Exhibit 10.9.2
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THIS INSTRUMENT AND THE OBLIGATIONS REPRESENTED THEREBY IS
SUBORDINATE IN ALL RESPECTS TO CERTAIN OBLIGATIONS OF CHEMPOWER,
INC. AND ITS SUBSIDIARIES TO FIRST NATIONAL BANK OF OHIO,
INCLUDING A PROMISSORY NOTE IN THE MAXIMUM PRINCIPAL AMOUNT OF
$15,700,000 DATED AS OF FEBRUARY 28, 1997.
FINANCING AGREEMENT
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THIS FINANCING AGREEMENT is made and entered into as of this
28th day of February, 1997 by and among AMERICAN ECO CORPORATION,
an Ontario, Canada corporation ("American Eco"), CHEMPOWER, INC.,
an Ohio corporation ("Chempower"), XXXXXX X. XXXX, and XXXX X.
ROCHESTER (jointly and severally, the "Principal Shareholders"),
and XXXXXX X. XXXX, AS AGENT FOR THE PRINCIPAL SHAREHOLDERS
(herein, together with his successors, referred to as the
"Agent"). Terms not otherwise defined herein shall have the
respective meanings set forth in the Merger Agreement, or, if so
stated, the Security Agreement or the Pledge Agreement (each as
defined herein).
W I T N E S S E T H:
WHEREAS, American Eco, Sub Acquisition Corp., an Ohio
corporation and a wholly-owned subsidiary of American Eco
("Merger Sub"), and Chempower entered into an Agreement and Plan
of Merger dated as of September 10, 1996 (the "Merger
Agreement"); and
WHEREAS, Chempower was the surviving corporation in the
merger contemplated by the Merger Agreement; and
WHEREAS, the Merger Agreement provides, inter alia., for
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conversion of certain common shares, $0.10 par value per share,
of Chempower ("Shares") into the right in the holder thereof to
receive the Merger Consideration (as defined in the Merger
Agreement), at the time and subject to the terms and conditions
of the Merger Agreement; and
WHEREAS, each of the Principal Shareholders holds Shares in
respect of which the Principal Shareholder would be entitled to
receive the Merger Consideration at the time and upon the
satisfaction of the conditions prescribed in the Merger
Agreement; and
WHEREAS, pursuant to a letter agreement dated January 15,
1997, the Principal Shareholders have agreed with American Eco
and Chempower to extend the time for payment of a portion of the
Merger Consideration on the terms hereinafter set forth, and, in
consideration of such agreements, American Eco and Chempower have
agreed to execute and deliver the promissory notes, grant the
security and undertake and agree to observe, satisfy and perform
the other conditions and covenants hereinafter set forth:
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each
of the parties hereto, the parties hereto hereby agree as
follows:
1. AGREEMENTS OF PRINCIPAL SHAREHOLDERS. Each of the
Principal Shareholders agrees, at the Closing and promptly
following the Effective Time of the Merger, and in exchange for
(a) payment in cash of $7,444,712 of the Merger Consideration
due, in the aggregate, to such Principal Shareholders and (b) the
execution and delivery of the instruments provided for in
Sections 2 and 3 hereof in accordance with the terms hereof, to
(x) surrender the Certificates representing the Shares held by
such Principal Shareholders to Chempower with the same effect as
if surrendered pursuant to Section 2.03 of the Merger Agreement
(other than the payment in cash of the Merger Consideration in
respect thereof from the Exchange Fund as therein provided) and
(y) accept the obligations undertaken and the security provided
by Chempower and American Eco herein and in such instruments in
lieu of the right to receive payment in cash from American Eco
and Merger Sub of the balance of such Merger Consideration at the
Closing.
2. DOCUMENTS AND INSTRUMENTS TO BE DELIVERED BY CHEMPOWER.
Chempower agrees, at the Closing, immediately following the
Effective Time of the Merger, and in consideration of the
agreements of the Principal Shareholders set forth in Section 1
above, to authorize, perform, execute and deliver the following:
(a) To the Exchange Agent, the Promissory Note in the
form and substance of Exhibit A hereto (the "Principal
Shareholders' Note"), which Principal Shareholders' Note,
together with a cash payment of $7,444,712 of the Merger
Consideration due, in the aggregate, to the Principal
Shareholders, will then be delivered to the Agent upon surrender
of the Certificates representing the Shares held by the Principal
Shareholders in accordance with the provisions of Section 2.03 of
the Merger Agreement;
(b) To the Agent:
(i) the Security Agreement in the form and substance
of Exhibit B hereto (the "Security Agreement"); and
(ii) any such other financing statements, mortgages,
leasehold assignments, and other collateral documents
required to grant and perfect liens on all assets of
Chempower and its Subsidiaries, as may be requested by the
Agent.
