Exhibit 2.2
AGREEMENT AND PLAN OF MERGER
by and between
A.S. Environmental, Inc.
First Financial Alliance Partners, Inc.
Xxx X. Xxxxx, Xx.
Xxx X. Xxxxx, III
and
Xxxx X. Xxxx
a
n
d
Commodore Applied Technologies, Inc.
and
CXI-ASE Acquisition Corp.
TABLE OF CONTENTS
1. THE MERGER AND RELATED MATTERS.......................................... 2
1.1 Merger.................................................... 2
1.2 Conversion of Stock....................................... 3
1.3 Exchange.................................................. 3
2. CLOSING................................................................. 3
2.1 Closing................................................... 3
2.2 Deliveries at Closing..................................... 3
3. REPRESENTATIONS AND WARRANTIES OF THE ASE SHAREHOLDERS.................. 3
3.1 Organization, Standing and Qualification.................. 3
3.2 Capitalization............................................ 4
3.3 Corporate Documents....................................... 4
3.4 Ownership and Merger...................................... 4
3.5 No Violations; Consents................................... 4
3.6 No Operations, Etc........................................ 5
3.7 Litigation................................................ 5
3.8 Brokers................................................... 5
3.9 Disclosure................................................ 5
3.10 Government Authorizations and Regulations................. 5
3.11 Closing................................................... 5
4. REPRESENTATIONS AND WARRANTIES OF COMMODORE AND
CXI-ASE ACQUISITION CORP. ............................................ 6
4.1 Corporate Organization, Standing.......................... 6
4.2 Authorization of Agreement................................ 6
4.3 Brokers................................................... 6
4.4 Authorization for Commodore Common Stock.................. 6
4.5 SEC Documents............................................. 6
4.6 Tax Representations....................................... 7
5. COVENANTS OF THE ASE SHAREHOLDERS....................................... 8
5.1 Access to Information and Corporate Records............... 8
5.2 Corporate Matters......................................... 8
5.3 Conduct of Business....................................... 8
5.4 Business Organization..................................... 9
6. CONDITIONS TO CLOSING - COMMODORE AND CXI-ASE ACQUISITION
CORP. ................................................................ 9
6.1 Representations and Warranties of the ASE Shareholders.... 9
6.2 Covenants of the ASE Shareholders and ASE............... 9
6.3 Good Standing........................................... 10
6.4 Proceedings and Instruments Satisfactory................ 10
6.5 Opinion of the ASE Shareholders' Counsel................ 10
6.6 Access to Corporate Records, etc........................ 10
6.7 No Adverse Change....................................... 10
6.8 Absence of Litigation................................... 10
6.9 Corporate Resolutions................................... 10
6.10 Inter Sese Release...................................... 10
6.11 Conditions to Sciences Merger Agreement................. 11
6.12 Escrow Agreement........................................ 11
6.13 Consents................................................ 11
6.14 Resignations............................................ 11
6.15 Commodore's and CXI-ASE Acquisition Corp.'s
Merger Consideration................................... 11
7. CONDITIONS OF CLOSING - THE ASE SHAREHOLDERS.......................... 11
7.1 Representations and Warranties of Commodore
and CXI-ASE Acquisition Corp............................ 11
7.2 Covenants of Commodore and CXI-ASE Acquisition Corp..... 11
7.3 Corporate Resolutions................................... 11
7.4 Non-Taxable Event....................................... 12
7.5 Opinion of Counsel...................................... 12
7.6 AMEX Listing............................................ 12
7.7 Material Adverse Effect................................. 12
7.8 Registration Rights Agreement........................... 12
7.9 ASE Merger Consideration................................ 12
8. TERMINATION PRIOR TO CLOSING.......................................... 12
8.1 Termination............................................. 12
8.2 Effect on Obligations................................... 13
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................ 13
9.1 Commodore's Reliance.................................... 13
9.2 The ASE Shareholders' Reliance.......................... 13
10. INDEMNIFICATION...................................................... 14
10.1 Obligation of the ASE Shareholders to Indemnify......... 14
10.2 Obligation of Commodore to Indemnify.................... 14
10.3 Procedure............................................... 15
10.4 Adjustment of Liability................................. 16
10.5 Limitation on Indemnification........................... 16
10.6 Payment................................................. 16
10.7 Sole and Exclusive Remedy............................... 15
11. MISCELLANEOUS........................................................ 17
11.1 Notices................................................. 17
11.2 Entire Agreement........................................ 18
11.3 Amendments.............................................. 19
11.4 Waivers; Remedies....................................... 19
11.5 Execution and Delivery.................................. 19
11.6 Exhibits and Schedules.................................. 19
11.7 Drafting................................................ 19
11.8 Recitals................................................ 19
11.9 Attorney and Professional Fees.......................... 19
11.10 Captions................................................ 19
11.11 Controlling Law......................................... 19
11.12 Implementing Agreement.................................. 19
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER is dated as of September 11, 1996 by
and between (i) A.S. Environmental, Inc., a corporation organized and existing
under the laws of the State of Delaware ("ASE"); (ii) the holders of all of the
issued and outstanding shares of capital stock of ASE: First Financial Alliance
Partners, Inc., Xxx X. Xxxxx, Xx., Xxx X. Xxxxx, III and Xxxx X. Xxxx (the "ASE
Shareholders"), (iii) Commodore Applied Technologies, Inc., a corporation
organized and existing under the laws of the State of Delaware ("Commodore"),
and (iv) CXI-ASE Acquisition Corp., a corporation organized and existing under
the laws of the State of Delaware ("CXI-ASE Acquisition Corp.").
