the Seller.
ARTICLE 17
SEVERABILITY
If any term, provision, covenant or restriction of this Escrow
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Escrow Agreement shall continue in full force and effect
and shall in no way be affected, impaired or invalidated unless such an
interpretation would materially alter the rights and privileges of any party
hereto or materially alter the terms of the transactions contemplated hereby.
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52
ARTICLE 18
DESIGNEES FOR INSTRUCTIONS
Buyer may, by notice to the Escrow Agent, designate one or more
persons who will execute notices and from whom the Escrow Agent may take
instructions hereunder. Such designations may be changed from time to time
upon notice to the Escrow Agent from Buyer. The Escrow Agent will be entitled
to rely conclusively on any notices or instructions from any person so
designated by Buyer.
ARTICLE 19
MEDIATION AND ARBITRATION
(a) Except as provided in Article 3 of this Escrow Agreement for
disputes relating to claims against the Escrow Fund:
(i) Before the institution of any litigation between any
persons relating to this Escrow Agreement, including any dispute over
the application or interpretation of any provision hereof, if
negotiations and other discussions fail, at the election of any party
to this Escrow Agreement, such dispute shall be first submitted to
mediation in accordance with the provisions of the Commercial
Mediation Rules of the AAA before resorting to arbitration. The
parties agree to conduct the mediation in good faith and make
reasonable efforts to resolve their dispute by mediation. The place
of the mediation shall be in a city mutually selected by the parties
(or, if no city can be mutually agreed upon within ten (10) days, then
in Houston, Texas).
(ii) If the dispute is not resolved by the mediation
required under the preceding subsection, such dispute shall, at the
election of any party to this Escrow Agreement, be subject to binding
arbitration in accordance with the provisions of the Rules, and
judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. The arbitration shall be heard
before a panel of three (3) arbitrators selected in accordance with
the procedures therefor set forth in Article 3 of this Escrow
Agreement. The parties agree to use the Houston, Texas office of the
AAA and the place of arbitration shall be in a city mutually selected
by the parties (or, if no city can be mutually agreed upon within ten
(10) days, then in Houston, Texas).
(iii) The prevailing party in any mediation, arbitration or
litigation shall be entitled to recover from the other party
reasonable attorneys' fees, court costs and the administrative costs,
fees and expenses of the AAA, each as applicable, incurred in the
same, in addition to any other relief that may be awarded.
(b) If either party appeals the decision of the arbitrators, the
parties agree that the United
- 47 -
53
States Judicial District including Xxxxxx County, Texas, and the state courts
within Xxxxxx County, Texas, shall have exclusive venue and jurisdiction of
same.
[signatures on following page]
- 48 -
54
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Escrow Agreement as of the day and year first above written.
Buyer: Seller:
Core Laboratories N.V.
By: Core Laboratories International B.V.,
its sole Managing Director
-----------------------------
Xxxxxx X. Xxxxxxx
By:
Name: Xxxxxxx Xxxxxxxx
--------------------------
Title: Managing Director Escrow Agent:
-------------------------
Buyer Sub I:
Bankers Trust Company
Xxxxxxx Acquisition, Inc.
By:
--------------------------
Name:
------------------------
By: Title:
----------------------------- -----------------------
Name: Xxxxxxx Xxxxxxxx
--------------------------
Title: Managing Director
-------------------------
Buyer Sub II:
Xxxxxxx Acquisition B.V.
By:
----------------------------
Name: Xxxxxxx Xxxxxxxx
--------------------------
Title: Managing Director
------------------------
- 49 -
55
Exhibit "A"
Escrow Shares
Name of Seller Escrow Shares
-------------- -------------
Xxxxxx X. Xxxxxxx XXX
56
Exhibit "B"
CORE LABORATORIES N.V.
COMMON STOCK
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________
__________________________________________________________________, ___________
________________________ (______) shares of the Common Stock of Core
Laboratories N.V., standing in my name on the books of said Corporation
represented by Certificate(s) No(s). _________ herewith, and do hereby
irrevocably constitute and appoint Bankers Trust Company attorney to transfer
the said stock on the books of said Corporation with full power of substitution
in the premises.