3. DOCUMENTS AND INSTRUMENTS TO BE DELIVERED BY AMERICAN
ECO. American Eco agrees, at the Closing, immediately following
the Effective Time of the Merger, and in consideration of the
agreements of the Principal Shareholders set forth in Section 1
above, to authorize, perform, execute and deliver to the Agent
the following:
(a) A Guaranty in the form and substance of Exhibit C
hereto (the "Principal Shareholders' Guaranty");
(b) A Pledge Agreement in the form and substance of
Exhibit D hereto (the "Pledge Agreement");
(c) Any share certificates, stock powers and/or other
instruments necessary to perfect the pledge of all Chempower
shares by American Eco, if so requested by the Agent; and
(d) An opinion of counsel for American Eco in form and
substance satisfactory to the Agent and the Principal
Shareholders and their counsel relating, inter alia., to the due
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authorization, legality and enforceability of the foregoing and
to the perfection of the liens provided for under the Pledge
Agreement;
4. REPRESENTATIONS AND WARRANTIES OF CHEMPOWER.
Chempower represents and warrants to the Agent and the
Principal Shareholders (which representations and warranties
shall survive the execution of this Agreement until the full and
final payment, performance, and observance of all of the
indebtedness and obligations provided for under this Agreement
and the instruments identified in Sections 2 and 3 above) that:
(a) ORGANIZATION. Chempower is a duly organized and
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validly existing corporation under the laws of the state of Ohio
and is duly qualified and in good standing in every state where,
because of the nature of is activities or properties, such
qualification is required and where the failure to be so
qualified would have a material adverse effect upon the business
or condition, financial or otherwise, of Chempower.
(b) AUTHORIZATION; VALIDITY. The execution, delivery,
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and performance of this Agreement and the documents and
instruments provided for in Section 2 hereof by Chempower are
within Chempower's corporate powers, have been duly authorized,
and are not in contravention of law or the terms of Chempower's
charter, by-laws, or regulations or of any agreement, indenture,
order, judgment, decree or undertaking to which Chempower is a
party or by which it is bound; this Agreement is, and each of the
documents and instruments identified in Section 2 above when
executed and delivered will be, legal, valid and binding
obligations of Chempower and enforceable against Chempower in
accordance with their respective terms, subject to bankruptcy,
insolvency, and other similar laws relating to or affecting the
enforceability of creditors rights generally and general
equitable principles (whether at a proceeding at law or in
equity): no consent, approval, or authorization of, or
registration or declaration with, any governmental authority or
other person is required in connection with the execution,
delivery and performance by Chempower of any of the documents and
instruments identified in Section 2 above.
(c) NO VIOLATION. The execution, delivery and
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performance by Chempower of this Agreement and the documents and
instruments identified in Section 2 above do not violate any
provision of law, statute or ordinance, or any rule or regulation
promulgated pursuant thereto.
(d) COMPLIANCE WITH LAWS. Chempower is in compliance
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with all laws, rules, regulations, court orders and decrees, and
orders of any governmental agency which are applicable to
Chempower, including environmental laws and all applicable
federal and state health and safety laws, regulations, ordinances
or rules, except to the extent that any non-compliance will not,
in the aggregate, have a materially adverse effect on Chempower
or the ability of Chempower to fulfill its obligations under this
Agreement.
(e) SOLVENCY. Chempower has received consideration
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which is the reasonable equivalent value of the obligations and
liabilities that Chempower has incurred hereunder and under the
Principal Shareholders' Note and the Security Agreement.
Chempower is and after the execution and delivery of this
Agreement and the Principal Shareholders' Note will be solvent.
Chempower is not engaged or about to engage in any business or
transaction for which the assets retained by it shall be an
unreasonably small capital, taking into consideration the
obligations incurred by it hereunder. Chempower does not intend
to, nor does it believe that it will, incur debts beyond its
ability to pay them as they mature.
Notwithstanding the representations and warranties of
Chempower set forth above, Chempower and American Eco shall have
no obligation or liability with respect to the breach or
inaccuracy of any representation or warranty of Chempower which
speaks as of or prior to the Closing and the Effective Time of
the Merger.
5. REPRESENTATIONS AND WARRANTIES OF AMERICAN ECO.
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American Eco represents and warrants to the Agent and the
Principal Shareholders (which representations and warranties
shall survive the execution of this Agreement until the full and
final payment, performance, and observance of all of the
indebtedness and obligations provided for under this Agreement
and the instruments identified in Sections 2 and 3 above) that:
(a) ORGANIZATION OF AMERICAN ECO. American Eco is a
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duly organized and validly existing corporation under the laws of
the Province of Ontario, Canada and is duly qualified and in good
standing in every state where, because of the nature of its
activities or properties, such qualification is required and
where the failure to be so qualified would have a material
adverse effect upon the business or condition, financial or
otherwise, of American Eco.
