EXHIBIT 10.12
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GROUP MAINTENANCE AMERICA CORP.
CRP ACQUISITION CORP.
XXXXXXXX XXXXX PRODUCTS & PUBLICATIONS, INC.
AND
THE HOLDERS OF THE
OUTSTANDING CAPITAL STOCK
OF
XXXXXXXX XXXXX PRODUCTS & PUBLICATIONS, INC.
JULY 16, 1997
TABLE OF CONTENTS
Page
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1. THE MERGER.................................................................... 1
1.1 The Merger............................................................... 1
1.2 Effective Time of the Merger............................................. 1
1.3 Closing.................................................................. 1
1.4 Effects of the Merger.................................................... 2
1.4.1 At the Effective Time............................................. 2
1.4.2 Effects on the Surviving Corporation.............................. 2
1.5 Written Consents and Other Actions....................................... 2
1.5.1 Unanimous Written Consent of the Shareholders; Other Matters...... 2
1.5.2 Written Consent of the Sole Shareholder of Merger Sub............. 2
1.5.3 All Other Necessary Actions....................................... 3
1.6 Conversion of Stock...................................................... 3
1.6.1 Merger Sub Capital Stock.......................................... 3
1.6.2 Cancellation of the Company Treasury Stock........................ 3
1.6.3 Merger Consideration.............................................. 3
1.7 Exchange of and Payment for Stock........................................ 4
1.7.1 Delivery of Company Common Stock and Closing Merger Consideration. 4
1.7.2 Assignments....................................................... 4
1.7.3 Payment In Full Satisfaction of All Rights........................ 4
1.8 Post-Closing Determination of Final Merger Consideration................. 4
1.8.1 Statement......................................................... 4
1.8.2 Review............................................................ 4
1.8.3 Disputes.......................................................... 4
1.8.4 Resolution by Parties............................................. 5
1.8.5 Final Determination............................................... 5
1.8.6 Expenses.......................................................... 5
1.9 Additional Consideration................................................. 5
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS............ 6
2.1 Exhibit 2................................................................ 6
2.2 Stock Ownership.......................................................... 6
2.3 Authority................................................................ 6
2.4 Consents................................................................. 6
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3. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB................... 6
3.1 Representations and Warranties........................................... 6
3.1.1 Organization...................................................... 7
3.1.2 Capitalization of the Parent...................................... 7
3.1.3 Authority......................................................... 7
3.1.4 Consents.......................................................... 7
3.1.5 Defaults.......................................................... 7
3.1.6 Investment Company................................................ 8
3.1.7 Financial Statements.............................................. 8
3.1.8 Taxes............................................................. 8
3.1.9 Full Authority.................................................... 8
3.1.10 Access............................................................ 8
3.1.11 Disclosure........................................................ 8
3.1.12 Parent Material Adverse Effect.................................... 9
3.1.13 Tax-Free Reorganization........................................... 9
3.1.14 Delivery of Parent Common Stock and Parent Preferred Stock........ 10
3.2 Representations and Warranties Concerning the Merger Sub................. 10
3.2.1 Organization and Standing......................................... 10
3.2.2 Capital Structure................................................. 10
3.2.3 Authority......................................................... 10
3.2.4 Consents.......................................................... 10
4. CERTAIN COVENANTS, AGREEMENTS AND PRE-CLOSING MATTERS......................... 11
4.1 Agreements of the Shareholders to be Effective Upon Closing.............. 11
4.1.1 Covenant Not to Compete........................................... 11
4.1.2 Release........................................................... 11
4.2 Elimination of Expense................................................... 12
4.3 Guaranteed Indebtedness.................................................. 12
4.4 Audit.................................................................... 12
4.5 Certain Payables and Receivables......................................... 12
4.6 Pre-Closing Covenants and Agreements..................................... 12
4.7 Confidentiality.......................................................... 12
4.8 Tax-Free Reorganization.................................................. 12
4.9 Company Plans............................................................ 13
4.10 Offices of Surviving Corporation......................................... 13
4.11 Purchase of Certain Receivables.......................................... 13
5. CONDITIONS PRECEDENT; CLOSING DELIVERIES...................................... 13
5.1 Conditions Precedent to the Obligations of the Parent and Merger Sub..... 13
5.1.1 Accuracy of Representations and Warranties........................ 13
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5.1.2 Performance of Covenants............................................ 13
5.1.3 Legal Actions or Proceedings........................................ 13
5.1.4 Approvals........................................................... 14
5.1.5 Closing Deliveries.................................................. 14
5.1.6 No Casualty, Loss or Damage......................................... 14
5.1.7 Licenses, etc....................................................... 14
5.1.8 No Material Adverse Change.......................................... 14
5.1.9 Closing of CRA Purchase............................................. 14
5.1.10 Certain Corporate Actions........................................... 14
5.2 Conditions Precedent to the Obligations of the Shareholders and the Company 14
5.2.1 Accuracy of Representations and Warranties.......................... 14
5.2.2 Performance of Covenants............................................ 14
5.2.3 Approvals........................................................... 15
5.2.4 Closing Deliveries.................................................. 15
5.2.5 Closing of CRA Purchase............................................. 15
5.3 Deliveries by the Shareholders at the Closing.............................. 15
5.3.1 Closing Certificates................................................ 15
5.3.2 Stock Transfer Restriction Agreement................................ 15
5.3.3 Employment Agreements............................................... 15
5.3.4 Adoption Agreement.................................................. 15
5.3.5 Registration Rights Agreement....................................... 15
5.3.6 Opinion of Counsel for the Shareholders and the Company............. 15
5.3.7 Documents, Stock Certificates....................................... 16
5.3.8 Discharge of Indebtedness, Releases, Etc............................ 16
5.4 Deliveries by the Parent at the Closing.................................... 16
5.4.1 Closing Certificates................................................ 16
5.4.2 Registration Rights Agreement....................................... 16
5.4.3 Opinion of Counsel for the Parent and Merger Sub.................... 16
5.4.4 Adoption Agreement.................................................. 17
5.4.5 Closing Merger Consideration........................................ 17
5.4.6 Employment Agreements............................................... 17
6. SURVIVAL, INDEMNIFICATIONS...................................................... 17
6.1 Survival................................................................... 17
6.2 Indemnification............................................................ 18
6.2.1 Parent Indemnified Parties.......................................... 18
6.2.2 Parent Indemnity.................................................... 18
6.3 Limitations................................................................ 19
6.4 Procedures for Indemnification............................................. 19
6.4.1 Notice.............................................................. 19
6.4.2 Legal Defense....................................................... 20
6.4.3 Settlement.......................................................... 20
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6.4.4 Cooperation......................................................... 20
6.5 Subrogation................................................................ 21
6.6 Exclusive Remedy........................................................... 21
7. TERMINATION..................................................................... 21
7.1 Grounds for Termination.................................................... 21
7.1.1 Mutual Consent...................................................... 21
7.1.2 Optional By the Company............................................. 21
7.1.3 Optional By the Parent.............................................. 21
7.1.4 Breach By the Parent or Merger Sub.................................. 21
7.1.5 Breach by the Company or any Shareholder............................ 21
7.2 Effect of Termination...................................................... 21
8. MISCELLANEOUS................................................................... 22
8.1 Notice..................................................................... 22
8.2 Further Documents.......................................................... 22
8.3 Assignability.............................................................. 22
8.4 Exhibits and Schedules..................................................... 22
8.5 Sections and Articles...................................................... 23
8.6 Entire Agreement........................................................... 23
8.7 Headings................................................................... 23
8.8 CONTROLLING LAW............................................................ 23
8.9 Public Announcements....................................................... 23
8.10 No Third Party Beneficiaries............................................... 23
8.11 Amendments and Waivers..................................................... 23
8.12 No Employee Rights......................................................... 24
8.13 Non-Recourse............................................................... 24
8.14 When Effective............................................................. 24
8.15 Takeover Statutes.......................................................... 24
8.16 Number and Gender of Words................................................. 24
8.17 Invalid Provisions......................................................... 24
8.18 Multiple Counterparts...................................................... 24
8.19 No Rule of Construction.................................................... 25
8.20 Expenses................................................................... 25
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LIST OF EXHIBITS
Exhibit 1.5.1..............................Consent of Shareholders of Company
Exhibit 1.5.2.......................Consent of Sole Shareholder of Merger Sub
Exhibit 1.........................Determination of Final Merger Consideration
Exhibit 1.7.............................................Letter of Transmittal
Exhibit 1.9..........................................Additional Consideration
Exhibit 2..........................................................Statements
Exhibit 2.2.................................Ownership of Company Common Stock
Exhibit 3.1.2.............................Parent Options, Subscriptions, etc.