Dated:
----------------------
By:
-----------------------------
-----------------------------
57
Exhibit "C"
Bankers Trust Company
Corporate Trust and Agency Services
Schedule of Fees for
Core Laboratories N.V./The Xxxxxxx Group International, Inc./A.G.I. Mexicana
S.A. de C.V. Escrow
Annual Administration Fee: [$xxx]
(payable at closing and each subsequent anniversary)
These fees cover the review and execution of the Escrow Agreement,
establishment of the appropriate custody account, the receipt and distribution
of the Escrow Shares, and all normal administrative time spent coordinating
with other members of the working group.
Note: The fees set forth in this schedule are subject to review of
documentation. The fees are also subject to change should circumstances
warrant. Out-of-pocket expenses and disbursements, including counsel fees,
incurred in the performance of our duties will be added to the billed fees.
Fees for any services not covered in this or related schedules will be based
upon our appraisal of the services rendered.
We may place orders to buy/sell financial instruments with outside
broker-dealers that we select, as well as with BT or its affiliates. These
transactions (for which normal and customary spreads or other compensation may
be earned by such broker-dealers, including BT or its affiliates, in addition
to the charges quoted above) will be executed on a riskless principal basis
solely for your account(s) and without recourse to us or our affiliates. If
you choose to invest in any mutual fund, BT and/or our affiliates may earn
investment management fees and other service fees/expenses associated with
these funds as disclosed in the mutual fund prospectus provided to you, in
addition to the charges quoted above. Likewise, BT has entered into agreements
with certain mutual funds or their agents to provide shareholder services to
those funds. For providing these shareholder services, BT is paid a fee by
these mutual funds that calculated on an annual basis does not exceed 25 basis
points of the amount of your investment in these mutual funds. In addition, if
you choose to use other services provided by BT or its affiliates, Corporate
Trust or other BT affiliates may be allocated a portion of the fees earned. We
will provide periodic account statements describing transactions executed for
your account(s). Trade confirms will be available upon your request at no
additional charge. If a transaction should fail to close for reasons beyond
our control, we reserve the right to charge our acceptance fee plus
reimbursement for legal fees incurred.
Shares of mutual funds are not deposits or obligations of, or guaranteed by,
Bankers Trust Company or any of its affiliates and are not insured by the
Federal Deposit Insurance Corporation or any other
58
agency of the U.S.
59
CORE LABORATORIES N.V.
COMMON STOCK
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________________________________________________
_____________________________________, ________________________________________
________________________________________________ (______) shares of the Common
Stock of Core Laboratories N.V., standing in my name on the books of said
Corporation represented by Certificate(s) No(s). _________ herewith, and do
hereby irrevocably constitute and appoint Bankers Trust Company attorney to
transfer the said stock on the books of said Corporation with full power of
substitution in the premises.
Dated:
---------------------
By:
--------------------------------
--------------------------------
60
EXHIBIT B
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
as of December __, 1998 by and between Core Laboratories, Inc., a corporation
organized under the laws of the State of Delaware ("Employer"), and Xxxxxx X.
Xxxxxxx, a resident of the State of Texas ("Employee").
WHEREAS, Employee is employed as the President of The Xxxxxxx Group
International, Inc. ("Previous Employer");
WHEREAS, Core Laboratories N.V. ("Core"), Employee and The Xxxxxxx
Group International, Inc. are parties to an Agreement and Plan of Merger dated
as of the date hereof whereby Core will acquire all of the capital stock of The
Xxxxxxx Group International, Inc. and The Xxxxxxx Group International, Inc.
will become a wholly owned indirect subsidiary of Core (the "Acquisition");
WHEREAS, one of the conditions to consummation of the Acquisition is
that Employer and Employee enter into this Agreement;
WHEREAS, Employer is desirous of employing Employee, and Employee
wishes to be employed by Employer, in accordance with the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT
1.01 Employer hereby employs Employee, effective as of the Closing
Date (as defined in the Agreement and Plan of Merger) (the "Effective Date"),
and Employee accepts such employment as of the Effective Date, according to the
terms and conditions set forth in this Agreement.