(b) AUTHORIZATION; VALIDITY. American Eco has full
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corporate power, authority, and legal right to own and operate
its respective properties and to carry on the business in which
it engages and currently intends to engage. The execution,
delivery, and performance of this Agreement, the Principal
Shareholders' Guaranty, and the Pledge Agreement are within
American Eco's corporate powers, have been duly authorized, and
are not in contravention of law or the terms of American Eco's
charter, bylaws, or regulations or of any agreement, indenture,
order, judgment, decree or undertaking to which American Eco is a
party or by which it is bound; this Agreement is, and each of the
Principal Shareholders' Guaranty and the Pledge Agreement when
executed and delivered will be, legal, valid and binding
obligations of American Eco and enforceable against American Eco
in accordance with their respective terms, subject to bankruptcy,
insolvency, and other similar laws relating to or affecting the
enforceability of creditors' rights generally and general
equitable principles (whether at a proceeding at law or in
equity); no consent, approval, or authorization of, or
registration or declaration with, any governmental authority or
other person is required in connection with the execution,
delivery and performance by American Eco of this Agreement, the
Principal Shareholders' Guaranty, and the Pledge Agreement.
(c) NO VIOLATION. The execution, delivery and
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performance by American Eco of this Agreement, the Principal
Shareholders' Guaranty and the Pledge Agreement do not violate
any provision of law, statute or ordinance, or any rule, order or
regulation promulgated pursuant thereto.
(d) FINANCIAL STATEMENTS. American Eco has furnished
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to the Agent financial data and reports concerning American Eco
as of and for the period ending November 30, 1996, including a
balance sheet (the "November 30 Balance Sheet"). This data is
complete and correct in all material respects (excluding the
treatment of certain costs and expenses relating to the
consummation of the Merger and the closing of the transactions
contemplated by this Agreement) and fairly presents the financial
condition of American Eco as of the date thereof.
(e) FINANCIAL CONDITION AT DATE OF AGREEMENT. As of
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the date of this Agreement, American Eco has no material amount
of liabilities, contingent or otherwise, required to be reflected
in accordance with generally accepted accounting principles
("GAAP"), which are not reflected in the November 30 Balance
Sheet, other than those liabilities arising in the ordinary
course of business and such other liabilities as have been
previously disclosed to the Agent and/or the Principal
Shareholders in writing. As of the date of this Agreement,
American Eco has no outstanding or existing commitments for the
purchase of land, buildings, equipment, materials, or supplies,
or any contracts for services except for those made in the
ordinary course of business.
(f) NO ADVERSE CHANGES. Since November 30, 1996, there
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has been no material adverse change in the condition, financial
or otherwise, of American Eco, and the business, operations, and
properties of American Eco have not been substantially and
adversely affected in any way as a result of any fire, explosion,
earthquake, accident, labor disturbance, requisition or taking of
property by any governmental authority, flood, riot, or act of
God.
(g) LITIGATION. There is no pending or, to the
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knowledge of American Eco, threatened action, suit or proceeding
before any court or other governmental authority or any
arbitrator against American Eco that may materially and adversely
impair the ability of American Eco to perform its obligations
under this Agreement, the Principal Shareholders' Guaranty, and
the Pledge Agreement.
(h) COMPLIANCE WITH LAWS. American Eco is in
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compliance with all laws, rules, regulations, court orders and
decrees, and orders of any governmental agency which are
applicable to American Eco, including environmental laws and all
applicable federal and state health and safety laws, regulations,
ordinances or rules, except to the extent that any non-compliance
will not, in the aggregate, have a materially adverse effect on
American Eco or the ability of American Eco to fulfill its
obligations under this Agreement, the Principal Shareholders'
Guaranty, and the Pledge Agreement.
(i) SOLVENCY. American Eco has received consideration
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which is the reasonable equivalent value of the obligations and
liabilities that American Eco has undertaken under this
Agreement, the Principal Shareholders' Guaranty, and the Pledge
Agreement. American Eco is now, and after the execution and
delivery of the this Agreement, the Principal Shareholders'
Guaranty, and the Pledge Agreement will be solvent. American Eco
is not engaged or about to engage in any business or transaction
for which the assets retained by it shall be an unreasonably
small capital, taking into consideration the obligations incurred
by it hereunder. American Eco does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay them
as they mature.
(j) COMPLIANCE WITH OTHER INSTRUMENTS. American Eco is
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not in default in the performance, observance, or fulfillment of
any of the material obligations, covenants, or conditions
contained in (i) any evidence of indebtedness for borrowed money
or (ii) any lease or other instrument. Neither the execution and
delivery of this Agreement, the Principal Shareholders' Guaranty,
or the Pledge Agreement, nor the consummation of the transactions
contemplated thereby, nor compliance with the terms and
provisions thereof will violate in any material respect the
provisions of any material permit or license, or conflict with or
result in a breach of, in any material respect, any of the terms,
conditions or provisions of any restriction or of any agreement
or instrument to which American Eco is now a party; nor will such
compliance constitute a default thereunder or result in the
creation or imposition of any lien, charge, or encumbrance of any
nature whatsoever upon any of the properties or assets of
American Eco other than as provided in the Pledge Agreement.