Exhibit 3.1.4......................................Required Consents - Parent
Exhibit 4.2.........................................Expenses to be eliminated
Exhibit 4.3...........................................Guaranteed Indebtedness
Exhibit 4.6.............................................Pre-Closing Covenants
Exhibit 4.9......................................................Company Plan
Exhibit 5.3.2............................Stock Transfer Restriction Agreement
Exhibit 5.3.3...................................................Employee List
Exhibit 5.3.3A-1, 5.3.3A-2...............................Employment Agreement
Exhibit 5.3.4..............................................Adoption Agreement
Exhibit 5.3.5...................................Registration Rights Agreement
Exhibit 5.3.6.................Opinion of Counsel for Shareholders and Company
Exhibit 5.3.8..........................................Terminated Obligations
Exhibit 5.4.3....................................Opinion of Counsel to Parent
Exhibit X..........................................Certificate of Designation
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INDEX OF DEFINED TERMS
Page
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Accountants........................................................... 5
Agreement............................................................. 1
Applicable Corporate Law.............................................. 1
Closing............................................................... 1
Closing Date.......................................................... 1
Closing Merger Consideration.......................................... 2
Closing Outstanding Common Stock Number............................... 2
Closing Per Share Common Stock Amount................................. 2
Closing Per Share Preferred Stock Amount.............................. 2
Closing Statement..................................................... 2
Code.................................................................. 1
Company............................................................... 1
Company Common Stock.................................................. 1
Converted Share....................................................... 3
CRA Asset Purchase Agreement.......................................... 14
Effective Time........................................................ 1
Final Outstanding Common Stock Number................................. 2
Final Per Share Cash Amount........................................... 1
Final Per Share Common Stock Amount................................... 1
Final Per Share Preferred Stock Amount................................ 1
GAAP.................................................................. 2
Indemnified Party..................................................... 19
Indemnifying Party.................................................... 19
Long-Term Debt........................................................ 2
Losses................................................................ 18
Merger................................................................ 1
Merger Sub............................................................ 1
negligent misrepresentation........................................... 21
Net After-Tax Income Amount........................................... 2
Notice of Dispute..................................................... 4
Other Ownership Interests............................................. 2
Parent................................................................ 1
Parent Common Stock................................................... 1
Parent Financial Statements........................................... 8
Parent Indemnified Parties............................................ 18
Parent Material Adverse Effect........................................ 9
Parent Preferred Stock................................................ 1
Parent Related Documents.............................................. 7
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Payment Period........................................................ 5
Settlement Notice..................................................... 20
Shareholder Related Document.......................................... 6
Shareholders.......................................................... 1
Statement of Final Per Share Amounts.................................. 4
Stock Certificate..................................................... 3
Survival Period....................................................... 17
Surviving Corporation................................................. 1
Terminated Obligations................................................ 16
Threshold............................................................. 19
Total Consideration................................................... 3
Total Parent Preferred Stock.......................................... 7
Working Capital....................................................... 3
Working Capital Addition.............................................. 3
Working Capital Deduction............................................. 3
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") made effective as of
July 16, 1997, by and among Group Maintenance America Corp., a Texas corporation
(the "Parent"), CRP Acquisition Corp., a Colorado corporation ("Merger Sub"),
Xxxxxxxx Xxxxx Products & Publications, Inc., a Colorado corporation (the
"Company"), and the undersigned holders of all of the outstanding capital stock
of the Company (the "Shareholders").
WHEREAS, the respective Boards of Directors of the Parent, Merger Sub and
the Company have each approved the merger of the Company with and into Merger
Sub (the "Merger") pursuant to this Agreement and the applicable statutes of the
State of Colorado, and pursuant to the Merger each issued and outstanding share
of Common Stock, $1.00 par value per share, of the Company ("Company Common
Stock") will be converted into the right to receive certain shares of common
stock, $.001 par value per share, of the Parent ("Parent Common Stock"), certain
shares of Series I Preferred Stock, $.001 par value per share, of the Parent
("Parent Preferred Stock") (the Certificate of Designation of which is attached
hereto as Exhibit X) and certain cash, all as provided herein;
WHEREAS, the Merger has been approved, as required by applicable law, by
the Parent, acting as sole shareholder of Merger Sub, and by the Shareholders,
as the holders of all of the outstanding capital stock of the Company;
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto agree as follows:
1. THE MERGER
1.1 The Merger. Subject to the terms and conditions hereof, and in
accordance with the Colorado Business Corporation Act (the "Applicable
Corporate Law") upon the Effective Time (as defined in Section 1.2), the Company
shall be merged with and into Merger Sub. Merger Sub, as the surviving entity
following the Merger, is sometimes referred to in this Agreement as the
"Surviving Corporation."
1.2 Effective Time of the Merger. In accordance with the requirements of
applicable law, appropriate Articles of Merger under the Applicable Corporate
Law shall be prepared, executed and submitted filing with the Secretary of
State of the State of Colorado as soon as practicable following the Closing (as
defined below). The date of such filing is referred to in this Agreement as the
"Effective Time."
1.3 Closing. The closing of the Merger ("Closing") will take place at
10:00 a.m. at the offices of Bracewell & Xxxxxxxxx, L.L.P. in Houston, Texas on
or about July 18, 1997, but in no event later than December 31, 1997 ("Closing
Date"); provided that each of the conditions precedent to the obligations of the
parties to effect the Merger set forth in Article 5 of this Agreement are then
satisfied or waived by the applicable party. The parties may agree in writing
on another date, time or place for the Closing. At the
Closing, the parties will deliver or cause to be delivered the documents
described in Sections 5.3 and 5.4 below.
1.4 Effects of the Merger.
1.4.1 At the Effective Time. At the Effective Time, (i) the Company
shall merge with and into Merger Sub and as a result thereof, the separate
existence of the Company shall cease, (ii) the Articles of Incorporation of
Merger Sub, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation, except that the Articles
of Incorporation of Merger Sub shall be amended to provide that the name of the
Surviving Corporation shall be changed to "Xxxxxxxx Xxxxx Products &
Publications, Inc.," (iii) the Bylaws of Merger Sub as in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
and (iv) the directors and officers of Merger Sub immediately prior to the
Effective Time shall become the directors and officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected or appointed, as the case may be.
1.4.2 Effects on the Surviving Corporation. As of and after the
Effective Time, the Surviving Corporation shall possess all the rights,
privileges, immunities and franchises of a public as well as of a private nature
previously belonging to the Company and Merger Sub; and all property (real,
personal and mixed), and all debts due on whatever account, including
subscriptions to shares, and all other choses in action, and all and every other
interest of or belonging to or due to each of the Company and Merger Sub shall
be transferred to, and vested in, the Surviving Corporation without further act
or deed; and all such property, rights and privileges, powers and franchises and
all and every other interest shall be thereafter the property of the Surviving
Corporation as they were of the Company and Merger Sub; and the title to any
real estate, or interest therein, whether by deed or otherwise, shall not revert
or be in any way impaired by reason of the Merger. The Surviving Corporation
shall be responsible and liable for all the liabilities and obligations of the
Company and Merger Sub, and any claim existing, or action or proceeding pending,
by or against the Company or Merger Sub may be prosecuted against the Surviving
Corporation. Neither the rights of creditors nor any liens upon the property of
the Company or Merger Sub shall be impaired by the Merger, and all debts,
liabilities and duties of each of the Company and Merger Sub shall attach to the
Surviving Corporation, and may be enforced against it to the same extent as if
such debts, liabilities and duties had been incurred or contracted by it, all in
accordance with the Applicable Corporate Law and the terms of this Agreement.
1.5 Written Consents and Other Actions.
1.5.1 Unanimous Written Consent of the Shareholders; Other Matters.
Contemporaneously with the execution hereof, the Shareholders (i) are executing
and delivering to the Company a Unanimous Written Consent in substantially the
form of Exhibit 1.5.1 attached hereto, and (ii) hereby acknowledge that they are
aware of their dissenter's or appraisal rights with respect to the Merger and
their receipt of a copy of the provisions of Article 111 of the Applicable
Corporate Law and have elected not to exercise such rights.
1.5.2 Written Consent of the Sole Shareholder of Merger Sub.
Contemporaneously with the execution hereof, the Parent is executing and
delivering to Merger Sub a written consent of the sole
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shareholder of Merger Sub, in the form of Exhibit 1.5.2 attached hereto,
pursuant to the applicable provisions of the Applicable Corporate Law, adopting
this Agreement.
1.5.3 All Other Necessary Actions. In addition to the actions set
forth in Sections 1.5.1 and 1.5.2, the Parent, Merger Sub and the Company will
take all actions necessary in accordance with the Applicable Corporate Law and
their respective articles of incorporation and bylaws to cause the Merger to be
consummated on, and subject to, the terms set forth in this Agreement and the
Applicable Corporate Law.
1.6 Conversion of Stock. As of the Effective Time, by virtue of the
Merger and without further action on the part of any holder of shares of Company
Common Stock or any holder of shares of capital stock of Merger Sub:
1.6.1 Merger Sub Capital Stock. Each share of capital stock of Merger
Sub issued and outstanding at the Effective Time shall remain outstanding and
shall be unchanged at and after the Merger and immediately following the
Effective Time shall constitute all of the issued and outstanding capital stock
of the Surviving Corporation.
1.6.2 Cancellation of the Company Treasury Stock. All shares of
Company Common Stock that are owned by the Company as treasury stock or by any
of its subsidiaries shall be canceled and retired and shall cease to exist and
no stock of the Parent or other consideration shall be delivered in exchange
therefor.
1.6.3 Merger Consideration. Each share of Company Common Stock (other
than shares to be canceled in accordance with Section 1.6.2) shall be converted
into the right to receive (i) that number of shares of Parent Common Stock equal
to the Final Per Share Common Stock Amount (as defined in Exhibit 1 attached
hereto), and (ii) except as set forth below, that number of shares of Parent
Preferred Stock equal to the Final Per Share Preferred Stock Amount; provided,
however, that in lieu of receiving certain shares of Parent Preferred Stock owed
to hereunder, if any, Xx. Xxxxx Xxxxxxx may receive up to $250,000 in cash and
Xx. Xxxxx Xxxxxxx may receive up to $200,000 in cash. For purposes of this
Agreement, each $1 of cash paid to Xx. Xxxxx Xxxxxxx and Xx. Xxxxx Xxxxxxx shall
reduce the number of shares of Parent Preferred Stock owed to them in exchange
for their Company Common Stock by one share. Each share of Company Common Stock
so converted into the right to receive shares of Parent Preferred Stock equal to
the Final Per Share Preferred Stock Amount (or as to Xx. Xxxxx Xxxxxxx and Xx.