R E C I T A L S:
WHEREAS, ASE, pursuant to a Letter of Intent dated June 20, 1996 (the
"Sciences Letter of Intent"), has an agreement with the shareholders (the
"Sciences Shareholders") of Advanced Sciences, Inc. ("Sciences") to acquire all
of the issued and outstanding shares of capital stock of Sciences; and
WHEREAS, Commodore, pursuant to a Letter of Intent dated July 12, 1996,
has an agreement with the ASE Shareholders to acquire all of the issued and
outstanding shares of capital stock of ASE and Sciences (the "ASE Letter of
Intent"); and
WHEREAS, the ASE Shareholders own all of the issued and outstanding
shares of capital stock of ASE and the Sciences Shareholders own all of the
issued and outstanding capital stock of Sciences; and
WHEREAS, Commodore, Sciences, the Sciences Shareholders, ASE and the
ASE Shareholders have agreed that, contrary to the terms of the Sciences Letter
of Intent and the ASE Letter of Intent, ASE will not acquire the capital stock
of Sciences; rather, Commodore will acquire directly the capital stock of each
of Sciences and ASE in separate but simultaneous and contingent transactions;
and
WHEREAS, Commodore owns all of the issued and outstanding shares of
capital stock of CXI-ASE Acquisition Corp.; and
WHEREAS, Commodore and CXI-ASI Acquisition Corp. have entered into an
Agreement and Plan of Merger with Sciences, the Sciences Shareholders, dated the
date of this Agreement, whereby CXI-ASI Acquisition Corp. will be merged with
and into Sciences (the "Sciences Merger Agreement"); and
WHEREAS, subject to the terms and conditions set forth in this
Agreement and in the Sciences Merger Agreement, Commodore, CXI-ASE Acquisition
Corp., ASE and the ASE Shareholders have agreed that CXI-ASE Acquisition Corp.
will be merged with and into ASE in a merger intended to qualify as a tax-free
reorganization under Section 368(a)(2)(E);
NOW, THEREFORE, in consideration of the recitals and of the mutual
covenants, agreements, representations and warranties contained herein, and
subject to the satisfaction or waiver of the conditions contained herein, the
parties, each intending to be legally bound hereby, agree as follows:
1. THE MERGER AND RELATED MATTERS.
1.1 Merger
A. Upon the terms and subject to the conditions of this
Agreement, CXI-ASE Acquisition Corp. shall be merged with and into ASE
(the "Merger") in accordance with the Delaware General Corporation Law
("DGCL"). ASE shall be the surviving corporation (the "Surviving
Corporation"). The Surviving Corporation shall continue its corporate
existence under, be organized under and be governed by the DGCL and
shall possess all the rights and assets of CXI-ASE Acquisition Corp.
and ASE and be subject to all of the liabilities and obligations of
CXI-ASE Acquisition Corp. and ASE in accordance with the provisions of
the DGCL.
B. The Merger shall be effective when a properly executed
Certificate of Merger (together with any other documents required to
effectuate the Merger) shall have been filed with the Secretary of
State of the State of Delaware in accordance with the provisions of the
DGCL, which filing shall be made as soon as practical after the
Closing, and the Secretary of State of the State of Delaware shall have
issued its Certificate of Merger in accordance with the provisions of
the DGCL (the "Effective Time"). The Merger shall have the effects set
forth in the DGCL.
C. The Certificate of Incorporation and the Bylaws of CXI-ASE
Acquisition Corp., as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation and Bylaws of the
Surviving Corporation until thereafter amended.
D. The directors and officers of CXI-ASE Acquisition Corp.
immediately prior to the Effective Time shall be the directors and
officers of the Surviving Corporation and will hold office from the
Effective Time until their respective successors are duly elected or
appointed.
1.2 Conversion of Stock.
A. At the Effective Time, by virtue of the Merger and without
any action on the part of the ASE Shareholders, each of the 1,000
shares of Common Stock of ASE
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which are owned by the ASE Shareholders as shown on Schedule 1.2A and
which are outstanding immediately prior to the Effective Time shall be
converted into the right to receive, upon surrender of the certificate
formerly representing such shares pursuant to Section 1.3, 450 shares
of Commodore Common Stock (the "ASE Merger Consideration") so that when
all outstanding shares of ASE is surrendered, a total of 450,000 shares
of Common Stock of Commodore will be issued in consideration therefore.
B. Each share of CXI-ASE Acquisition Corp. Common Stock
outstanding immediately prior to the Effective Time shall be converted
into one share of Common Stock of the Surviving Corporation.
1.3 Exchange. At the Closing, the ASE Shareholders shall surrender to
Commodore the certificates formerly representing all of the issued and
outstanding Common Stock of ASE. As of and after the Effective Time, the ASE
Shareholders shall not have any rights as holders of the Common Stock of the
Surviving Corporation other than to receive the ASE Merger Consideration.
2. CLOSING.
2.1 Closing. Subject to the provisions of Sections 6 and 7, the closing
("Closing") of the Merger shall take place on or before September 30, 1996, at
such place and time as the parties may mutually agree in writing. The date on
which the Closing occurs is sometimes hereinafter referred to as the "Closing
Date."
2.2 Deliveries at Closing. In addition to the exchange of stock
described in Section 1.3, the parties shall deliver an executed copy of the Plan
of Merger in the form of that attached hereto as Schedule 2.2 and the documents
and other items required pursuant to Sections 6 and 7.
3. REPRESENTATIONS AND WARRANTIES OF THE ASE SHAREHOLDERS.
As an inducement to Commodore and CXI-ASE Acquisition Corp. to enter
into this Agreement and consummate the transactions contemplated hereby, the ASE
Shareholders, jointly and severally, represent and warrant to Commodore and
CXI-ASE Acquisition Corp. that:
3.1 Organization, Standing and Qualification. ASE is a corporation duly
organized, validly existing and in good standing under the laws of Delaware; it
has the corporate power and lawful authority to own, lease and operate its
assets, properties, subsidiaries and business and to carry on its business, all
as now conducted.