(k) MATERIAL RESTRICTIONS. American Eco is not a
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party to any agreement or other instrument or subject to any
other restriction which materially adversely affects its
business, properties (as a whole), assets (as a whole),
operations, or conditions, financial or otherwise.
(l) CORRECTNESS OF DATA FURNISHED. Except as
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otherwise specifically qualified elsewhere in this Agreement or
the Disclosure Schedule or Exhibits attached hereto, the
Agreement, the Disclosure Schedule, and the Exhibits hereto,
taken as a whole, are true and correct in all material respects;
and to the knowledge of American Eco, the matters disclosed in
the Agreement and the Disclosure Schedule and Exhibits attached
hereto, taken as a whole, set forth all material facts which
specifically affect American Eco's business, properties or
condition (financial or otherwise).
6. AFFIRMATIVE COVENANTS OF CHEMPOWER.
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Chempower undertakes, covenants, and agrees that, until the
full and complete payment, performance, and observance of
Chempower's obligations under this Agreement, the Principal
Shareholders' Note, and the Security Agreement:
(a) PAYMENT OF AMOUNTS DUE. Chempower will make all
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payments of the principal of and interest on the Principal
Shareholders' Note promptly as the same become due.
(b) CONDUCT OF BUSINESS IN THE ORDINARY COURSE.
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Chempower shall conduct its business and that of its Subsidiaries
only in the regular and ordinary course of business, consistent
with past practice and shall use all reasonable efforts to (i)
preserve intact its business, (ii) keep available the services of
its current officers and employees, or their duly appointed
successors, and (iii) preserve its relationships with desirable
customers, suppliers, licensors, licensees, distributors and
others having business dealings with it. Chempower will cause to
be done all things necessary to preserve and to keep in full
force and effect its existence and rights and those of its
Subsidiaries and will conduct its business in a prudent manner.
(c) BOARD OF DIRECTORS. Chempower shall take any and
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all action necessary to ensure that the Board of Directors of
Chempower, following the Effective Time of the Merger and until
Chempower's obligations under this Agreement, the Principal
Shareholders' Note, and the Security Agreement have been paid,
performed and otherwise observed in full, consists of three
directors, two of whom shall be designated by the Principal
Shareholders and one of whom will be designated by American Eco.
(d) QUARTERLY FINANCIAL STATEMENTS. Chempower shall
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deliver to the Agent within forty-five (45) days after the close
of each fiscal quarter, a balance sheet as at the end of such
quarter, an income and expense statement for such quarter, each
prepared in accordance with GAAP (except as otherwise provided
herein and except that the Agent acknowledges that such financial
statements are subject to normal year-end adjustments and are
without footnotes), and a statement that after reasonable,
diligent inquiry no Event of Default (as defined herein) exists,
or if an Event of Default does exist, specifying the nature
thereof. Notwithstanding the foregoing, as long as the loan to be
obtained by Chempower from First National Bank of Ohio pursuant
to the Loan Agreement, by and between Chempower and First
National Bank of Ohio, dated February 28, 1997, remains
outstanding, the provision to the Agent of the financial
statements required to be delivered to First National Bank of
Ohio in connection with such Loan Agreement shall be deemed to
satisfy the requirements of this Section 6(d).
(e) COMPLIANCE WITH LAWS. Chempower will comply and
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will cause its Subsidiaries to comply, in all material respects
with all federal, state, and local laws and regulations material
to its business now in effect or hereafter promulgated by any
properly constituted governmental authority having jurisdiction.
(f) MAINTENANCE OF PROPERTIES. Chempower will at all
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times maintain, preserve, protect, and keep its properties and
those of its Subsidiaries used in the conduct of its business in
good repair, working order, and condition, ordinary wear and tear
excepted, and, from time to time, make all needful and proper
repairs, renewals, replacements, betterments, and improvements
thereto, so that the business carried on in connection therewith
may be properly conducted at all times.
(g) PAYMENT OF TAXES, ETC. Chempower will pay and
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discharge, and will cause its Subsidiaries to pay and discharge,
all lawful taxes, assessments, and governmental charges or levies
imposed upon it or them, or upon its or their income or profits,
or upon any of its or their properties, before the same shall
become in default, as well as all lawful claims for labor,
materials, and supplies which, if unpaid, might become a lien or
charge upon such properties or any part thereof; provided,
however, Chempower shall not be required to pay and discharge any
such tax, assessment, charge, levy, or claim so long as the
validity thereof shall be contested in good faith by appropriate
proceedings and there shall be set aside such reserves with
respect thereto as are required by GAAP. Chempower will in all
events pay such tax, assessment, charge, levy or claim before the
property subject thereto shall be sold to satisfy any lien which
has attached as security therefor.
(h) ACCESS TO INFORMATION. Chempower shall afford the
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Agent and the Agent's accountants, counsel and other
representatives, full access, during normal business hours at all
times prior to the full and complete payment, performance, and
observance of Chempower's obligations under this Agreement, the
Principal Shareholders' Note, and the Security Agreement, to all
of the properties, books, contracts, commitments and records of
Chempower and its Subsidiaries.