Xxxxx Xxxxxxx, Parent Preferred Stock and/or cash) and shares of Parent Common
Stock equal to the Final Per Share Common Stock Amount (a "Converted Share")
shall, by virtue of the Merger and without any action on the part of the holder
thereof, at the Effective Time no longer be outstanding and shall at such time
be canceled and retired and shall cease at such time to exist, and each holder
of a certificate which prior to the Effective Time validly evidenced any such
Converted Share (a "Stock Certificate") shall thereafter cease to have any
rights with respect to such Converted Share, except, upon the surrender of the
Stock Certificate and a duly executed and completed letter of transmittal in
accordance with Section 1.7, the right to receive such Parent Common Stock,
Parent Preferred Stock (or, in the case of Xx. Xxxxx Xxxxxxx and Xx. Xxxxx
Xxxxxxx, Parent Preferred Stock and/or cash) at the times and in the manner set
forth herein.
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1.7 Exchange of and Payment for Stock.
1.7.1 Delivery of Company Common Stock and Closing Merger
Consideration. Prior to the Closing, the Parent will deliver to each
Shareholder a letter of transmittal, in substantially the form attached hereto
as Exhibit 1.7, to be used for the purpose of surrendering the Stock
Certificates in exchange for the right to receive the Final Per Share Preferred
Stock Amount (or, in the case of Xx. Xxxxx Xxxxxxx and Xx. Xxxxx Xxxxxxx, Parent
Preferred Stock and/or cash) and the Final Per Share Common Stock Amount for
each Converted Share evidenced by such Stock Certificate. All of the Company
Common Stock held by the Shareholders will be surrendered by the Shareholders to
the Parent together with properly completed and executed letters of transmittal
(with each such signature guaranteed by a commercial bank or notarized by a
notary public or similar official reasonably satisfactory to the Parent), and
the Parent shall cause to be delivered to the Shareholders at the Closing the
Closing Per Share Preferred Stock Amount (as defined in Exhibit 1 attached
hereto) and the Closing Per Share Common Stock Amount (as defined in Exhibit 1
attached hereto) applicable to each of the Converted Shares evidenced by the
Stock Certificates properly surrendered (with properly executed and completed
letters of transmittal) by each Shareholder to the Parent.
1.7.2 Assignments. The assignment, transfer or other disposition of
record or beneficial ownership of any shares of Company Common Stock may not be
made on or after the date hereof.
1.7.3 Payment In Full Satisfaction of All Rights. The delivery of the
Closing Per Share Preferred Stock Amount and the Closing Per Share Common Stock
Amount to the Shareholders with respect to their Converted Shares shall be
deemed to be payment in full satisfaction of all rights pertaining to the
outstanding Converted Shares except for the right to receive additional shares
of Parent Preferred Stock and Parent Common Stock pursuant to Sections 1.8 and
1.9.
1.8 Post-Closing Determination of Final Merger Consideration.
1.8.1 Statement. No later than 60 days after the Closing, the Parent
shall deliver to the Shareholders a statement showing the Final Outstanding
Common Stock Number (as defined in Exhibit 1 attached hereto), the Final Per
Share Preferred Stock Amount, the Final Per Share Common Stock Amount and the
Final Merger Consideration (as defined in Exhibit 1 attached hereto) (the
"Statement of Final Per Share Amounts").
1.8.2 Review. After delivery to the Shareholders of the Statement of
Final Per Share Amounts, the Shareholders and their representatives shall be
afforded the opportunity to review and inspect all of the financial records,
work papers, schedules and other supporting papers relating to the preparation
of the Statement of Final Per Share Amounts, and to consult with the Parent and
its representatives regarding the methods used in the preparation of the
Statement of Final Per Share Amounts.
1.8.3 Disputes. The Final Outstanding Common Stock Number, the Final
Per Share Preferred Stock Amount, the Final Per Share Common Stock Amount and
the Final Merger Consideration as shown on the Statement of Final Per Share
Amounts shall be final, conclusive and binding for purposes of this Agreement,
unless the Shareholders shall deliver to the Parent a written notice of
disagreement ("Notice of Dispute") with any item or items in the Statement of
Final Per Share Amounts within 10 business days following receipt of the
Statement of Final Per Share Amounts, specifying in reasonable detail the
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nature and extent of such disagreement; provided, however, that no Notice of
Dispute may be given with respect to any items unless such item involves an
amount of $25,000 or more. If a Notice of Dispute is not properly given within
such time, the Final Outstanding Common Stock Number, the Final Per Share
Preferred Stock Amount, the Final Per Share Common Stock Amount and the Final
Merger Consideration as set forth in the Statement of Final Per Share Amounts
shall be final, conclusive and binding for purposes of this Agreement.
1.8.4 Resolution by Parties. If a Notice of Dispute is properly given,
the Parent and the Shareholders agree to negotiate in good faith and use their
best efforts to resolve any disagreement with respect to the Statement of Final
Per Share Amounts. If the Parent and the Shareholders shall not reach such
resolution within 30 days following receipt by the Parent of a properly given
Notice of Dispute, the dispute shall be referred to the KPMG Peat Marwick LLP
"Accountants"), who shall resolve such dispute within 30 days after its
submission to them. The Parent and the Shareholders (if the dispute is resolved
by them or the Statement of Final Per Share Amounts otherwise becomes final
pursuant hereto without referral to the Accountants) or the Accountants (if a
dispute is resolved by them) shall set forth such resolution in writing and such
writing shall (i) set forth the Final Outstanding Common Stock Number, the Final
Per Share Preferred Stock Amount, the Final Per Share Common Stock Amount and
the Final Merger Consideration and (ii) be final, conclusive and binding for
purposes of this Agreement.
1.8.5 Final Determination. Within 10 business days following the final
determination of the Final Outstanding Common Stock Number, the Final Per Share
Preferred Stock Amount, the Final Per Share Common Stock Amount and the Final
Merger Consideration as provided in this Section 1.9 (such period being referred
to as the "Payment Period") (i) the Parent shall deliver to each Shareholder (a)
the number of shares of Parent Preferred Stock, if any, by which the aggregate
of the Final Per Share Preferred Stock Amount deliverable to such Shareholder,
as finally determined pursuant hereto, exceeds the aggregate of the Closing Per
Share Preferred Stock Amounts delivered to such Shareholder at the Closing; and
(b) the number of shares of Parent Common Stock, if any, by which the aggregate
of the Final Per Share Common Stock Amounts deliverable to such Shareholder, as
finally determined pursuant hereto, exceeds the aggregate of the Closing Per
Share Common Stock Amounts delivered to such Shareholder at the Closing; or (ii)
each Shareholder shall deliver to the Parent (a) the number of shares of Parent
Preferred Stock (or in the case of Xx. Xxxxx Xxxxxxx and Xx. Xxxxx Xxxxxxx,
cash), if any, by which the aggregate of the Closing Per Share Preferred Stock
Amounts delivered to such Shareholder at the Closing exceeds the aggregate of
the Final Per Share Preferred Stock Amounts deliverable to such Shareholder as
finally determined pursuant hereto; and (b) the number of shares of Parent
Common Stock, if any, by which the aggregate of the Closing Per Share Common
Stock Amounts delivered to such Shareholder at the Closing exceeds the aggregate
of the Final Per Share Common Stock Amounts deliverable to such Shareholder as
finally determined pursuant hereto.
1.8.6 Expenses. The Parent and the Shareholders shall each pay their
own costs incurred in connection with this Section 1.9, including the fees and
expenses of their respective attorneys and accountants, if any. The fees and
expenses of the Accountants shall be shared 50% by the Parent and 50% by the
Shareholders.
1.9 Additional Consideration. The Parent shall deliver or cause to be
delivered to the Shareholders, as additional consideration, Additional Parent
Common Stock on the terms, subject to the
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conditions and in the amounts, if any, determined to be deliverable to the
Shareholders in accordance with Exhibit 1.9 attached hereto.
2. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE SHAREHOLDERS
The Company and the Shareholders, jointly and severally, hereby represent
and warrant to the Parent and Merger Sub as follows:
2.1 Exhibit 2. The statements in Exhibit 2 attached hereto are true and
correct.
2.2 Stock Ownership. Each Shareholder owns, beneficially and of record,
with full power to vote, the number of shares of Company Common Stock set forth
beside such Shareholder's name on Exhibit 2.2 and such shares are so held by
such Shareholder free and clear of all liens, encumbrances and adverse claims
whatsoever.
2.3 Authority. Each Shareholder has full right, power, legal capacity and
authority to (i) execute, deliver and perform this Agreement, and all other
documents and instruments referred to herein or contemplated hereby to be
executed, delivered and performed by such Shareholder (each a "Shareholder
Related Document") and (ii) consummate the transactions contemplated herein and
thereby. This Agreement has been duly executed and delivered by the
Shareholders and constitutes, and any Shareholder Related Document, when duly
executed and delivered by the Shareholders named as parties therein will
constitute, legal, valid and binding obligations of such Shareholders
enforceable against such Shareholders in accordance with their respective terms
and conditions, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
2.4 Consents. Other than the filing of the Articles of Merger, no
approval, consent, order or action of or filing with any court, administrative
agency, governmental authority or other third party is required for the
execution, delivery or performance by the Shareholders of this Agreement or any
Shareholder Related Document. The execution, delivery and performance by the
Shareholders of this Agreement and any Shareholder Related Documents do not
violate any mortgage, indenture, contract, agreement, lease or commitment or
other instrument of any kind to which any Shareholder is a party or by which any
Shareholder or such Shareholder's assets or properties may be bound or affected
or any law, rule or regulation applicable to any Shareholder or any court
injunction, order or decree or any valid and enforceable order of any
governmental agency in effect as of the date hereof having jurisdiction over any
Shareholder.
3. REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND MERGER SUB
3.1 Representations and Warranties. The Parent hereby represents and
warrants to the Shareholders and the Company as follows:
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3.1.1 Organization. The Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas. The
Parent is duly qualified or licensed as a foreign corporation authorized to do
business in all states in which any of its assets or properties may be situated
or where its business is conducted except where the failure to obtain such
qualification or license would not have a Parent Material Adverse Effect (as
defined below).
3.1.2 Capitalization of the Parent. As of the execution date of this
Agreement, the total authorized capital stock of the Parent is 100,000,000
shares of Parent Common Stock, of which 20,282,439 shares are issued and
outstanding and of which none are held in the treasury of the Parent and
50,000,000 shares of Preferred Stock, $.001 par value ("Total Parent Preferred
Stock"), of which 45,137 shares of Series A Preferred Stock are issued and
outstanding, 678,920 shares of Series B Preferred Stock are issued and
outstanding, 100,000 shares of Series C Preferred Stock are issued and
outstanding, 1,568,000 shares of D Preferred Stock are issued and outstanding,
580,000 shares of Series E Preferred Stock are issued and outstanding, and
664,691 shares of Series F Preferred Stock are issued and outstanding. The
outstanding shares of Parent Common Stock and Total Parent Preferred Stock have
been duly and validly issued and are fully paid and non-assessable. Except as
set forth on Exhibit 3.1.2, Parent has not granted any option, warrant,
subscription or similar right to any person or entity to purchase or acquire any
rights with respect to any shares of capital stock or equity interests of
Parent.
3.1.3 Authority. The Parent has the requisite power and authority to
execute, deliver and perform this Agreement and all documents and instruments
referred to herein or contemplated hereby (the "Parent Related Documents") and
to consummate the transactions contemplated herein and thereby. This Agreement
has been duly executed and delivered by the Parent and constitutes, and all the
Parent Related Documents, when executed and delivered by the Parent will
constitute, legal, valid and binding obligations of the Parent, enforceable in
accordance with their respective terms and conditions except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether applied in a proceeding at law or in
equity).
3.1.4 Consents. Except as provided on Exhibit 3.1.4, no approval,
consent, order or action of or filing with any court, administrative agency,
governmental authority or other third party is required for the execution,
delivery or performance by the Parent of this Agreement or the Parent Related
Documents or the consummation by the Parent of the transactions contemplated
hereby, except for the filing of the Articles of Merger with the Secretary of
State of Colorado.
3.1.5 Defaults. The Parent is not in default under or in violation of,
and the execution, delivery and performance of this Agreement and the Parent
Related Documents and the consummation by the Parent of the transactions
contemplated hereby and thereby will not result in a default under or in
violation of (i) any mortgage, indenture, charter or bylaw provision, contract,
agreement, lease, commitment or other instrument of any kind to which the Parent
is a party or by which the Parent or any of its properties or assets may be
bound or affected or (ii) any law, rule or regulation applicable to the Parent
or any court injunction, order or decree, or any valid and enforceable order of
any governmental agency in effect as of the date hereof having jurisdiction over
the Parent, which default or violation prevents the Parent from consummating the
transactions contemplated hereby or is reasonably likely to have a Parent
Material Adverse Effect.
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3.1.6 Investment Company. The Parent is not an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
3.1.7 Financial Statements. The Parent has provided certain financial
statements to the Shareholders ("Parent Financial Statements") and such Parent
Financial Statements have been prepared in accordance with GAAP and fairly
present the consolidated financial position, results of operations and cash
flows of the Parent and its then existing consolidated subsidiaries as of the
dates and for the periods indicated, subject to normal year-end adjustments and
any other adjustments described therein or in the notes or schedules thereto.
The books and records of the Parent have been kept in reasonable detail and
accurately and fairly reflect the transactions of the Parent.
3.1.8 Taxes. The Parent has either accrued, discharged or caused to be
discharged, as the same have become due, or the Parent Financial Statements
contain adequate accruals and reserves for, all taxes, interest thereon, fines
and penalties of every kind and character, attributable or relating to the
properties and business of the Parent for the period covered by the Parent
Financial Statements.
3.1.9 Full Authority. The Parent has the corporate power and authority
and has obtained all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law, as defined in
Exhibit 2) necessary to own and/or operate its businesses, properties and assets
and to carry on its businesses as being conducted on the date of this Agreement,
except such licenses, permits, qualifications or other documentation, the
failure to obtain which is not reasonably likely to result in a Parent Material
Adverse Effect, and such businesses are now being conducted and such assets and
properties are being owned and/or operated in compliance with all applicable
laws (including Environmental Law), ordinances, rules and regulations of any
governmental agency of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, all applicable court or administrative
agency decrees, awards and orders and all such licenses, permits, qualifications
and other documentation, except where the failure to comply will not have a
Parent Material Adverse Effect, and there is no existing condition or state of
facts that would give rise to a violation thereof or a liability or default
thereunder that is reasonably likely to have a Parent Material Adverse Effect.
3.1.10 Access. The Parent has cooperated fully in permitting the
Shareholders and their representatives to make a full investigation of the
properties, operations and financial condition of the Parent and has afforded
the Shareholders and their representatives reasonable access to the offices,
buildings, real properties, machinery and equipment, inventory and supplies,
records, files, books of account, tax returns, agreements and commitments and
personnel of Parent.
3.1.11 Disclosure. No representation or warranty by the Parent in this
Agreement, and no statement contained in any certificate delivered by the Parent
to the Shareholders pursuant to this Agreement, contains any untrue statement of
a material fact or omits any material fact necessary in order to make the
statements herein or therein, in light of the circumstances under which they are
or were made, not misleading. None of the information supplied by Parent for
inclusion in the Confidential Information Statement dated June 12, 1997, or in
any supplement thereto, contained any untrue statement of a material
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fact or omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Notwithstanding the foregoing,
Parent makes no representation with respect to statements made in the
Confidential Information Statement dated June 12, 1997, or in any supplement
thereto, based on information supplied by anyone other than Parent for inclusion
therein.
3.1.12 Parent Material Adverse Effect. The term "Parent Material
Adverse Effect" shall mean an adverse effect on the properties, assets,
financial position, results of operations, long-term debt, other indebtedness,
cash flows or contingent liabilities of the Parent and its consolidated
subsidiaries, taken as a whole in an amount of $100,000 or more.
3.1.13 Tax-Free Reorganization. With respect to the qualification of
the Merger as a reorganization within the meaning of Section 368(a) of the Code:
(i) The Parent has no plan or intention to sell, exchange or otherwise
dispose or liquidate the Surviving Corporation, to merge the Surviving
Corporation with or into any other corporation, to sell or otherwise
dispose of its Surviving Corporation Common Stock except for transfers of
Surviving Corporation Common Stock to corporations of which the Parent has
control (within the meaning of Section 368(a) of the Code) at the time of
such transfer, or to cause the Surviving Corporation to sell or otherwise
dispose of any of its assets or of any assets acquired in the Merger,
except for dispositions made in the ordinary course of business or
transfers of assets to a corporation of which the Surviving Corporation has
control (within the meaning of Section 368(a) of the Code) at the time of
such transfer.
(ii) The Parent has no plan or intention to cause the Surviving
Corporation, after the Merger, to issue additional shares of its stock that
would result in the Parent losing control of the Surviving Corporation
within the meaning of Section 368(c) of the Code.
(iii) Following the Merger, the Surviving Corporation will continue
the Company's historic business or use a significant portion of its
historic business assets in a business.
(iv) Except as provided in Section 8.20 below, if the Merger is
effected, the Parent and Merger Sub will each pay their respective
expenses, if any, incurred in connection with the Merger.
(v) The Parent Common Stock that will be issued in connection with the
Merger is voting stock within the meaning of Section 368(c) of the Code.
(vi) At the Effective Time, neither the Parent nor Merger Sub will
have any outstanding warrants, options, convertible securities, or any
other right pursuant to which any person could acquire stock in the Parent
or Merger Sub which, if exercised or converted, would affect the Parent's
acquisition or retention of control of the Surviving Corporation.
(vii) Neither the Parent nor Merger Sub is an investment company as
defined in Section 368(a)(2)(F) of the Code.
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(viii) None of the Parent Common Stock received by the Shareholders as
a part of the Final Merger Consideration will be separate consideration
for, or allocable to, any employment agreement.
(ix) Neither the Parent nor Merger Sub is under the jurisdiction of a
court in a case under Title 11 of the United States Code, or a
receivership, foreclosure, or similar proceeding in a federal or state
court.
3.1.14 Delivery of Parent Common Stock and Parent Preferred Stock. The
Parent Common Stock, if issued, and the Parent Preferred Stock, if issued, if
and when issued and delivered pursuant to the Agreement will be, when delivered,
validly authorized, duly issued, fully-paid and non-assessable.
3.2 Representations and Warranties Concerning the Merger Sub. The Parent
and Merger Sub, jointly and severally, hereby represent and warrant to the
Shareholders and the Company as follows:
3.2.1 Organization and Standing. Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Colorado
3.2.2 Capital Structure. The authorized capital stock of Merger Sub
consists of 5,000 shares of common stock, par value $.01 per share, 1,000 of
which are validly issued and outstanding, fully paid and nonassessable and are
owned by the Parent free and clear of all liens, encumbrances and adverse
claims.
3.2.3 Authority. Merger Sub has the corporate power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement, the
performance by Merger Sub of its obligations hereunder and the consummation of
the transactions contemplated hereby have been duly authorized by its Board of
Directors and the Parent as its sole shareholder, and, except for the corporate
filings required by state law, no other corporate proceedings on the part of
Merger Sub are necessary to authorize this Agreement and the transaction
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Merger Sub and (assuming the due authorization, execution and
delivery hereof by the Company) constitutes a valid and binding obligation of
Merger Sub enforceable against Merger Sub in accordance with its terms, except
as such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).