3.2 Capitalization. The authorized capital stock of ASE consists of
10,000 shares of Common Stock, par value $.01 per share, of which 1,000 shares
are issued. All of such issued
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shares have been duly authorized and validly issued and are fully paid and
non-assessable and none of them were issued in violation of any preemptive or
other right. ASE is not a party to or bound by any contract, agreement or
arrangement to issue, sell or otherwise dispose of or redeem, purchase or
otherwise acquire any capital stock or any other security of ASE or any other
security exercisable or exchangeable for or convertible into any capital stock
or any other security of ASE, and, except for this Agreement, there is no
outstanding option, warrant or other right to subscribe for or purchase, or
contract, agreement or arrangement with respect to, any capital stock or any
other security of ASE or other security exercisable or convertible into any
capital stock or any other security of ASE.
3.3 Corporate Documents. The copies of the Certificate of Incorporation
of ASE and all amendments thereto to date, certified by the Secretary of State
of Delaware, and the By-Laws of ASE as amended to date, certified by the
Secretary of ASE, which have been or will be delivered to Commodore and CXI-ASE
Acquisition Corp., are complete and correct, and the minute books of ASE, which
the ASE Shareholders will make available to Commodore and CXI- ASE Acquisition
Corp. and their counsel prior to the Closing Date, correctly reflect all
corporate actions taken at the meetings reported therein and correctly record
all resolutions.
3.4 Ownership and Merger. The ASE Shareholders own the ASE Common Stock
beneficially and of record, free and clear of all liens of any nature. The ASE
Shareholders have the full right and power to consummate the Merger without
obtaining the consent of any other person or governmental authority. The Merger
is not subject to registration under applicable federal and state securities
laws.
3.5 No Violations; Consents. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
violate any provision of, or result in the breach of or accelerate or permit the
acceleration of the performance required by the terms of, any applicable law,
rule or regulation of any governmental body, the Certificate of Incorporation or
By-Laws of ASE, or any lease, bond, mortgage, note, loan agreement, credit
agreement or facility, indenture or any other material agreement to which any
ASE Shareholder or ASE is a party or by which they may be bound, or of any
order, judgment or decree applicable to it or them, or result in the creation of
any claim, lien, charge or encumbrance upon any of the property or assets of the
ASE Shareholders or ASE, or terminate or result in the termination of any such
agreement, or in any way affect or violate the terms or conditions of, or result
in the cancellation, modification, revocation, or suspension of, any of the
licenses, franchises, approvals, certificates, permits or authorization held by
ASE. No consent is required from any third party in order for any ASE
Shareholder to validly and lawfully perform his or its obligations hereunder.
3.6 No Operations, Etc. Since incorporation, ASE has conducted no
operations or business of any type whatsoever, except the negotiation and
execution of the Sciences Letter of Intent, the ASE Letter of Intent and this
Agreement. Except for the Sciences Letter of Intent, and the ASE Letter of
Intent, ASE: has no assets, has no equity investment in any entity and is not a
party to any loan or any other agreement of any type whatsoever, whether verbal
or
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written. ASE has no and since incorporation has never had any equipment,
liabilities, (contingent or otherwise), employees, employee benefits plans or
insurance agreements. ASE has established a bank account to which the ASE
Shareholders contributed $1,000, the balance of which will be withdrawn
immediately prior to the Effective Time; however, all costs and expenses
associated with the negotiation and execution of the Sciences Letter of Intent,
the ASE Letter of Intent and this Agreement have been and shall be borne by the
ASE Shareholders individually. ASE has not assigned or otherwise transferred its
rights under the Sciences Letter of Intent except pursuant to the ASE Letter of
Intent and this Agreement.
3.7 Litigation. ASE is not a party to, or to the knowledge of the ASE
Shareholders, threatened with, any litigation or judicial, administrative or
arbitration proceedings, or any unasserted claims reasonably possible of
assertion.
3.8 Brokers. No finder, broker, agent or similar intermediary has acted
for or on behalf of ASE in connection with this Agreement or the transactions
contemplated hereby, and no finder, broker, agent or similar intermediary is
entitled to any finder's, broker's or similar fee or other commission in
connection therewith based on any agreement, arrangement or understanding with
the ASE Shareholders or any action taken by ASE or the ASE Shareholders.
3.9 Disclosure. No representation, warranty or covenant by the ASE
Shareholders in this Agreement nor any Schedule, statement, list or certificate
furnished or to be furnished to Commodore and CXI-ASE Acquisition Corp. pursuant
thereto, or in connection with the transactions contemplated hereby, contain any
untrue statement of a material fact, or omit to state a material fact required
to be stated therein or necessary to make the statements contained therein not
misleading.
3.10 Governmental Authorizations and Regulations. No licenses,
franchises, permits and other governmental authorizations are necessary to
operate and to conduct its businesses.
3.11 Closing. At Closing, all of the representations and warranties
contained herein will be true and accurate.
4. REPRESENTATIONS AND WARRANTIES OF COMMODORE
AND CXI-ASE ACQUISITION CORP.
Each of Commodore and CXI-ASE Acquisition Corp., as applicable,
represents and warrants to the ASE Shareholders as follows:
4.1 Corporate Organization, Standing. It is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2 Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by Commodore and CXI-ASE Acquisition Corp.
and, subject to the due
5
authorization, execution and delivery by the other parties hereto, constitutes a
legal, valid and binding obligation of Commodore and CXI-ASE Acquisition Corp..
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the fulfillment and compliance with the
terms and conditions hereof do not and will not after the giving or notice, or
the lapse of time, or otherwise: (A) violate any provisions of any judicial or
administrative order, award, judgment or decree applicable to Commodore and
CXI-ASE Acquisition Corp., or (B) conflict with any of the provisions of the
Certificate of Incorporation or By-Laws of Commodore and CXI-ASE Acquisition
Corp., or (C) conflict with, result in a breach of or constitute a default under
any agreement or instrument to which Commodore or CXI-ASE Acquisition Corp. is a
party or by which it is bound.
4.3 Brokers. No finder, broker, agent or similar intermediary has acted
for or on behalf of Commodore or CXI-ASE Acquisition Corp. in connection with
this Agreement or the transactions contemplated hereby, and no finder, broker,
agent or similar intermediary is entitled to any finder's, broker's or similar
fee or other commission in connection therewith based on any agreement,
arrangement or understanding with Commodore or CXI-ASE Acquisition Corp. or any
action taken by Commodore or CXI-ASE Acquisition Corp..