(i) NOTIFICATION OF CERTAIN EVENTS. Chempower
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covenants and agrees to give prompt written notice to the Agent
of (i) the occurrence (or non-occurrence) of any event the
occurrence (or nonoccurrence) of which would be likely to cause
(A) any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect or (B) any
covenant, agreement or condition in this Agreement not to be
complied with or satisfied in any material respect; (ii) any
failure by Chempower to comply with or satisfy any covenant,
agreement or condition contained in this Agreement in any
material respect; and (iii) any litigation, legal proceeding or
threat of legal proceeding involving Chempower and/or any of its
Subsidiaries that may materially and adversely impair the ability
of Chempower to perform its obligations under the Principal
Shareholders' Note.
(j) FURTHER ASSURANCES. Chempower agrees to execute
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and deliver to the Agent, any agreements, documents and
instruments, including, without limitation, another Principal
Shareholders' Note as a replacement or substitution (subject to a
satisfactory affidavit of loss) as may be required by the Agent,
and to take such other actions as reasonably requested by the
Agent to effect the transactions contemplated hereby.
7. NEGATIVE COVENANTS OF CHEMPOWER.
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Chempower undertakes, covenants, and agrees that, until the
full and complete payment, performance, and observance of
Chempower's obligations under this Agreement, the Principal
Shareholders' Note, and the Security Agreement, unless it has
obtained the prior written consent of the Agent:
(a) CAPITAL STOCK. Chempower shall not (i) adjust,
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split, combine or reclassify any shares of capital stock; (ii)
make, declare, set aside or pay any dividend or make any other
distribution on, or directly or indirectly issue, sell, pledge,
grant, redeem, repurchase or otherwise acquire, any shares of its
or any Subsidiary's capital stock, any securities or obligations
convertible into or exchangeable for any shares of its or any
Subsidiary's capital stock, or any options, warrants or other
rights to acquire any shares of its or any Subsidiary's capital
stock except the issuance of stock pursuant to the exercise of
employee stock options outstanding on the date hereof; or (iii)
grant any stock option or appreciation rights or other rights to
share in the equity value of Chempower or any Subsidiary;
(b) CONTRACTS; LEASES OF REAL PROPERTY. Chempower
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shall not, except in the ordinary course of business, (i) make or
enter into any agreement, commitment or contract giving rise to
obligations extending beyond 90 days from the date hereof, or
modify, amend or terminate any material contract (other than as
required by the terms thereof), or pay any amount not required by
law or by any contract; or (ii) make or enter into any lease of
real property or extend or amend any existing lease of real
property;
(c) MERGERS; CONSOLIDATIONS. Chempower shall not
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dissolve or liquidate, or consolidate with or merge with or into
any person, firm, corporation or entity or otherwise effect any
business combination with any person, firm, corporation or
entity; nor shall Chempower approve any such dissolution,
liquidation, consolidation, or merger with respect to any of its
Subsidiaries.
(d) PURCHASES OR TRANSFERS OF ASSETS; LIMITATION ON
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INDEBTEDNESS. Chempower shall not (i) acquire, sell, lease,
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encumber, transfer or dispose of any assets, including the stock
of any Subsidiary, or make any capital expenditures, except in
the ordinary course of business or pursuant to obligations in
effect on the date hereof; (ii) purchase the capital stock of any
other person; or (iii) incur any indebtedness for borrowed money
or guarantee any indebtedness or issue or sell securities or
warrants or rights to acquire any debt securities or guarantee
(or become liable for) any debt of others or make any loans,
advances or capital contributions or mortgage, pledge or
otherwise encumber any assets or create or suffer any material
lien thereupon, except for (x) the security interests granted
under the Security Agreement or (y) indebtedness which has been
approved by the Board of Directors of Chempower with the
affirmative vote of both Xxxxxx X. Xxxx and Xxxxxx X. Rochester,
by Xxxxxx X. Xxxx in his capacity as an officer of Chempower, or
by the Agent;
(e) MAINTENANCE OF INSURANCE. Subject to the exercise
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of reasonable business judgment, Chempower shall not cancel or
otherwise take any action reasonably likely to result in the
termination of any insurance policies currently in existence
insuring the assets or properties of, or providing coverage
against liabilities of, Chempower, any of its Subsidiaries, or
the businesses conducted by them.
(f) SATISFACTION OF CLAIMS. Chempower shall not pay,
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discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unassorted, contingent or
otherwise), other than any payment, discharge or satisfaction (i)
in the ordinary course of business consistent with past practice,
or (ii) in accordance with their terms, of liabilities reflected
or reserved against in, or contemplated by, the financial
statements (or the notes thereto) of Chempower for the fiscal
year ended December 31, 1996. Notwithstanding the preceding
sentence, however, Chempower shall not pay, discharge or satisfy
any claims, liabilities or obligations in connection with the
litigation and claims listed on Schedule 3.15 to the Merger
Agreement, other than attorneys' fees and other expenses of
defending such actions, final non-appealable judgments, and
appeal bonds relating to appealable judgments, it being
understood and agreed that Chempower shall keep the Agent fully
informed of all material developments in connection with such
claims and litigation;
(g) LIMITATION ON INVESTMENTS. Chempower will not
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purchase or otherwise acquire or make any investment, except for
(i) investments existing on the date of this Agreement but
without any increase therein (no increase in an investment shall
be deemed to have occurred solely by reason of an increase in the
fair market value of such investment or increases in the net
worth in the person that is the subject of the investment
resulting from earnings of such person), or (ii) investments in
the ordinary course of business.