3.2.4 Consents. Except as provided on Exhibit 3.1.4, no approval,
consent, order or action of or filing with any court, administrative agency,
governmental authority or other third party is required for the execution,
delivery or performance by the Merger Sub of this Agreement or the consummation
by the Merger Sub of the transactions contemplated hereby, except for the filing
of the Articles of Merger with the Secretary of State of Colorado.
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4. CERTAIN COVENANTS, AGREEMENTS AND PRE-CLOSING MATTERS
4.1 Agreements of the Shareholders to be Effective Upon Closing.
Effective upon Closing, and without further action on the part of any party or
other person, the Shareholders covenant and agree as follows:
4.1.1 Covenant Not to Compete.
(i) For the considerations specified in this Agreement and in
recognition that the covenants by the Shareholders in this Section are a
material inducement to the Parent to enter into and perform this Agreement,
each Shareholder agrees that for the period from the Closing Date to the
later to occur of (a) the date which is five years after the Closing Date
or (b) the date which is one year following any termination of such
Shareholder's employment with the Company, such Shareholder will not
represent, engage in, carry on, or have a financial interest in, directly
or indirectly, individually, as a member of a partnership or limited
liability company, equity owner, shareholder (other than as a shareholder
of less than one percent of the issued and outstanding stock of a publicly-
held company whose gross assets exceed $100 million), investor, officer,
director, trustee, manager, employee, agent, associate or consultant engage
in any business that involves indoor air quality, heating, ventilation, air
conditioning, appliance, mechanical construction or sewer cleaning products
or services or consulting, training, pricing, evaluation, brokerage or
other support services with respect to any such business within the United
States; provided, however, that (i) the period in clause (a) above shall be
reduced to three years with respect to consulting and training services
(including evaluation and brokerage services) so long as such Shareholder
does not own, directly or indirectly, any financial or equity interest in
any business that involves indoor air quality, heating, ventilation, air
conditioning, appliance, mechanical construction or sewer cleaning products
or services, and (ii) the current ownership interest of certain of the
Shareholders in Kendale Airconditioning, Inc., shall not be considered a
violation of this Section 10.20.
(ii) Each Shareholder agrees that the limitations set forth herein on
such Shareholder's rights to compete with the Parent and its affiliates as
set forth in clause (i) are reasonable and necessary for the protection of
Parent and its affiliates. In this regard, each Shareholder specifically
agrees that the limitations as to period of time and geographic area, as
well as all other restrictions on such Shareholder's activities specified
herein, are reasonable and necessary for the protection of the Parent and
its affiliates. Each Shareholder agrees that, in the event that the
provisions of this Section should ever be deemed to exceed the scope of
business, time or geographic limitations permitted by applicable law, such
provisions shall be and are hereby reformed to the maximum scope of
business, time or geographic limitations permitted by applicable law.
(iii) Each Shareholder agrees that the remedy at law for any breach by
such Shareholder of this Section 4.1.1 will be inadequate and that the
Parent shall be entitled to injunctive relief.
4.1.2 Release. Effective as of the Effective Time, each Shareholder
does hereby (i) release, acquit and forever discharge the Surviving Corporation
from any and all liabilities, obligations, claims, demands, actions or causes of
action arising from or relating to any event, occurrence, act, omission or
condition occurring or existing on or prior to the Effective Time, including,
without limitation, any claim
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for indemnity or contribution from the Surviving Corporation in connection with
the obligations or liabilities of such Shareholder hereunder, except for salary
and benefits payable to such Shareholder as an employee in the ordinary course
of business; (ii) waive all breaches, defaults or violations of any agreement
applicable to the Company Common Stock and agree that any and all such
agreements are terminated as of the Effective Time, and (iii) waive any and all
preemptive or other rights to acquire any shares of capital stock of the Company
and release any and all claims arising in connection with any prior default,
violation or failure to comply with or satisfy any such preemptive or other
rights.
4.2 Elimination of Expense. Prior to Closing, the Shareholders will
produce evidence to the satisfaction of the Parent and its lenders that the
expenses of the Company as described on Exhibit 4.2 hereto have been eliminated
as expenses of the Surviving Corporation as of and following the Closing Date.
4.3 Guaranteed Indebtedness. Within 30 days after the Closing, the Parent
will either pay in full the indebtedness described on Exhibit 4.3 attached
hereto or cause any Shareholder who has personally guaranteed any such
indebtedness to be released therefrom.
4.4 Audit. Intentionally Omitted.
4.5 Certain Payables and Receivables. On or prior to Closing, the
Shareholders shall pay in full in cash all accounts receivable, notes receivable
and advances payable by any Shareholder to the Company and the Company shall pay
in full in cash all accounts payable, notes payable and advances payable by the
Company to any Shareholder.
4.6 Pre-Closing Covenants and Agreements. The Shareholders and the
Company jointly and severally agree as set forth in Exhibit 4.6 attached
hereto.
4.7 Confidentiality. Prior to the Effective Time, none of the Parent,
Merger Sub, the Company or the Shareholders will disclose the terms of this
Agreement or the Merger to any person other than their respective directors,
officers, agents or representatives, except as otherwise provided herein or
unless required by law. The Company may make appropriate disclosures of the
general nature of the Merger to its employees, vendors and customers to protect
the Company's goodwill and to facilitate the Closing. The Parent and Merger Sub
may disclose pertinent information regarding the Merger to its existing and
prospective investors, lenders, or investment bankers or financial advisors for
the purpose of obtaining financing, including, without limitation, financing
related to the IPO or other offerings of its securities, and may describe this
Agreement and the transactions contemplated hereby in any registration statement
filed by the Parent under the Securities Act and in reports filed by the Parent
under the Securities Exchange Act of 1934, and may file this Agreement as an
exhibit to any thereof. The Parent may also make appropriate disclosures of the
general nature of the Merger and the identity, nature and scope of the Company's
operations to prospective acquisition candidates in connection with the Parent's
efforts to effect additional acquisitions. Each party will have mutual approval
rights with respect to written employee presentations concerning the prospective
merger.
4.8 Tax-Free Reorganization. Unless the other parties shall otherwise
agree in writing, none of the Shareholders, the Parent, Merger Sub, the Company
or the Surviving Corporation shall knowingly take
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or fail to take any action that would jeopardize the qualification of the Merger
as a reorganization within the meaning of Section 368(a) of the Code.
4.9 Company Plans. Except as otherwise contemplated by this Agreement,
Company in effect at the date of this Agreement will remain in effect unless
otherwise determined by the Parent after the Effective Time.
4.10 Offices of Surviving Corporation. The Parent will permit the
Surviving Corporation to continue to operate from the Company's present offices
in Colorado unless, in the judgment of the Board of Directors of the Parent,
continued operation from such present offices is not in the best interests of
the Parent.
4.11 Purchase of Certain Receivables. If any accounts receivable included
in current assets of the Company for purposes of determining Working Capital (as
defined in Exhibit 1) remain unpaid in full for 120 days after the Closing, the
Shareholders shall, upon written request by the Surviving Corporation made
within 150 days after the Closing, purchase the same from the Surviving
Corporation, without recourse, for the uncollected amount thereof.
5. CONDITIONS PRECEDENT; CLOSING DELIVERIES
5.1 Conditions Precedent to the Obligations of the Parent and Merger Sub.
The obligations of the Parent and Merger Sub to effect the Merger under this
Agreement are subject to the satisfaction of each of the following conditions,
unless waived by the Parent in writing to the extent permitted by applicable
law:
5.1.1 Accuracy of Representations and Warranties. The representations
and warranties of the Shareholders and the Company contained in this Agreement,
in Exhibit 2 and the Disclosure Schedule referred to therein and the other
Exhibits provided by the Shareholders or the Company pursuant to this Agreement
or in any closing certificate or document delivered to the Parent pursuant
hereto shall be true and correct at and as of the Closing Date as though made at
and as of that time other than such representations and warranties as are
specifically made as of another date, and the Shareholders and the Company shall
each have delivered to the Parent and Merger Sub a certificate to that effect.
5.1.2 Performance of Covenants. The Shareholders and the Company shall
have performed and complied with all covenants of this Agreement to be performed
or complied with by them at or prior to the Closing Date, and the Shareholders
and the Company shall each have delivered to the Parent and Merger Sub a
certificate to that effect.
5.1.3 Legal Actions or Proceedings. No legal action or proceeding
shall have been instituted after the date hereof against the Company or against
the Parent or Merger Sub arising by reason of the acquisition of the Company
pursuant to this Agreement, which is reasonably likely (i) to restrain, prohibit
or invalidate the consummation of the transactions contemplated by this
Agreement, (ii) to have a Company Material Adverse Effect or (iii) to have a
Parent Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement, and the Shareholders and the
Company shall each have delivered to the Parent and Merger Sub a certificate to
that effect.
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5.1.4 Approvals. The Company and the Shareholders shall have procured
all of the consents, approvals and waivers of third parties or any regulatory
body or authority, whether required contractually or by applicable law or
otherwise necessary for the execution, delivery and performance of this
Agreement (including the Company Related Documents and the Shareholder Related
Documents) by the Company and the Shareholders prior to the Closing Date, and
the Shareholders and the Company shall each have delivered to the Parent and the
Merger Sub a certificate to that effect.
5.1.5 Closing Deliveries. All documents required to be executed or
delivered at Closing by the Shareholders pursuant to Section 5.3 of this
Agreement shall have been so executed and delivered.
5.1.6 No Casualty, Loss or Damage. No material casualty, loss or
damage shall have occurred on or prior to the Effective Time to any of the
properties or assets of the Company.
5.1.7 Licenses, etc. The Company shall have obtained all such licenses
and permits as are legally required for the continued operation of the business
after the Effective Time, except such licenses and permits, the absence of which
will not have a Company Material Adverse Effect.