4.4 Authorization for Commodore Common Stock. Except as set forth in
Section 7.6, Commodore has taken all necessary action to permit it to issue the
number of shares of Commodore Common Stock required to be issued pursuant to the
terms of this Agreement. The shares of Commodore Common Stock issued pursuant to
the terms of this Agreement will, when issued, be validly issued, fully paid and
nonassessable and will not be in violation of preemptive rights. The Commodore
Common Stock issuable pursuant to this Agreement will, when issued, be listed on
the AMEX.
4.5 SEC Documents. The Prospectus dated June 28, 1996 and related
documents filed by Commodore with the Securities and Exchange Commission, copies
of which have been delivered to the ASE Shareholders (the "SEC Documents"),
complied in all material respects with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations of the Commission promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a 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. The consolidated financial statements of Commodore included in the
SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of Commodore and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (except in the case of
interim period financial information, for normal year-end adjustments).
6
4.6 Tax Representations. Commodore, in order to assist ASE in achieving
a tax-free reorganization under Section 368(a) of the Code, hereby represents to
and covenants with the ASE Shareholders that:
A. Commodore has no present plan or present intention to cause
ASE, after the Merger, to issue any additional shares of ASE's stock
that would result in Commodore not being in control of ASE within the
meaning of Section 368(c) of the Code;
B. Commodore has no present plan or present intention to
liquidate ASE, to merge ASE into another corporation, to cause ASE to
sell or otherwise dispose of any of its assets, except for dispositions
made in the ordinary course of business, or to sell or otherwise
dispose of any of the target acquired from the ASE Shareholders in the
transaction, except for transfers described in Section 368(a)(2)(C) of
the Code;
C. Commodore has no present plan or present intention to
reacquire any of the Commodore Common Stock issued in connection with
the Merger;
D. The liabilities of CXI-ASE Acquisition Corp. assumed by ASE
pursuant to the Merger and the liabilities to which the transferred
assets of CXI-ASE Acquisition Corp. are subject were incurred by
CXI-ASE Acquisition Corp. in the ordinary course of its business;
E. Following the Merger, Commodore presently plans and intends
to cause ASE to continue its historic business or use a significant
portion of its historic business assets in a business; and
F. In all reports, returns, statements and other filings with
tax authorities, Commodore will and will cause ASE to report the Merger
as a reorganization described in Section 368(a) of the Code and will
not take any position inconsistent with such treatment.
5. COVENANTS OF THE ASE SHAREHOLDERS.
The ASE Shareholders covenant and agree with Commodore and CXI-ASE
Acquisition Corp. that they will perform, or will cause ASE to perform, the
following covenants between the date hereof and the Closing Date (which
covenants shall survive the Closing);
5.1 Access to Information and Corporate Records. The ASE Shareholders
shall cause ASE to provide Commodore and CXI-ASE Acquisition Corp. and their
counsel, accountants and other representatives full access during normal
business hours to all of the properties, books, accounts, records, contracts and
documents of and relating to ASE. The ASE Shareholders shall cause ASE to
furnish to Commodore and CXI-ASE Acquisition Corp. and their counsel,
7
accountants and other representatives all documents and other information
concerning the business, finances and properties of ASE which Commodore and
CXI-ASE Acquisition Corp. may reasonably request from time to time and hereby
authorizes and directs the accountants and auditors of ASE to make available to
Commodore and CXI-ASE Acquisition Corp. and their representatives all financial
information concerning ASE which is in its possession, including their work
papers. Nothing contained in this Section 5.1 shall in any way affect the
survival of the representations and warranties of the ASE Shareholders as is
hereinafter provided.
5.2 Corporate Matters. The ASE Shareholders shall not permit ASE to:
A. Amend its Certificate of Incorporation or By-Laws;
B. Issue any additional shares of its capital stock;
C. Issue or create any warrants, obligations, subscriptions,
options, convertible securities or other commitments for the issuance
of transfer of shares of its capital stock;
D. Enter into any merger, consolidation, reorganization or
recapitalization or reclassification or its stock other than as
necessary to perform this Agreement;
E. Declare or pay any dividend on or make any distribution in
respect of its capital stock;
F. Directly or indirectly purchase, redeem, or otherwise
acquire any shares of its capital stock; or
G. Agree to do any of the foregoing acts.
5.3 Conduct of Business. Between the date of this Agreement and the
Closing Date, except as otherwise permitted by the prior written consent of
Commodore and CXI-ASE Acquisition Corp., which will not be unreasonably withheld
or delayed, the ASE Shareholders agree that:
A. ASE will conduct its respective business and operations
only in the ordinary course, will maintain all of its properties and
assets in a manner consistent with prior practice and will perform all
material obligations under all agreements binding upon it;
B. ASE will not become a party to any agreement;
C. ASE will not enter into any compromise or settlement of any
litigation, proceeding or governmental investigation relating to it or
its properties or business and involving a payment of commitment by it
exceeding, in the aggregate, $10,000;
8
D. ASE will not borrow any money or incur or guarantee any
debt for borrowed money except in the ordinary course of business;
E. ASE will not lend any money or otherwise pledge the credit
of ASE except in the ordinary course of business; and
F. ASE will not knowingly fail in any material respect to
comply with any laws, ordinances, regulations or governmental
restrictions applicable to ASE.
5.4 Business Organization. The ASE Shareholders shall cause ASE to use
its best efforts, without making any commitments to Commodore and CXI-ASE
Acquisition Corp., to preserve its respective business organization intact, to
keep available to ASE the services of its present officers and members of the
Board of Directors and to preserve and maintain its present relationships with
suppliers, customers, lessors and others having business relationships with it.
6. CONDITIONS TO CLOSING - COMMODORE AND CXI-ASE
ACQUISITION CORP.