(h) PARTNERSHIPS AND JOINT VENTURES. Chempower shall
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not, and will not permit any Subsidiary to, act or participate as
a general or limited partner in any partnership or a joint
venturer in any joint venture, except such joint ventures or
partnerships in which Chempower is participating as of the date
of this Agreement.
(i) TRANSACTIONS WITH AFFILIATES OR SHAREHOLDERS.
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Chempower shall not engage in any transaction with any affiliate
or shareholder, unless (i) such transaction is at arms length and
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on terms that are at least as favorable to Chempower as those
prevailing at the time for comparable transactions with
nonaffiliated persons; and (ii) in any event, such transaction
does not require Chempower to make payments, advances, or loans
to any affiliate or shareholder in an amount exceeding $25,000.
(j) EMPLOYEE BENEFITS. Except as required by law or
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contemplated by this Agreement, Chempower shall not, subject to
its reasonable business judgment, (i) enter into, adopt, amend or
terminate any employee benefit plan or any agreement,
arrangement, plan or policy between Chempower and one or more of
its directors, officers, or employees; (ii) increase in any
manner the compensation or fringe benefits of any director,
officer or employee; (iii) grant any bonus to any of its
executive officers or pay any termination, severance or other
benefit not required by any plan and arrangement as in effect on
the date hereof; or (iv) with respect to any employee benefit
plans subject to the requirements of ERISA, take any actions
which do not comply with such requirements or which may result in
a tax, penalty or other liability under Section 4975 of the Code,
Section 502(i), or any other provision, of ERISA.
(k) EMPLOYMENT AGREEMENTS. Chempower shall not, by
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action of its officers, directors, or shareholder (acting either
in its capacity as the sole shareholder of Chempower or as a
party to such agreements), (i) terminate the Employment
Agreements between each of Xxxxxx X. Xxxx and Xxxxxx X. Rochester
and Chempower and American Eco, entered into in connection with
the Merger, except for "cause" (as defined in such Employment
Agreement); (ii) take any action with the intention of (or which
it reasonably believes may have the effect of) causing either Xx.
Xxxx or Mr. Rochester to terminate such agreement; or (iii)
constructively discharge either Xx. Xxxx or Mr. Rochester from
the position or responsibilities of his employment as described
in his Employment Agreement, or materially hinder or impede
either of them in the performance of such responsibilities.
(l) VIOLATION OF LAWS. Chempower shall not violate, or
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use any Collateral (as defined in the Security Agreement) in
violation of, any applicable material statute, ordinance, or
regulation, including, in each case, Environmental Laws.
(m) ENVIRONMENTAL COMPLIANCE. Chempower will conduct
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its business in material compliance with all environmental laws,
regulations, and permits, except to the extent that compliance is
being contested in good faith by appropriate proceedings and
reserves are established or other appropriate provisions made
therefor in accordance with GAAP (to the extent such reserves or
provisions are required in accordance with GAAP);
(n) CHANGE IN LOCATIONS. Except for changes resulting
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from sales of Inventory (as defined in the Security Agreement) in
the ordinary course of Chempower's business, Chempower shall not
make any change in any location where Chempower's Inventory or
Equipment (as defined in the Security Agreement) is maintained or
any change in the location of the office where Chempower's
records pertaining to its accounts and contract rights are kept;
(o) CHANGES IN ORGANIZATIONAL DOCUMENTS. Chempower
-----------------------------------
shall not make any changes in the Articles of Incorporation, Code
of Regulations or By-laws, as amended to date, of Chempower or
any Subsidiary, except as contemplated hereby;
(p) CHANGES IN ACCOUNTING PRINCIPLES. Chempower shall
--------------------------------
not change any of the accounting principles or practices used by
it (except as required by GAAP or Canadian generally accepted
accounting principles, or as a result of its consolidation for
financial reporting purposes with American Eco);
(q) TAXES. Chempower shall not, subject to its
-----
reasonable business judgment, make any material tax election or
settle or compromise any material federal, state, local or
foreign income tax liability, or waive or extend the statute of
limitations in respect of any such taxes; and
(r) OTHER ACTIONS. Chempower shall not agree to, or
-------------
make any commitment to take any of the actions prohibited by this
Section 7; or take any action, or agree or commit to take any
action that would make any representation or warranty of
Chempower hereunder inaccurate in any material respect at, or as
of any time prior to the full and final payment, performance, and
observance of all of the indebtedness and obligations provided
for under this Agreement and the instruments identified in
Sections 2 and 3 above, or omit or agree or commit to omit to
take any action necessary to prevent any such representation or
warranty from being inaccurate in any material respect at any
such time.