5.1.8 No Material Adverse Change. Since February 28, 1997, there shall
not have been any event that in the reasonable judgment of the Parent materially
and adversely affects the properties, assets, financial condition, results of
operations, cash flows, businesses or prospects of the Company.
5.1.9 Closing of CRA Purchase. The Parent shall have been satisfied
that the closing under that certain Asset Purchase Agreement of even date
herewith among the Parent, Merger Sub, Xxxxxxxx Xxxxx & Associates and the
partners of Xxxxxxxx Xxxxx & Associates (the "CRA Asset Purchase Agreement") has
occurred or will occur contemporaneously with or immediately after the Closing.
5.1.10 Certain Corporate Actions. All necessary director and
shareholder resolutions, waivers and consents required to consummate the
transactions contemplated hereunder shall have been executed and delivered.
5.2 Conditions Precedent to the Obligations of the Shareholders and the
Company. The obligations of the Shareholders and the Company under this
Agreement are subject to the satisfaction of each of the following conditions,
unless waived by the Shareholders and the Company in writing to the extent
permitted by applicable law:
5.2.1 Accuracy of Representations and Warranties. The representations
and warranties of the Parent and Merger Sub contained in this Agreement or in
any closing certificate or document delivered to the Shareholders or the Company
pursuant hereto shall be true and correct on and as of the Closing Date as
though made at and as of that date other than such representations and
warranties as are specifically made as of another date, and the Parent and
Merger Sub shall have delivered to the Shareholders and the Company a
certificate to that effect.
5.2.2 Performance of Covenants. The Parent and Merger Sub shall have
performed and complied with all covenants of this Agreement to be performed or
complied with by them at or prior to the
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Closing Date and the Parent and Merger Sub shall have delivered to the
Shareholders and the Company a certificate to such effect.
5.2.3 Approvals. The Parent shall have procured all of the consents,
approvals and waivers specified in Exhibit 3.1.4 prior to the Closing Date, and
the Parent shall have delivered to the Shareholders and the Company a
certificate to that effect.
5.2.4 Closing Deliveries. All documents required to be executed or
delivered at Closing by the Parent pursuant to Section 5.4 of this Agreement
shall have been so executed and delivered.
5.2.5 Closing of CRA Purchase. The Shareholders shall have been
satisfied that the closing under the CRA Asset Purchase Agreement has occurred
or will occur contemporaneously with or immediately after the Closing.
5.3 Deliveries by the Shareholders at the Closing. At the Closing,
simultaneously with the deliveries by the Parent specified in Section 5.4 below,
and in addition to any deliveries required to be made by the Shareholders and
the Company pursuant to any other transaction document at the Closing, the
Shareholders shall deliver or cause to be delivered to the Parent the following:
5.3.1 Closing Certificates. The Shareholders and the Company shall
deliver the certificates required pursuant to Sections 5.1.1, 5.1.2, 5.1.3, and
5.1.4.
5.3.2 Stock Transfer Restriction Agreement. The Shareholders shall
execute and deliver a Stock Transfer Restriction Agreement on the Closing Date,
effective as of the Effective Time, substantially in the form set forth in
Exhibit 5.3.2.
5.3.3 Employment Agreements. Certain employees of the Company
specified on Exhibit 5.3.3 shall execute and deliver an Employment Agreement
(with the insertion of the appropriate Section 7(b) based on whether any such
employee is designated an "Executive or Key Employee" or "Manager" on Exhibit
5.3.3 and with the blanks appropriately completed as set forth in a confidential
letter between the Company and the Parent) with the Company on the Closing Date,
effective as of the Effective Time, substantially in the form(s) set forth in
Exhibit 5.3.3A-1 and 5.3.3.A-2.
5.3.4 Adoption Agreement. If requested by the Parent, the Shareholders
shall execute and deliver at the Closing, effective as of the Effective Time, an
Adoption Agreement substantially in the form attached as Exhibit 5.3.4.
5.3.5 Registration Rights Agreement. The Shareholders shall execute
and deliver a Registration Rights Agreement at the Closing, effective as of the
Effective Time, substantially in the form set forth in Exhibit 5.3.5 attached
hereto.
5.3.6 Opinion of Counsel for the Shareholders and the Company. The
Shareholders shall deliver the favorable opinion of Xxxxxx Xxxxxx, counsel to
the Shareholders and the Company, dated the Effective Time, substantially in the
form and to the effect set forth in Exhibit 5.3.6 attached hereto.
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5.3.7 Documents, Stock Certificates. The Shareholders shall execute
and deliver, and shall cause the Company to execute and deliver, the documents,
certificates, opinions, instruments and agreements required to be executed and
delivered by the Company or its officers or directors or the Shareholders at the
Closing as contemplated hereby or as may be reasonably requested by the Parent
and shall deliver or cause to be delivered the documents and evidence required
under Section 4. Stock Certificates representing all of the outstanding Company
Common Stock and properly executed and completed letters of transmittal shall be
delivered by the Shareholders to the Parent.
5.3.8 Discharge of Indebtedness, Releases, Etc. The indebtedness of
the Company referred to in Exhibit 5.3.8 attached hereto ("Terminated
Obligations") shall be paid in full or refinanced on terms acceptable to the
Parent, and the Shareholders shall cause all holders of any such Terminated
Obligations to deliver to the Parent, in form reasonably satisfactory to the
Parent and the lenders to the Parent or Merger Sub, such customary releases,
termination statements, consents, approvals or other documents or instruments
required, in the judgment of the Parent, to release and terminate all liens,
security interests, claims, or rights of such holders against the Surviving
Corporation or the Parent or any of their respective assets in connection
therewith.
The consummation of the Closing shall not be deemed to be a waiver by
the Parent or the Surviving Corporation of any of their rights or remedies
against the Shareholders hereunder for any breach of warranty, covenant or
agreement by the Company or the Shareholders herein irrespective of any
knowledge of or investigation made by or on behalf of the Parent or Merger Sub;
provided, however, that if the Company shall disclose in writing to the Parent
prior to the Closing Date a specified breach of a specifically identified
representation, warranty, covenant or agreement of the Company or any
Shareholder herein by the Company or any the Shareholder, and requests a waiver
thereof by the Parent, and the Parent shall waive any such specifically
identified breach in writing prior to the Closing Date, the Parent and the
Surviving Corporation, for themselves and for each Parent Indemnified Party (as
defined below) shall be deemed to have waived their respective rights and
remedies hereunder for, and the Shareholders shall have no liability with
respect to, any such specifically identified breach, to the extent so identified
by the Company and so waived by the Parent.
5.4 Deliveries by the Parent at the Closing. At the Closing,
simultaneously with the deliveries by the Shareholders specified in Section 5.3
above, and in addition to any other deliveries to be made by the Parent and
Merger Sub pursuant to any other transaction document at the Closing, the Parent
shall deliver or cause to be delivered to the Shareholders the following:
5.4.1 Closing Certificates. The Parent and Merger Sub shall deliver
the certificates required pursuant to Sections 5.2.1, 5.2.2 and 5.2.3.
5.4.2 Registration Rights Agreement. The Parent shall execute and
deliver to the Shareholders a Registration Rights Agreement at the Closing,
effective as of the Effective Time, substantially in the form set forth in
Exhibit 5.3.5.
5.4.3 Opinion of Counsel for the Parent and Merger Sub. The Parent
shall deliver the favorable opinion of its legal counsel dated the Effective
Time, substantially in the form and to the effect set forth in Exhibit 5.4.3.
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5.4.4 Adoption Agreement. The Parent shall execute and deliver to the
Shareholders an Adoption Agreement at the Closing, effective as of the Effective
Time, substantially in the form attached as Exhibit 5.3.4.
5.4.5 Closing Merger Consideration. The Parent shall deliver the
Closing Merger Consideration to the Shareholders.
5.4.6 Employment Agreements. The Parent shall cause the Merger Sub to
deliver the Employment Agreements contained in Section 5.3.3 of this Agreement.
The consummation of the Closing shall not be deemed to be a waiver by
the Shareholders of any of their rights or remedies hereunder for breach of any
warranty, covenant or agreement herein by the Parent or Merger Sub irrespective
of any knowledge of or investigation with respect thereto made by or on behalf
of any Shareholder; provided, however, that if the Parent shall disclose in
writing to the Shareholders prior to the Closing a specified breach of a
specifically identified representation, warranty, covenant or agreement of the
Parent or Merger Sub contained herein by the Parent or Merger Sub, and requests
a waiver thereof by the Company and the Shareholders, and the Company and the
Shareholders shall waive any such specifically identified breach in writing
prior to the Closing, the Company and the Shareholders shall be deemed to have
waived their rights and remedies hereunder for, and the Parent and Merger Sub
shall have no liability or obligation to the Shareholders or the Company with
respect to, any such specifically identified breach, to the extent so identified
by the Parent and waived by the Company and the Shareholders.
6. SURVIVAL, INDEMNIFICATIONS
6.1 Survival. The representations and warranties set forth in this
Agreement and the other documents, instruments and agreements contemplated
hereby shall survive after the date hereof to the extent provided herein. The
representations and warranties of the Shareholders and the Company herein and in
the Shareholder Related Documents and the Company Related Documents (as defined
in Exhibit 2) other than those of the Shareholders and the Company in Sections
2.2, 2.3, 2.4 and in Sections 2 and 3 of Exhibit 2 shall survive for a period of
36 months after the Closing Date and the representations and warranties of the
Shareholders and the Company contained in Sections 2.2, 2.3, 2.4 and in Sections
2 and 3 of Exhibit 2 shall survive for the maximum period permitted by
applicable law. The representations and warranties of the Parent herein and in
the Parent Related Documents, other than those in Sections 3.1.3, 3.1.4 and
3.1.14, shall survive for a period of 36 months after the Closing Date and the
representations and warranties of the Parent contained in Sections 3.1.3, 3.1.4
and 3.1.14 shall survive for the maximum period permitted by applicable law.