6.1 Representations and Warranties of the ASE Shareholders. The
representations and warranties (whether or not so captioned) of the ASE
Shareholders made in this Agreement or in any schedule, document or certificate
delivered to Commodore and CXI-ASE Acquisition Corp. pursuant hereto shall be
true and correct in all material respects on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date.
6.2 Covenants of the ASE Shareholders and ASE. The ASE Shareholders and
ASE shall each have fully performed and complied with all material covenants,
terms and agreements (whether or not so captioned) to be performed and complied
with by them on or before the Closing Date.
6.3 Good Standing. The ASE Shareholders shall have delivered to
Commodore and CXI-ASE Acquisition Corp. a good standing certificate as to ASE
issued by the Secretary of State of Delaware, dated as of a date within ten (10)
days of the Closing Date.
6.4 Proceedings and Instruments Satisfactory. All proceedings taken in
connection with the transactions contemplated hereby and all instruments and
documents incident thereto shall be satisfactory in form and substance to
Commodore and CXI-ASE Acquisition Corp. and their counsel.
6.5 Opinion of the ASE Shareholders' Counsel. Commodore and CXI-ASE
Acquisition Corp. shall have received an opinion of counsel for the ASE
Shareholders dated the Closing Date and in form acceptable to Commodore and
CXI-ASE Acquisition Corp..
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6.6 Access to Corporate Records, etc. Commodore and CXI-ASE Acquisition
Corp. and their counsel, auditors and other representatives shall have had free
access to the corporate and financial records, title deeds and other documents
of ASE and shall have obtained such information and assistance from the officers
and directors of ASE in connection with its investigations as Commodore and
CXI-ASE Acquisition Corp. or their counsel or other representatives shall have
reasonably requested.
6.7 No Adverse Change. No material adverse change shall have occurred
in the assets, liabilities, business, operations, properties, prospects or
condition (financial or otherwise) of ASE.
6.8 Absence of Litigation. No action, suit or proceeding arising out of
or related to this Agreement or the transactions contemplated hereby, shall have
been instituted or threatened against any party hereto or shall have become
reasonably possible of assertion against any party hereto before or by any
court, administrative agency or body or governmental authority or any
arbitration panel which in the sole discretion of Commodore and CXI-ASE
Acquisition Corp. renders it inadvisable to proceed with the consummation of
transactions contemplated by this Agreement.
6.9 Corporate Resolutions. The ASE Shareholders shall have delivered to
Commodore and CXI-ASE Acquisition Corp. fully executed resolutions of the ASE
Shareholders and directors of ASE, in proper form under the laws of Delaware,
authorizing the execution and delivery of this Agreement, the closing, and all
things reasonably incident thereto.
6.10 Inter Sese Release. Sciences, each of the Sciences Shareholders,
ASE and the ASE Shareholders, shall have made, executed and delivered to each
other a mutual release of all their respective claims, demands, suits, causes of
actions, damages and losses whatsoever, including those arising under the
Sciences Letter of Intent, or any preceding or subsequent oral or written
agreements.
6.11 Conditions to Sciences Merger Agreement. Each of the conditions to
the Sciences Merger Agreement shall have occurred prior to or on the Closing
Date.
6.12 Escrow Agreement. Each of the ASE Shareholders, the Sciences
Shareholders and Commodore shall have entered into an Escrow Agreement
substantially in the form attached hereto as Exhibit 6.12.
6.13 Consents. Any person or governmental authority whose consent is
necessary to consummate the merger shall have been obtained in a form and
substance satisfactory to Commodore and CXI-ASE Acquisition Corp. prior to or on
the Closing Date.
6.14 Resignations. The ASE Shareholders shall have delivered to
Commodore and CXI-ASE Acquisition Corp. the written resignation of all of the
officers and members of the Board of Directors of ASE and each of its
Subsidiaries except with respect to those whose
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continuing services Commodore and CXI-ASE Acquisition Corp. has expressly
agreed prior to Closing.
6.15 Commodore's and CXI-ASE Acquisition Corp.'s Merger Consideration.
The ASE Shareholders shall have delivered to Commodore and CXI-ASE Acquisition
Corp. certificates representing all 1,000 shares of outstanding ASE Common
Stock.
7. CONDITIONS OF CLOSING - THE ASE SHAREHOLDERS.
7.1 Representations and Warranties of Commodore and CXI-ASE Acquisition
Corp.. The representations and warranties (whether or not so captioned) of
Commodore and CXI-ASE Acquisition Corp. made in this Agreement or made by
Commodore and CXI-ASE Acquisition Corp. in any document or certificate delivered
to the ASE Shareholders pursuant hereto shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on and as of the
Closing Date.
7.2 Covenants of Commodore and CXI-ASE Acquisition Corp.. Commodore and
CXI-ASE Acquisition Corp. shall have fully performed and complied with all
material covenants, terms and agreements (whether or not so captioned) to be
performed and complied with by them on or before the Closing Date.
7.3 Corporate Resolutions. Commodore and CXI-ASE Acquisition Corp.
shall have delivered to the ASE Shareholders fully executed resolutions of their
respective shareholders and directors, in proper form under the laws of
Delaware, authorizing the execution and delivery of this Agreement, the Closing,
and all things reasonably incident thereto.
7.4 Non-Taxable Event. The Merger shall, in the opinion of the ASE
Shareholders, qualify as a tax-free reorganization under Section 368(a)(2)(E) of
the Internal Revenue Code of 1986.
7.5 Opinion of Counsel. The ASE Shareholders shall have received an
opinion of counsel to Commodore and CXI-ASE Acquisition Corp. in form acceptable
to the ASE Shareholders.
7.6 AMEX Listing. The Commodore Common Stock issued pursuant to this
Agreement shall have been listed on the AMEX subject to official notice of
issuance.
7.7 Material Adverse Effect. Except as disclosed in the SEC Documents,
since June 28, 1996, there shall not have been any material adverse change in
the business, assets, financial condition or prospects of Commodore and its
subsidiaries, taken as a whole.