ARTICLE II
TERM OF EMPLOYMENT
2.01 TERM. The term of this Agreement shall commence on the
Effective Date and, except as provided in Section 7.03, shall continue until
the earliest to occur of the following events:
61
(a) Employee resigns, (b) Employee's service is terminated pursuant to the
provisions of Sections 2.02, 2.03, 2.04 or 2.05 or (c) the parties hereto agree
in writing to terminate this Agreement.
2.02 DISABILITY. If Employee is determined by Employer in its
discretion to be permanently disabled, the employment of Employee hereunder may
be terminated by Employer by giving at least thirty (30) days prior notice to
Employee. As used in this Section 2.02, the term "permanently disabled" shall
mean that Employer has determined that Employee is substantially unable to
discharge satisfactorily his duties and obligations hereunder on a full-time
active basis by reason of illness, accident or other disability for a period of
three (3) consecutive months. Except as otherwise provided in Section 5.03,
Employee shall be entitled only to, and Employer's obligations under this
Agreement shall be limited to, the payment of any unpaid amount of Employee's
base salary accrued under Section 4.01 to the date of such termination and any
accrued and unused vacation days.
2.03 DEATH. This Agreement shall terminate immediately on the date
of Employee's death. Employee's estate shall be entitled only to, and
Employer's obligation under this Agreement shall be limited to, the payment of
any unpaid amount of Employee's base salary accrued under Section 4.01 to the
date of Employee's death and any accrued and unused vacation days.
2.04 TERMINATION FOR CAUSE. The employment of Employee hereunder
may be terminated "for cause" immediately without prior notice by Employer if
Employer in its discretion determines that Employee shall have:
(A) deliberately refused or failed, after reasonable notice in
writing from the Board of Supervisory Directors of Core (the
"Board") or a representative of Employer duly authorized by
the Board (the "Supervising Representative") that such refusal
or failure would constitute a default hereunder, to carry out
any reasonable order of the Board or the Supervising
Representative;
(B) committed a breach of the terms of this Agreement or any other
legal obligation owed by Employee to Employer;
(C) demonstrated gross incompetence, negligence or willful
misconduct in the execution of Employee's assigned duties;
(D) demonstrated moral turpitude to the detriment of Employer or
violated Employer's policy on the use of alcohol or drugs as
in effect from time to time; or
(E) been convicted of a felony or other serious crime.
In such cases, Employee shall be entitled only to, and Employer's
obligation under this Agreement shall be limited to, the payment of any unpaid
amount of Employee's base salary accrued under Section 4.01 to the date of such
termination and any accrued and unused vacation days. This
62
Section 2.04 shall in no way be construed as precluding Employer from
terminating Employee without cause or prior notice or for any reason, as
provided in Section 2.05.
2.05 AT-WILL EMPLOYEE; OTHER TERMINATION. Employee understands and
agrees that he is an at-will employee and may be terminated from employment
with Employer for any reason, without cause, at any time; provided, however,
that for any termination made pursuant to this Section 2.05, Employer shall
provide Employee with 30 days prior notice of such termination. Furthermore,
Employer agrees that Employee may terminate his employment with Employer at any
time and for any reason by giving prior written notice to Employer. In such
cases, Employee shall be entitled only to, and Employer's obligation under this
Agreement shall be limited to, the payment of any unpaid amount of Employee's
base salary accrued under Section 4.01 to the date of such termination and any
accrued and unused vacation days.
ARTICLE III
DUTIES AND FUNCTIONS
3.01 POSITION; DUTIES. Employee agrees to serve as President of
The Xxxxxxx Group International, Inc. a subsidiary of the Employer, to perform
the duties of such office diligently and to the best of his abilities and to
assume such additional duties as may from time to time be assigned to him
consistent with his position.