The periods of survival of the representations and warranties as stated above in
this Section 6.1 are referred to herein as the "Survival Period." The
liabilities of the parties under their respective representations and warranties
shall expire as of the expiration of the applicable Survival Period and no claim
for indemnification may be made with respect to any breach of any representation
or warranty, the applicable Survival Period of which shall have expired, except
to the extent that written notice of such breach shall have been given to the
party against which such claim is asserted on or before the date of such
expiration. The covenants and agreements of the parties herein (including but
not limited to Exhibit 4.6) and in other documents and instruments executed and
delivered in connection with the closing of the transactions contemplated hereby
shall survive for the maximum period permitted by law.
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6.2 Indemnification.
6.2.1 Parent Indemnified Parties. Subject to the provisions of
Sections 6.1 and 6.3 hereof, the Shareholders, severally in proportion to the
ratio that the number of shares of Company Common Stock owned by them as of the
date hereof bears to the total outstanding Company Common Stock as of the date
hereof, shall indemnify, save and hold harmless the Parent, the Surviving
Corporation, Merger Sub and any of their assignees (including lenders) and all
of their respective officers, directors, employees, representatives, agents,
advisors and consultants and all of their respective heirs, legal
representatives, successors and assigns (collectively the "Parent Indemnified
Parties") from and against any and all damages, liabilities, losses, loss of
value (including the value of adverse effects on cash flow or earnings), claims,
deficiencies, penalties, interest, expenses, fines, assessments, charges and
costs, including reasonable attorneys' fees and court costs (collectively
"Losses") arising from, out of or in any manner connected with or based on:
(i) the breach of any covenant of the Shareholders or the Company or
the failure by the Shareholders or the Company to perform any obligation of
the Shareholders or the Company contained herein or in any Company Related
Document or Shareholder Related Document;
(ii) any inaccuracy in or breach of any representation or warranty of
the Shareholders contained herein or in any Shareholder Related Document;
(iii) any inaccuracy in or breach of any representation or warranty of
the Company contained herein or in any Company Related Document;
(iv) indemnification payments made by the Company or the Surviving
Corporation to the Company's present or former officers, directors,
employees, agents, consultants, advisors or representatives in respect of
actions taken or omitted to be taken prior to the Closing;
(v) federal, state, county, city or other taxes (including, without
limitation, penalties and fines related thereto) based upon, arising from
or related to the assets, properties, business or operations of the Company
prior to the Closing Date; and
(vi) any act, omission, occurrence, event, condition or circumstance
occurring or existing at any time on or before the Effective Time and
involving or related to the assets, properties, business or operations now
or previously owned or operated by the Company and not (a) disclosed with
reasonable specificity in the Disclosure Schedule or (b) disclosed in the
Company Financial Statements (as defined in Exhibit 2).
The foregoing indemnities shall not limit or otherwise adversely affect the
Shareholders ' rights of indemnity for Losses under Section 6.2.2.
6.2.2 Parent Indemnity. Subject to the provisions of Sections 6.1 and
6.3, the Parent shall indemnify, save and hold harmless the Shareholders and the
Shareholders' heirs, legal representatives, successors and assigns from and
against all Losses arising from, out of or in any manner connected with or based
on:
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(i) any breach of any covenant of the Parent or Merger Sub or the
failure by the Parent or Merger Sub to perform any of its obligations
contained herein or in the Parent Related Documents;
(ii) any inaccuracy in or breach of any representation or warranty of
the Parent or Merger Sub contained herein or in the Parent Related
Documents; and
(iii) any act, omission, event, condition or circumstance occurring or
existing at any time after (but not on or before) the Effective Time and
involving or relating to the assets, properties, businesses or operations
of the Company; provided, however, that this clause (iii) shall not apply
to any Losses to the extent that such Losses result from any Shareholder's
acts or omissions after the Effective Time as an officer, director and/or
employee of the Parent, the Surviving Corporation and/or any other
affiliate of the Parent.
The foregoing indemnities shall not limit or otherwise adversely affect the
Parent Indemnified Parties' rights of indemnity for Losses under Section 6.2.1.
6.3 Limitations. The aggregate liability of the Shareholders under
Section 6.2.1(ii) or (iii) shall not exceed the cash amount equal to the Final
Merger Consideration. The aggregate liability of the Parent under Section
6.2.2(ii) shall not exceed the cash amount equal to the Final Merger
Consideration. For purposes of this Section 6.3, if the notice required
pursuant to Section 6.4 below is delivered prior to the IPO Closing (as defined
in Exhibit 1.9), the Parent Common Stock shall be valued at $7.00 per share;
provided, however, that if the notice required in Section 6.4 below is delivered
after the IPO Closing, the Parent Common Stock shall be valued at the average of
the daily closing prices (or if no closing price is reported, the average of the
daily closing bid and asked prices) of a share of Parent Common Stock for the
ten consecutive trading days ending on and including the date which is three
trading days prior to the date the notice required pursuant to Section 6.4 below
is delivered, as reflected on the principal national securities exchange if any,
on which such shares are admitted for trading, on the National Association of
Securities Dealers, Inc. National Market System if such shares are quoted
thereon or, if such shares are not quoted thereon, in the over-the-counter
market in the United States on which such shares are publicly traded; provided
that if shares of the Parent Common Stock are not then admitted to trading on
any national securities exchange or quoted on the National Association of
Securities Dealers, Inc. National Market System or otherwise traded in the over-
the-counter market, the value shall mean $7.00. Notwithstanding any other
provision of this Agreement, the Company and the Shareholders shall not be
liable to the Merger Sub and the Parent under Sections 6.2.1(ii) or (iii)
regarding any single claim, loss, expense, obligation, or other liability that
does not exceed $15,000 (the "Threshold"); provided, however, that when the
aggregate amount of all such claims, losses, expenses, obligations, and
liabilities not exceeding the Threshold reaches the Threshold, the Company and
the Shareholders shall thereafter be liable in full regarding all such claims,
losses, expenses, obligations, and liabilities in excess of the amount of the
Threshold.
6.4 Procedures for Indemnification.
6.4.1 Notice. The party (the "Indemnified Party") that may be
entitled to indemnity hereunder shall give prompt notice to any party obligated
to give indemnity hereunder (the "Indemnifying Party") of the assertion of any
claim, or the commencement of any suit, action or proceeding in respect of
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which indemnity may be sought hereunder. Any failure on the part of any
Indemnified Party to give the notice described in this Section 6.4.1 shall
relieve the Indemnifying Party of its obligations under this Article 6 only to
the extent that such Indemnifying Party has been prejudiced by the lack of
timely and adequate notice (except that the Indemnifying Party shall not be
liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any
event within 10 days thereof) after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such claim, action, suit or proceeding.
6.4.2 Legal Defense. The Parent shall have the obligation to assume
the defense or settlement of any third-party claim, suit, action or proceeding
in respect of which indemnity may be sought hereunder, provided that (i) the
Shareholders shall at all times have the right, at their option, to participate
fully therein, and (ii) if the Parent does not proceed diligently to defend the
third-party claim, suit, action or proceeding within 10 days after receipt of
notice of such third-party claim, suit, action or proceeding, the Shareholder
shall have the right, but not the obligation, to undertake the defense of any
such third-party claim, suit, action or proceeding.
6.4.3 Settlement. The Indemnifying Party shall not be required to
indemnify the Indemnified Party with respect to any amounts paid in settlement
of any third-party suit, action, proceeding or investigation entered into
without the written consent of the Indemnifying Party; provided, however, that
if the Indemnified Party is a Parent Indemnified Party, such third-party suit,
action, proceeding or investigation may be settled without the consent of the
Indemnifying Party on 10 days' prior written notice to the Indemnifying Party if
such third-party suit, action, proceeding or investigation is then unreasonably
interfering with the business or operations of the Company or the Surviving
Corporation and the settlement is commercially reasonable under the
circumstances; and provided further, that if the Indemnifying Party gives 10
days' prior written notice to the Indemnified Party of a settlement offer which
the Indemnifying Party desires to accept and to pay all Losses with respect
thereto ("Settlement Notice") and the Indemnified Party fails or refuses to
consent to such settlement within 10 days after delivery of the Settlement
Notice to the Indemnified Party, and such settlement otherwise complies with the
provisions of this Section 6.4, the Indemnifying Party shall not be liable for
Losses arising from such third-party suit, action, proceeding or investigation
in excess of the amount proposed in such settlement offer. Notwithstanding the
foregoing, no Indemnifying Party will consent to the entry of any judgment or
enter into any settlement without the consent of the Indemnified Party, if such
judgment or settlement imposes any obligation or liability upon the Indemnified
Party other than the execution, delivery or approval thereof and customary
releases of claims with respect to the subject matter thereof.
6.4.4 Cooperation. The parties shall cooperate in defending any such
third-party suit, action, proceeding or investigation, and the defending party
shall have reasonable access to the books and records, and personnel in the
possession or control of the Indemnified Party that are pertinent to the
defense. The Indemnified Party may join the Indemnifying Party in any suit,
action, claim or proceeding brought by a third party, as to which any right of
indemnity created by this Agreement would or might apply, for the purpose of
enforcing any right of the indemnity granted to such Indemnified Party pursuant
to this Agreement.
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6.5 Subrogation. Each Indemnifying Party hereby waives for itself,
himself or herself and its, his or her affiliates (as defined in Exhibit 2) any
rights to subrogation against any Indemnified Party or such Indemnified Party's
insurers for Losses arising from any third-party claims for which the
Indemnifying Party is liable or against which the Indemnifying Party
indemnifies any Indemnified Party and, if necessary, each Indemnifying Party
shall obtain waivers of such subrogation from its, his or her insurers.