11
7.8 Registration Rights Agreement. The ASE Shareholders and Commodore
shall have entered into a Registration Rights Agreement substantially in the
form attached hereto as Exhibit 7.8.
7.9 ASE Merger Consideration. Commodore shall have delivered to the ASE
Shareholders certificates representing the ASE Merger Consideration in the
amounts and to the individual ASE Shareholders described on Schedule 7.9
attached hereto.
8. TERMINATION PRIOR TO CLOSING.
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing:
A. By the mutual written consent of the parties hereto; or
B. By any of the parties hereto in writing if the Merger shall
not have been consummated on or before September 30, 1996, unless the
failure to consummate the Merger is the result of a default by the
party (with Commodore and CXI-ASE Acquisition Corp. collectively being
deemed a party and the ASE Shareholders being deemed a party) seeking
to terminate this Agreement; or
C. By Commodore in writing if the ASE Shareholders shall have
breached this Agreement in any material respect; or
D. By the ASE Shareholders in writing if Commodore or Newco I
shall have breached this Agreement in any material respect; or
E. By any of the parties hereto in writing if any court of
competent jurisdiction or any governmental entity shall have issued an
order, decree or ruling enjoining, restraining or otherwise prohibiting
the consummation of the Merger or shall have authorized the filing or
taking of any action seeking to enjoin, restrain or otherwise prohibit
the consummation of the Merger.
8.2 Effect on Obligations. Termination of this Agreement pursuant to
this Article 8 shall terminate all obligations of the parties hereunder;
provided, however, that termination pursuant to clauses (C) or (D) of Section
8.1 shall not relieve any breaching party from any liability to the other
parties hereto.
12
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
9.1 Commodore's Reliance.
A. The parties agree that, notwithstanding any right of
Commodore to fully investigate the affairs of ASE, and notwithstanding any
knowledge of facts determined or determinable by Commodore pursuant to such
investigation or right of investigation, Commodore has the right to rely fully
upon the representations and warranties of the ASE Shareholders and ASE, and on
the accuracy of any document, certificate or schedule annexed hereto or
delivered to Commodore pursuant hereto. Except as hereinafter set forth, all
such representations and warranties of the ASE Shareholders and ASE contained in
this Agreement or in any document, certificate or schedule annexed hereto or
delivered pursuant hereto, shall survive the execution and delivery of this
Agreement and the Closing hereunder for a period of 18 months from the Closing
Date.
B. The ASE Shareholders' liability arising under any
representation or warranty contained herein (whether or not so captioned) which
representation or warranty is alleged or proven to be fraudulently made shall
survive for a period of time coincidental with any applicable federal or state
statute of limitation for claims based on intentional misrepresentation, fraud,
securities fraud or similar federal or state law in connection with this
Agreement.
9.2 The ASE Shareholders' Reliance.
A. The parties agree that, notwithstanding any right of the
ASE Shareholders fully to investigate the affairs of Commodore and CXI-ASE
Acquisition Corp., and notwithstanding any knowledge of facts determined or
determinable by the ASE Shareholders pursuant to such investigation or right of
investigation, the ASE Shareholders have the right to rely fully upon the
representations and warranties of Commodore and CXI-ASE Acquisition Corp. and
their agents, servants, employees and representatives and on the accuracy of any
document, certificate or schedule annexed hereto or delivered to the ASE
Shareholders pursuant hereto. All such representations and warranties of
Commodore and CXI-ASE Acquisition Corp. and their agents, servants, employees
and representatives, contained in this Agreement or in any document, certificate
or schedule annexed hereto or delivered pursuant hereto, shall survive the
execution and delivery of this Agreement and the Closing hereunder for a period
of 18 months from the Closing Date.
B. Commodore's liability arising under any representation or
warranty contained herein (whether or not so captioned) which representation or
warranty is alleged or proven to be fraudulently made shall survive for a period
of time coincidental with any applicable federal or state statute of limitation
for claims based on intentional misrepresentation, fraud, securities fraud or
similar federal or state law in connection with this Agreement.
13
10. INDEMNIFICATION.
10.1 Obligation of the ASE Shareholders to Indemnify.
A. Subject to limitations set forth in Section 10.5 and
provided that Commodore is not in default of its obligations under this
Agreement, the ASE Shareholders shall indemnify, defend and hold harmless
Commodore, ASE, and their successors and assigns, from and against any and all
losses, liabilities, damages or deficiencies (including interest, penalties and
reasonable attorneys' fees) arising out of or due to any breach of any of the
representations, warranties, covenants or undertakings of the ASE Shareholders
contained in this Agreement or in any document, certificate or schedule annexed
hereto or delivered to Commodore pursuant to this Agreement.
B. In addition to the indemnity provided in paragraph A above,
subject to the limitations set forth in Section 10.5 and provided that Commodore
is not in default of its obligations under this Agreement, the ASE Shareholders,
severally and not jointly as against the Sciences Shareholders, shall indemnify
and hold harmless Commodore, Sciences and their successors and assigns, from and
against one-half of any and all losses, liabilities, damages or deficiencies
(including interest, penalties and reasonable attorneys' fees, but not including
the use by Sciences of its net operating loss carry forward or its deferred tax
asset to offset income resulting from any IRS tax audit) arising out or due to
any breach of any of the representations, warranties, covenants or undertakings
of the Sciences Shareholders contained in Sections 3.7- 3.23, 3.25-3.31 and 3.34
(as Section 3.34 applies to the foregoing sections) of the Sciences Merger
Agreement (the "Operations Representations") or in any document, certificate or
schedule annexed to the Sciences Merger Agreement or delivered to Commodore
pursuant to the Operations Representations. Without in any way limiting the
foregoing, the ASE Shareholders shall not be liable for any damages arising out
of or due to any breach of representations, warranties, covenants or
undertakings in Sections 3.1-3.6, 3.24, 3.32 and 3.33 of the Sciences Merger
Agreement.