8. COVENANTS OF AMERICAN ECO.
-------------------------
American Eco undertakes, covenants, and agrees that, until
the full and complete payment, performance, and observance of all
of American Eco's obligations under this Agreement, the Principal
Shareholders' Guaranty, and the Pledge Agreement:
(a) PAYMENT OF AMOUNTS DUE. In the event that
----------------------
Chempower fails to make any payments of the principal of and/or
interest on the Principal Shareholders' Note promptly as the same
become due, American Eco will make such payments to the Agent in
accordance with the terms of the Principal Shareholders'
Guaranty. American Eco shall wire to Chempower any amount payable
with respect to interest on the Principal Shareholders' Note at
least one (1) day prior to the date upon which such interest
shall become due and payable by Chempower. If American Eco fails
to make any of the payments provided for above, the Agent may
exercise any and all of its rights under the Pledge Agreement,
and the Security Agreement. Further, the rights of American Eco
and its affiliates to payment of any amounts that may from time
to time be owed to them or any of them by Chempower or its
subsidiaries (any such amounts, the "Intercompany Debt") shall be
subordinate in right of payment to the prior payment in full of
the entire principal amount of and all accrued but unpaid
interest on the Principal Shareholders' Note, and all other
amounts due and owing under or in connection with this Agreement
or the instruments identified in Sections 2 and 3 hereof
delivered in connection herewith; provided that, so long as no
Event of Default, or an event which with notice or passage of
time or both would constitute an Event of Default hereunder, has
occurred and is continuing, any Intercompany Debt that is
otherwise permitted by the terms of this Agreement may be paid in
the ordinary course.
(b) BOARD OF DIRECTORS. One designee of the Principal
------------------
Shareholders, who shall initially be Xxxxxx X. Rochester, will
have the right to attend all meetings of the Board of Directors
and any committees thereof as an observer until such time as the
obligations of Chempower under the Principal Shareholders' Note
are paid in full.
(c) MANAGEMENT OF CHEMPOWER. (i) American Eco shall
-----------------------
permit the Agent, through the officers and directors of
Chempower, to operate and otherwise conduct the business of
Chempower under and at the exclusive control, direction, and
discretion of the Agent; further, American Eco agrees not to take
any action to interfere with the meaningful exercise of such
control, direction, or discretion by the Agent?
(ii) The Agent, on the other hand, agrees that, in
the operation and conduct of Chempower's business, he shall
not take, or omit to take, as the case may be, any action to
(x) alter Chempower's equity structure or (y) cause
Chempower to enter into any material transactions not in the
ordinary course of business or to sell all or substantially
all of its assets, consolidate with or merge with or into
any person, firm, corporation or entity, or otherwise effect
any business combination with any person, firm, corporation
or entity, without the consent of American Eco; provided,
--------
however, that nothing provided for in this paragraph shall
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limit in any way the Agent's rights under this Agreement or
under the instruments identified in Sections 2 and 3 hereof
and executed in connection herewith, in the event of an
Event of Default hereunder.
(d) OTHER ACTIONS. American Eco shall not:
-------------
(i) take any action to cause or which may result in
Chempower (A) failing to take the actions which it has
agreed to take pursuant to Section 6 of this Agreement or
(B) taking any actions which it has agreed not to take
pursuant to Section 7 of this Agreement;
(ii) charge or otherwise impose any obligation upon
Chempower to make payments for overhead, management fees or
expenses, or similar expenses of American Eco which American
Eco may deem attributable to Chempower or the conduct of its
business;
(iii) agree to, or make any commitment to take any of
the actions prohibited by this Section 8; or
(iv) take any action, or agree or commit to take any
action that would make any representation or warranty of
American Eco or Chempower hereunder inaccurate in any
material respect at, or as of any time prior to the full and
final payment, performance, and observance of all of the
indebtedness and obligations provided for under this
Agreement and the instruments identified in Sections 2 and 3
above, or omit or agree or commit to omit to take any action
necessary to prevent any such representation or warranty
from being inaccurate in any material respect at any such
time.