3.02 PERFORMANCE; SERVICE. Employee agrees in all respects to
carry out and use his best efforts in carrying out the objectives of Employer
and protecting Employer's interests. Employee agrees to be in the full-time
service of Employer and to devote all of his business time and attention to the
duties assigned to him pursuant to this Agreement.
3.03 WORK FOR SUBSIDIARIES OR OTHER AFFILIATES. All terms and
conditions set forth in this Agreement between Employer and Employee shall
apply whether Employee carries out his activities in or for Employer or in or
for any subsidiary or other affiliate thereof. Employee shall receive no
salary or other payment for any position he holds with Employer or any
subsidiary or other affiliate thereof other than as set forth in this
Agreement.
ARTICLE IV
COMPENSATION
During the term of employment described in Section 2.01 above while
this Agreement is in effect, Employer shall provide to Employee the following:
4.01 BASE SALARY. Employer shall pay to Employee an annual gross
base salary in the amount of ___________ and No/100 U.S. dollars (U.S. $XXX),
payable in arrears pursuant to the Employers typical pay schedule. Annual
adjustments may be made from time to time to such base salary on the basis of
merit as determined by the Board or the Supervising Representative.
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4.02 BONUS. Employee shall be eligible to receive an annual
incentive bonus on or about March 31 of each calendar year in accordance with
and subject to the performance criteria approved by the Board or the
Supervising Representative and commensurate with those applicable to senior
management of Employer. The amount of any such incentive bonus shall be
limited to 50% of Employee's then base salary specified in Section 4.01.
4.03 TAX. All amounts payable by Employer under this Agreement
shall be subject to the prior reduction or withholding by Employer of
appropriate taxes and other required amounts. If a determination is made by
any relevant governmental authority that insufficient withholdings have been
made and to the extent that such withholdings would, if made, have resulted in
the Employee receiving a lower amount of net remuneration, Employee shall
indemnify Employer for all amounts determined to be so payable as a result of
such failure to withhold any or sufficient amounts.
ARTICLE V
EMPLOYEE BENEFITS
5.01 AUTOMOBILE. During the Employee's term of employment
hereunder, Employer shall provide a monthly automobile allowance of $550.00.
5.03 EMPLOYEE BENEFITS. Employee shall be entitled to participate
in all health, disability, pension and other employee benefit plans offered by
Employer under the terms and conditions of each such plan.
ARTICLE VI
ADDITIONAL RIGHTS OF EMPLOYEE
6.01 VACATION. In addition to U.S. public holidays, Employee shall
be entitled to a paid annual vacation of twenty (20) business days during each
full calendar year of employment during such times as shall not interfere with
the operations of Employer. Employee's rights shall accrue ratably during each
calendar year and shall be subject to proration for partial calendar years. In
the event that in any calendar year Employee shall fail to use all vacation
days to which he is entitled during such year, Employee shall be entitled to
carry forward five (5) of such vacation days into the next succeeding calendar
year.
6.02 EXPENSES. Employer shall reimburse, or direct payment of, all
expenses reasonably incurred by Employee in the performance of his duties
hereunder, upon the submission of written evidence of such expenses to the
reasonable satisfaction of Employer, in accordance with Employer's written
expense reimbursement policies.
6.03 TERMINATION PAYMENT.
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(A) Subject to Paragraph (B) below, in the event that Employee's
employment pursuant to this Agreement is terminated by
Employer other than "for cause," as described in Section 2.04,
for permanent disability as described in Section 2.02 or for
death, Employer shall pay to Employee an amount equal to the
base salary specified in Section 4.01 as adjusted for the year
in which such termination occurs. Employee agrees that this
termination payment will be in lieu of, and not in addition
to, any payment to which he would otherwise be entitled on
account of termination of his employment under any other
Employer severance, termination, pay in lieu of notice, or
similar payment program, plan, policy or agreement.
(B) The payment referred to in Section 6.03(A) shall be reduced by
any statutory or other compensation that Employee may be
entitled to receive from Employer as a result of such
termination, and Employee, to the extent permitted by
applicable law, hereby waives any and all rights and remedies
with respect to such termination other than as expressly
provided herein.