6.6 Exclusive Remedy. The indemnities under this Section 8 shall be the
exclusive remedy for an Indemnified Party under this Agreement except in the
case of fraud or negligent misrepresentation. As used in this Agreement, the
term "negligent misrepresentation" means the communication of false information
to others for the purpose of guiding such others in such others' business by
failing to use reasonable care or competence in obtaining such information or
communicating such information to others.
7. TERMINATION
7.1 Grounds for Termination. This Agreement may be terminated at any time
prior to the Closing Date:
7.1.1 Mutual Consent. By the written agreement of the Company and the
Parent; or
7.1.2 Optional By the Company. By the Company by written notice to the
Parent, if the Closing shall have failed to occur by 5:00 p.m. Houston, Texas
time on December 31, 1997, but only if neither the Company nor any Shareholder
has materially breached this Agreement or has failed to perform any of their
respective material obligations under this Agreement;
7.1.3 Optional By the Parent. By the Parent, by written notice to the
Company, if the Closing shall have failed to occur by 5:00 p.m. Houston, Texas
time on December 31, 1997, but only if neither the Parent nor Merger Sub has
materially breached this Agreement or has failed to perform any of its material
obligations under this Agreement;
7.1.4 Breach By the Parent or Merger Sub. By the Company, by written
notice to the Parent, if either the Parent or Merger Sub has materially breached
this Agreement or failed to perform any of its material obligations under this
Agreement; or
7.1.5 Breach by the Company or any Shareholder. By the Parent, by
written notice to the Company, if the Company or any Shareholder has materially
breached this Agreement or has failed to perform any of their respective
material obligations under this Agreement.
7.2 Effect of Termination. If this Agreement is terminated as permitted
under Section 7.1, such termination shall be without liability of any party to
any other party, except that such termination shall be without prejudice to any
and all remedies the parties may have against each other for breach of this
Agreement.
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8. MISCELLANEOUS
8.1 Notice. Any notice, delivery or communication required or permitted
to be given under this Agreement shall be in writing, and shall be mailed,
postage prepaid, or delivered, to the addresses given below, or sent by telecopy
to the telecopy numbers set forth below, as follows:
To the Company (prior to the Effective Time) or the Shareholders:
Xxxxxxxx Xxxxx Products & Publications, Inc.
0000 Xxxxxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxx, Xx.
Telecopy: 000-000-0000
To the Parent or Merger Sub or the Surviving Corporation:
Group Maintenance America Corp.
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: President
Telecopy: (000) 000-0000
or other such address as shall be furnished in writing by any such party to the
other parties, and such notice shall be effective and be deemed to have been
given as of the date actually received.
To the extent any notice provision in any other agreement, instrument or
document required to be executed or executed by the parties in connection with
the transactions contemplated herein contains a notice provision which is
different from the notice provision contained in this Section 8.1 with respect
to matters arising under such other agreement, instrument or document, the
notice provision in such other agreement, instrument or document shall control.
8.2 Further Documents. The Shareholders shall, at any time and from time
to time after the date hereof, upon request by the Parent and without further
consideration, execute and deliver such instruments or other documents and take
such further action as may be reasonably required in order to perfect any other
undertaking made by the Shareholders hereunder.
8.3 Assignability. The Shareholders shall not assign this Agreement in
whole or in part without the prior written consent of the Parent, except by the
operation of law. The Parent may assign its rights under this Agreement, the
Company Related Documents and the Shareholder Related Documents without the
consent of any Shareholder or the Company. After the Effective Time, the
Surviving Corporation may assign its rights under this Agreement, the Company
Related Documents and the Shareholder Related Documents without the consent of
any Shareholder.
8.4 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.
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8.5 Sections and Articles. Unless the context otherwise requires, all
Sections, Articles and Exhibits referred to herein are, respectively, sections
and articles of, and exhibits to, this Agreement and all Schedules referred to
herein are schedules constituting a part of the Disclosure Schedule.
8.6 Entire Agreement. This Agreement constitutes the full understanding
of the parties, a complete allocation of risks between them and a complete and
exclusive statement of the terms and conditions of their agreement relating to
the subject matter hereof and supersedes any and all prior agreements, whether
written or oral, that may exist between the parties with respect thereto.
Except as otherwise specifically provided in this Agreement, no conditions,
usage of trade, course of dealing or performance, understanding or agreement
purporting to modify, vary, explain or supplement the terms or conditions of
this Agreement shall be binding unless hereafter made in writing and signed by
the party to be bound, and no modification shall be effected by the
acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver by
any party with respect to any breach or default or of any right or remedy and no
course of dealing shall be deemed to constitute a continuing waiver of any other
breach or default or of any other right or remedy, unless such waiver be
expressed in writing signed by the party to be bound. Failure of a party to
exercise any right shall not be deemed a waiver of such right or rights in the
future.
8.7 Headings. Headings as to the contents of particular articles and
sections are for convenience only and are in no way to be construed as part of
this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.
8.8 CONTROLLING LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS
AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THE
APPLICABLE CORPORATE LAW MANDATORILY APPLIES WITH RESPECT THERETO.
8.9 Public Announcements. After the Effective Time, no Shareholder shall
make any press release, public announcement, or public confirmation or disclose
any other information regarding this Agreement or the contents hereof.
8.10 No Third Party Beneficiaries. Except as set forth in Article 6, no
person or entity not a party to this Agreement shall have rights under this
Agreement as a third party beneficiary or otherwise.
8.11 Amendments and Waivers. This Agreement may be amended by the Parent,
Merger Sub and the Company, by action taken by their Boards of Directors to the
extent permitted by applicable law; provided, however, that no such amendment
shall (i) alter or change any provision of this Agreement, the alteration or
change of which must be adopted by the holders of capital stock of the Company
under the certificate or articles of incorporation of the Company or the
Applicable Corporate Law, or (ii) alter or change this Section 8.11, unless each
such alteration or change is adopted by the holders of shares of capital stock
of the Company as may be required by the certificate or articles of
incorporation of the Company or the Applicable Corporate Law. Prior to the
Effective Time, all amendments to this Agreement must be by an instrument in
writing signed on behalf of the Parent, Merger Sub, the Company and the
Shareholders. After the Effective Time, all amendments to this Agreement must be
by an instrument in writing signed on
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behalf of the Parent and the Shareholders. Any term or provision of this
Agreement (other than the requirements for shareholder approvals) may be waived
in writing at any time by the party which is, or whose shareholders are,
entitled to the benefits thereof.
8.12 No Employee Rights. Nothing herein expressed or implied shall confer
upon any employee of the Company, any other employee or legal representatives or
beneficiaries of any thereof any rights or remedies, including any right to
employment or continued employment for any specified period, of any nature or
kind whatsoever under or by reason of this Agreement, or shall cause the
employment status of any employee to be other than terminable at will.
8.13 Non-Recourse. No recourse for the payment of any amounts due
hereunder or for any claim based on this Agreement or the transactions
contemplated hereby or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Parent in this Agreement shall
be had against any incorporator, organizer, promoter, shareholder, officer,
director, employee or representative as such (other than the Shareholders as set
forth herein), past, present or future, of the Parent or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Agreement.
8.14 When Effective. This Agreement shall become effective only upon the
execution and delivery of one or more counterparts of this Agreement by each of
the Parent, Merger Sub, the Company and the Shareholders.
8.15 Takeover Statutes. If any "fair price," "moratorium," "control share
acquisition" or other form of anti-takeover statute or regulation shall become
applicable to the transactions contemplated hereby, the Parent and the Company
and their respective members of their Boards of Directors shall grant such
approvals and take such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated herein and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated herein.
8.16 Number and Gender of Words. Whenever herein the singular number is
used, the same shall include the plural where appropriate and words of any
gender shall include each other gender where appropriate.
8.17 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws, such provisions
shall be fully severable as if such invalid or unenforceable provisions had
never comprised a part of the Agreement; and the remaining provisions of the
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be automatically as a part of this Agreement, a provision
as similar in terms to such illegal, invalid or unenforceable provision as may
be possible and be legal, valid and enforceable.
8.18 Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes and all
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such counterparts shall, collectively, constitute one agreement, but, in making
proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart.
8.19 No Rule of Construction. All of the parties hereto have been
represented by counsel in the negotiations and preparation of this Agreement;
therefore, this Agreement will be deemed to be drafted by each of the parties
hereto, and no rule of construction will be invoked respecting the authorship of
this Agreement.
8.20 Expenses. Each of the parties shall bear all of their own expenses in
connection with the negotiation and closing of this Agreement and the
transactions contemplated hereby; provided that the Company may pay the costs of
any broker or other advisor engaged by the Shareholders (to the extent, and only
to the extent, that any such payment will not jeopardize the qualification of
the Merger as a reorganization within the meaning of Section 368(a) of the
Code); and provided further that all fees, costs and expenses incurred or
payable by the Company in connection with the negotiation and closing of this
Agreement and the transactions contemplated hereby (other than such auditing
fees and expenses paid prior to the Closing) shall be included in current
liabilities for purposes of determining Working Capital.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on
the date first hereinabove written.
PARENT:
GROUP MAINTENANCE AMERICA CORP.
-----------------------------------------------
J. Xxxxxxx Xxxxxxxx, Xx., President
MERGER SUB:
CRP ACQUISITION CORP.
By:
--------------------------------------------
President
SHAREHOLDERS:
-----------------------------------------------
Xxxxxxx Xxxxxxx Xxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxx, Xx.
-----------------------------------------------
Xxxxx Xxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxx
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COMPANY:
XXXXXXXX XXXXX PRODUCTS & PUBLICATIONS, INC.
By:
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
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