10.2 Obligation of Commodore to Indemnify. Subject to limitations set
forth in Section 10.5 and provided that the ASE Shareholders are not in default
of their obligations under this Agreement, Commodore shall indemnify, defend and
hold harmless the ASE Shareholders from and against any and all losses,
liabilities, damages or deficiencies (including interest, penalties and
reasonable attorneys' fees) arising out of or due to a breach of any of the
representations, warranties, covenants or undertakings of Commodore or CXI-ASE
Acquisition Corp. contained in this Agreement (whether or not so captioned) or
in any document, certificate or schedule annexed hereto or delivered to the ASE
Shareholders pursuant to this Agreement.
10.3 Procedure. All claims for indemnification of payment under this
Article 10 shall be asserted and resolved as follows:
14
A. An indemnitee shall promptly give the indemnitor notice of
any matter which an indemnitee has determined has given or is likely to
give rise to a right of indemnification under this Agreement, stating
the amount of the loss, if known, and method of computation thereof,
all with reasonable particularity, and stating with particularity the
nature of such matter. Failure to provide prompt notice shall not
affect the right of the indemnitee to indemnification except to the
extent such failure shall have resulted in liability to the indemnitor
that could have been actually avoided had such notice been provided
within such required time period; provided that no notice of claim
shall be enforceable hereunder if it is not received by the indemnitor
prior to the expiration of the survival period set forth in Article 9
hereof.
B. The obligations and liabilities of an indemnitor under this
Article 10 with respect to losses arising from claims of any third
party that are subject to the indemnification provided for in this
Article 10 ("Third Party Claims") shall be governed by and contingent
upon the following additional terms and conditions: if an indemnitee
shall receive notice of any third party claim, the indemnitee shall
give the indemnitor prompt notice of such third party claim and the
indemnitor may, at its option, assume and control the defense of such
third party claim at the indemnitor's expense and through counsel of
the indemnitor's choice reasonably acceptable to indemnitee. In the
event the indemnitor assumes the defense against any such third party
claim as provided above, the indemnitee shall have the right to
participate at its own expense in the defense of such asserted
liability, shall cooperate with the indemnitor in such defense and will
attempt to make available on a reasonable basis to the indemnitor all
witnesses, pertinent records, materials and information in its
possession or under its control relating thereto as is reasonably
required by the indemnitor. In the event the indemnitor does not elect
to conduct the defense against any such third party claim, the
indemnitor shall cooperate with the indemnitee (and be entitled to
participate at is own cost) in such defense and attempt to make
available to it on a reasonable basis all such witnesses, records,
materials and information in its possession or under its control
relating thereto as is reasonably required by the indemnitee. The
indemnitor understands that if such third party claim results in an
obligation to indemnify hereunder, damages shall include all reasonable
costs and expenses of such defense. Except for the settlement of a
third party claim that involves payment of money only and for which the
indemnitee is totally indemnified by the indemnitor, no third party
claim may be settled without the written consent of the indemnitee,
which consent shall not be unreasonably withheld.
C. If the indemnitor shall object to a claim for indemnity
hereunder, a written notice of such objection setting forth in
reasonable detail the basis for such objection shall be promptly
provided to the indemnitee (which notice of objection as to any third
party claim may in effect be a "reservation of rights" notice neither
admitting nor denying an obligation to indemnify hereunder). The
parties shall attempt to resolve any dispute arising from the
indemnitor's objection to a claim for indemnity within 30 days of the
indemnitor's receipt of such claim, provided that if such dispute
cannot be so resolved, the party seeking indemnification may take any
action available at law or in
15
equity to resolve such claim and such dispute. If the claim objected to
shall thereafter be determined to have been a valid claim, damages
shall include interest at the prime rate as quoted from time to time by
CitiBank of New York (the "Prime Rate") from the date the claim is
first made by the indemnitee until fully paid.
D. No claims for indemnification may be made by any of the
parties if this Agreement terminates prior to Closing; provided,
however, this provision shall not prohibit a party from taking action
for any breach of this Agreement.
10.4 Adjustment of Liability. The amount which an indemnitee shall be
entitled to receive from an indemnitor with respect to a loss under this Article
10 shall be net of any insurance recovery by the indemnitee on account of such
loss from an unaffiliated party and the indemnitor shall be subrogated to the
rights of the indemnitee with respect to any such loss.
10.5 Limitation on Indemnification. There shall be no indemnification
recoverable against the ASE Shareholders under Section 10.1 or against Commodore
under Section 10.2 for any misrepresentation or breach of warranty (whether or
not so captioned) until the damages suffered by Commodore or the ASE
Shareholders, as the case may be, as a result thereof shall exceed $100,000 in
the aggregate and then only for damages in excess of such amount. The maximum
amount of damages that Commodore may recover against the ASE Shareholders or the
ASE Shareholders may recover against Commodore on account of indemnification for
all misrepresentations and breaches of warranties pursuant to Section 10.1 or
10.2, as the case may be, shall be the value of one-half of the ASE Merger
Consideration based on the average of the high and low prices of Commodore
Common Stock on the AMEX on the day prior to the Closing Date.
10.6 Payment.
A. Payment of any amounts due pursuant to this Article 10
shall be made within 30 days after notice is sent by the indemnitee or
as determined upon resolution of a dispute pursuant to Section 10.3(C)
hereof.
B. With respect to amounts due from the ASE Shareholders to
Commodore pursuant to Section 10.1 hereof, such indemnification claim
may be paid in shares of Commodore Common Stock or cash, at the option
of the ASE Shareholder. If the ASE Shareholder elects to make such
payment in shares of Commodore Common Stock (pursuant to the Escrow
Agreement referred to in Section 6.12 or otherwise), the value of such
shares for the purpose of determining the number of shares to be
delivered to Commodore shall be the greater of (i) the average of the
high and low prices of Commodore Common Stock on the AMEX on the
Closing Date and (ii) the average of the high and low prices of
Commodore Common Stock on the AMEX on the date that Commodore delivers
the notice of its indemnity claim to the ASE Shareholders.