6.04 LOCATION. Employee's services shall be performed primarily at
one of the facilities of Employer located in Houston, Texas. Employee
acknowledges that worldwide travel shall be required. In the event that the
Board or the Supervising Representative determines in its sole discretion that
the duties of Employee hereunder require that Employee relocate to a country or
state other than as set forth above, the parties agree to enter into good faith
negotiations regarding the terms of such relocation. In the event that, after
forty five (45) days after such negotiations have commenced, the parties have
failed to reach an agreement, Employer shall have the option of suspending its
relocation plans or exercising its rights under Section 2.05 above.
ARTICLE VII
CONFIDENTIAL INFORMATION AND COVENANT NOT TO COMPETE
7.01 GENERAL. Employee hereby covenants and agrees with Employer
that, except as otherwise expressly consented to, approved or otherwise
permitted by the Board or the Supervising Representative in writing, during
Employee's term of employment hereunder and for a subsequent period as set
forth below, Employee shall not, in any geographic area or market area or
market where Employer or any of its affiliates conduct any business either on
the date of termination of the employment of Employee or during any of the
immediately preceding twelve (12) months, directly or indirectly, acting alone,
by providing material assistance to the efforts of his spouse or as a member of
a partnership or other business entity or as a holder of any interest in a
security of any class of a corporation or other business entity (other than as
a holder of less than one percent (1%) of the outstanding amount of any
security listed on a national securities exchange or designated as a National
Market System security by the National Association of Securities Dealers, Inc.)
or as an officer, director, partner, employee, consultant, agent or
representative of any corporation, partnership or other business entity:
[INSERT CONCEPT OF UP-FRONT PAYMENT AS CONSIDERATION FOR
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THESE COVENANTS.]
(A) Other than as required in the performance of his assigned
duties to Employer and other than as required by law, either
use or disclose to any person, firm or corporation any
confidential or proprietary information concerning the
organization, business, inventions, discoveries, customers,
suppliers, operations, affairs or trade secrets of Core,
Employer, Employer's affiliates or Previous Employer that
Employee may have acquired in the course of, or incident to,
his employment by Employer, Employer's affiliates or Previous
Employer, whether or not Employee was aware that such
information was confidential or proprietary when originally
given to or learned by him; provided, however, that such
obligations of non-use and nondisclosure shall not apply to
information that is or becomes a part of the public domain
without breach by Employee of the aforementioned obligations;
(B) Engage anywhere in any business, trade, or other enterprise
substantially similar to, or directly or indirectly in
competition with, the business of Core, Employer, Employer's
affiliates or Previous Employer if engaging in such business,
trade or other enterprise could result in any unauthorized use
or disclosure by Employee of any confidential or proprietary
information of or concerning Core, Employer, Employer's
affiliates or Previous Employer. Employer and Employee agree
that Employer currently carries on substantial business
worldwide. Employer and Employee further agree that
Employee's engaging in the business of reservoir description,
production enhancement, reservoir management, reservoir
monitoring, seismic processing, and seismic interpretation
would necessarily involve the unauthorized use or disclosure
by Employee of such confidential or proprietary information;
(C) Request, induce or attempt to influence any current, future or
prospective customer or supplier of Core, Employer, Employer's
affiliates or Previous Employer to limit, curtail or cancel
its business with Employer; or
(D) Request, induce or attempt to influence any current, future or
prospective officer, director, employee, consultant, agent or
representative of Employer to (i) terminate his, her or its
employment or business relationship with Employer or (ii)
commit any act that, if committed by Employee, would
constitute a breach of any provision of this Section 7.01.
7.02 INTENT; SCOPE. Employee and Employer agree that the
provisions of clauses (A), (B), (C) and (D) of Section 7.01 are reasonable and
necessary to protect the legitimate interests of Employer. The provisions of
said clauses are separate and distinct commitments independent of each of the
other said clauses. Employee and Employer further agree that if the scope of
any said clauses is deemed by any administrative agency, arbitrator or court to
be overly broad, such agency, arbitrator or court may reduce the scope thereof
to that which it deems reasonable under the
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circumstances.
7.03 TERM. If Employee is terminated for any reason or voluntarily
leaves the employ of Employer, the provisions set forth in this Article VII
shall survive for a period of twelve (12) months following the date of such
termination or cessation of employment.
ARTICLE XIII
EMPLOYEE REPRESENTATIONS
8.01 Employee represents that he is free to enter into this
Agreement and is not under any contractual or other restraint which would
prohibit the satisfactory performance of his duties to Employer hereunder.
Employee represents and warrants further that he has read and understands each
of the provisions of this Agreement and that he has sought and obtained the
advice of legal counsel before agreeing to be bound by the terms hereof.
Employee acknowledges and agrees that Employer would not have continued
Employee's employment and entered into this Agreement but for Employee's
agreement to be bound by the covenants contained herein.
ARTICLE IX
MISCELLANEOUS
9.01 ENTIRE AGREEMENT. This Agreement, including the annexes
attached hereto, contains the entire understanding of the parties hereto in
respect of its subject matter. This Agreement supersedes all prior written or
oral agreements and understandings between the parties with respect to the
subject matter hereof.
9.02 ARBITRATION. Any controversy or claim which Employee may have
against Employer or any of its employees, officers, directors or agents,
specifically including (but not limited to) any claims arising out of or
relating to this Agreement or breach thereof, whether arising during or after
the effective period of this Agreement, shall be settled by final and binding
arbitration in accordance with the Model Employment Arbitration Procedures of
the American Arbitration Association, and judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. Except
as otherwise expressly provided herein, in reaching his or her decision, the
arbitrator shall have no authority or jurisdiction to change or modify any
provision of this Agreement or to award punitive damages, nor shall such
provisions be modified or punitive damages awarded in any other forum.
9.03 NOTICES. Any notice or other communications required or
permitted hereunder shall be sufficiently given if in writing and personally
delivered or sent by airmail, postage prepaid, or by international air courier,
telecopier or telex addressed to Employer or Employee, as the case may be, to
the following address or at such other address for such party as specified by
like notice:
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(A) If to Employer:
to: Core Laboratories, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
(B) If to Employee:
to: Xxxxxx X. Xxxxxxx
Core Laboratories, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
9.04 CHANGE, MODIFICATION, WAIVER. No change or modification of
this Agreement shall be valid unless it is in writing and signed by each of the
parties hereto. No waiver of any provision of this Agreement shall be valid
unless it is in writing and signed by the party against whom the waiver is
sought to be enforced. The failure of a party to insist upon strict
performance of any provision of this Agreement in any one or more instances
shall not be construed as a waiver or relinquishment of the right to insist
upon strict compliance with such provision in the future. No waiver by any
party of the breach of any term or provision contained in this Agreement,
whether by conduct or otherwise, shall be deemed to be or construed as a
further or continuing waiver of any such breach.
9.05 ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs and
assigns; provided, however, that Employee shall not directly or indirectly
assign or delegate any of his rights or obligations hereunder in whole or in
part without the prior written consent of Employer, and any such assignment or
delegation without such consent shall be void.
9.06 HEADINGS DESCRIPTIVE. The headings used herein are included
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.07 SAVINGS CLAUSE. Should any valid federal or state law or
final determination of any administrative agency, arbitrator or court of
competent jurisdiction affect any provision of this Agreement, the provision or
provisions so affected shall be automatically conformed to the law of
determination and this Agreement shall otherwise continue in full force and
effect.
9.08 CHOICE OF LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
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IN WITNESS WHEREOF, Employer and Employee have each executed or caused
this Agreement to be executed on its behalf by its officer thereunto duly
authorized, as applicable, all as of the date first above written.
CORE LABORATORIES, INC.
By:
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Name:
Title:
XXXXXX X. XXXXXXX
By:
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