16
10.7 Sole and Exclusive Remedy. The indemnification provisions of this
Article 10 are the sole and exclusive remedy of any party to this Agreement for
a breach of any representation, warranty or covenant contained herein or in the
Sciences Merger Agreement or for any matters relating to assets or otherwise
related to the transactions contemplated hereby or thereby, except in each case
with respect to any claim based on fraud in the inducement or a similar theory
(including, without limitation, claims based on Rule 10b-5 under the Securities
Exchange Act of 1934, as amended), and provided that nothing in this Agreement
shall preclude the ASE Shareholders from seeking any remedy otherwise available
to the ASE Shareholders as a shareholder of Commodore. Notwithstanding the
foregoing provisions of this Section 10.7, in no event shall the terms of
Section 10.1B (several indemnification for Operations Representations) be
construed to include an agreement by the ASE Shareholders to indemnify Commodore
in respect of any claim by Commodore of fraud in the inducement or any similar
theory against Sciences or the Sciences Shareholders.
11. MISCELLANEOUS.
11.1 Notices. All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to be duly given if delivered personally or sent by telefax or by
registered or certified mail (notices sent by telefax or mailed shall be deemed
to have been given on the date received), as follows (or to such other address
as any party shall designate by notice in writing to the others in accordance
herewith:
A. To the ASE Shareholders:
Xxx X. Xxxxx, III (representative of all ASE Shareholders)
000 X. Xxxx Xxx Xxxx
Xxxxxxx, XX 00000
With a copy to:
Xxxx X. Xxxx, Esquire
MAYOR, DAY, XXXXXXXX & XXXXXX
0000 Xxxxxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
B. To A.S. Environmental, Inc. (Before Closing):
A.S. Environmental, Inc.
000 X. Xxxx Xxx Xxxx
Xxxxxxx, XX 00000
17
To A.S. Environmental (After Closing)
A.S. Environmental, Inc.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
C. To Commodore Applied Technologies, Inc. or CXI-ASE Acquisition
Corp.:
Commodore Applied Technologies, Inc.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
11.2 Entire Agreement. This Agreement (including the Exhibits and
Schedules) contains the entire agreement among the parties with respect to the
Merger and related transactions and supersedes all prior arrangements or
understandings, written or oral, with respect thereto.
11.3 Amendments. Any term or condition of this Agreement may be amended
or modified in whole or in part at any time, to the extent authorized by
applicable law, by an agreement in writing, authorized and executed in the same
manner as this Agreement by the parties hereto.
11.4 Waivers; Remedies. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power of privilege
hereunder, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. Except as set forth
in Section 10.7, the rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies which any party may otherwise have at
law or in equity. The rights and remedies of any party arising out of or
otherwise in respect of any inaccuracy in or breach of any representation,
warranty, covenant or agreement contained in this Agreement shall in no way be
limited by the fact that the act, omission, occurrence or breach is based may
also be the subject matter of any other representation, warranty, covenant or
agreement contained in this Agreement (or in any other agreement between the
parties delivered in connection with the Merger) as to which there is no
inaccuracy or breach.
11.5 Execution and Delivery. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall
18
constitute one and the same instrument. Delivery of a counterpart shall be
deemed effective upon receipt by the other party of telefaxed signature page to
this Agreement, provided that such party shall nonetheless transmit its original
executed signature page to the other party.
11.6 Exhibits and Schedules. The Exhibits and Schedules and other
documents attached to or delivered herewith are hereby incorporated and made a
part of this Agreement as if set forth in full herein.
11.7 Drafting. No presumption shall operate in favor of or against any
party in the construction or interpretation of this Agreement as a consequence
of a party's responsibility for drafting this Agreement.
11.8 Recitals. The recital clauses of this Agreement are incorporated
herein to the body as though set forth at length.
11.9 Attorney and Professional Fees. Each party will pay his/her own
attorney or professional fees in connection with this Agreement discussions
leading to this Agreement.
11.10 Captions. The captions of Sections hereof are for convenience
only and shall not control or affect the meaning or construction of any of the
provisions of this Agreement.
11.11 Controlling Law. The parties hereto agree that this Agreement
shall be governed and construed by the internal, substantive laws of the State
of Delaware (without regard to that state's choice of law rules or doctrines)
and, if applicable, the substantive law (statutory, administrative or common
law) of the United States (without regard to its choice of law, rules or
doctrines).
11.12 Implementing Agreement. Subject to the other terms and conditions
of this Agreement, each of the parties hereto shall take all action required of
him or it to fulfill his or its obligations under this Agreement and shall
otherwise use his or its best efforts to consummate the transactions
contemplated hereby. Except as otherwise expressly permitted by this Agreement,
each of the parties hereto agrees that he or it will not take any action which
has the effect of preventing or impairing his or its performance of his or its
obligations under this Agreement.
19
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
duly executed this Agreement as of the date first written above.
Commodore Applied Technologies, Inc.
By:/s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
CXI-ASE Acquisition Corp., Inc.
By:/s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
A.S. Environmental, Inc.
By: /s/
-----------------------------------------
THE ASE SHAREHOLDERS:
(1)/s/ First Financial Alliance Partners
-----------------------------------------
First Financial Alliance Partners, Inc.
(2)/s/ Xxx X. Xxxxx, Xx.
-----------------------------------------
Xxx X. Xxxxx, Xx.
(3)/s/ Xxx X. Xxxxx, III
-----------------------------------------
Xxx X. Xxxxx, III
(4)/s/ Xxxx X. Xxxx
-----------------------------------------
Xxxx X. Xxxx
EXHIBITS AND SCHEDULES
Schedule 1.2A ASE Shareholders' Common Stock Ownership
Schedule 2.2 Plan of Merger
Schedule 7.9 ASE Merger Consideration
Exhibit 6.12 Escrow Agreement
Exhibit 7.8 Registration Rights Agreement