9. DEFAULTS AND REMEDIES.
The occurrence of any one or more of the following shall
constitute an Event of Default under this Agreement (provided
that, with respect to the events identified in paragraphs (c),
(d), (e), (f), (g), (i), and (k), such none of such events shall
constitute an Event of Default unless such event has not been
cured within ten (10) days following delivery by the Agent to
American Eco of written notice of such Event of Default):
(a) Default shall be made in the payment of any
principal on the Principal Shareholders' Note when and as the
same shall become due and payable, whether at maturity or
otherwise;
(b) Default shall be made in the payment of any
interest on the Principal Shareholders' Note when and as the same
shall become due and payable (provided that such Event of Default
has not been cured within five (5) days following delivery by the
Agent to American Eco of written notice of such Event of
Default);
(c) Failure by Chempower to observe or perform any
covenant or obligation of Chempower under this Agreement and/or
the Security Agreement or, except as provided in the last clause
of Section 4 hereof, any representation or warranty of Chempower
set forth in this Agreement or in the Security Agreement shall
have been untrue or incomplete in any material respect when made;
(d) Failure by American Eco to perform any of its
obligations under the Principal Shareholders' Guaranty in full
when due;
(e) Failure by American Eco to observe or perform any
covenant or obligation of American Eco under this Agreement
and/or the Pledge Agreement or any representation or warranty of
American Eco set forth in this Agreement or in the Pledge
Agreement shall have been untrue or incomplete in any material
respect when made;
(f) Failure by either Chempower or American Eco to
observe or comply with any agreement or obligation set forth or
provided for in any collateral security document or other
document, instrument or agreement delivered by either or both of
them in connection with the transactions herein provided or any
representation or warranty of either or both Chempower or
American Eco set forth in any such document shall have been
untrue or incomplete in any material respect when made; or
(g) Failure by either Chempower or American Eco to
observe or comply with any material agreement or obligation set
forth or provided for in either the Employment Agreement or the
Non-Competition Agreement with either Xxxxxx X. Xxxx or Xxxxxx X.
Rochester, unless such failure follows a material breach by
either of Messrs. Kukk or Rochester of their obligations under
such agreements; or
(h) Default in an amount in excess of $300,000 in
respect of any other indebtedness of Chempower or American Eco,
which default continues beyond any applicable grace period or
cure period; or
(i) If any of the following events occur: (i) any
Benefit Plan incurs a material "accumulated funding deficiency"
(as such term is defined in ERISA) whether waived or not, (ii)
Chempower or any affiliate engages in a material "prohibited
transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code), (iii) subject to Chempower's
reasonable business judgment, any Benefit Plan is terminated or
partially terminated, (iv) a trustee is appointed by an
appropriate United States district court to administer any
Benefit Plan, or (v) the Pension Benefit Guaranty Corporation
institutes proceedings to terminate any Benefit Plan or to
appoint a trustee to administer any Benefit Plan; or
(j) Any of the following events evidencing the
financial difficulties of either or both of Chempower or American
Eco shall occur: (i) any admission in writing of inability to pay
debts as they become due or the failure to pay debts generally as
such debts become due; or (ii) the entry of an order for relief
in the name of either or both of Chempower or American Eco under
Title 11 of the United States Code or similar provisions of
foreign law; or (iii) either or both of Chempower or American Eco
shall make an assignment for the benefit of creditors; or (iv)
Chempower or American Eco shall consent to the appointment of a
trustee or receiver for all or a major part of its property; or
(v) the commencement of a case by Chempower or American Eco under
Title 11 of the United States Code or similar provisions of
foreign law; or (vi) the commencement of a case under Title 11 of
the United States Code or similar provisions of foreign law
against Chempower or American Eco or any subsidiary thereof,
which case shall not be dismissed, vacated, denied, set aside, or
stayed within 30 days from the date of commencement; or (vii) the
entry of a court order appointing a receiver or a trustee for all
or a major part of Chempower or American Eco's property without
consent, which order shall not be dismissed, vacated, denied, set
aside, or stayed within 60 calendar days from the date of entry;
or (viii) the entry of a judgment or judgments for the payment of
money aggregating in excess of $300,000 against Chempower or
American Eco, and the same shall not be satisfied and discharged
within 90 calendar days from the date of entry thereof or an
appeal or other proceeding for the review thereof shall not be
taken within the period allowed to take such appeal and a stay of
execution pending such appeal shall not be obtained; or
(k) a material adverse change in the business,
operations, management, or financial condition of Chempower or
American Eco that would impair its ability to comply with and
perform its obligations under, with respect to Chempower, this
Agreement, the Principal Shareholders' Note, or the Security
Agreement, or, with respect to American Eco, this Agreement, the
Principal Shareholders' Guaranty, or the Pledge Agreement, as
determined by the Agent in good faith, shall have occurred; or
(l) any court or administrative or regulatory agency
shall have issued an injunction or order that materially
restricts or enjoins Chempower or American Eco from conducting
any material part of its business as now conducted.
Notwithstanding paragraphs (c), (f), and (g) above in so far as
they relate to Chempower, no Event of Default under any of the
aforementioned paragraphs shall be deemed to have occurred as a
result of actions by Chempower which both (i) have been
authorized or taken by the Board of Directors of Chempower with
the affirmative vote of both Xxxxxx X. Xxxx and Xxxxxx X.
Rochester (but without the affirmative vote of the third member
of the Board of Directors), by Xxxxxx X. Xxxx in his capacity as
an officer of Chempower, or by the Agent and (ii) but for the
operation of this proviso, would constitute an Event of Default
under any of the aforementioned paragraphs at the time authorized
or taken. Nothing in this proviso shall in any way limit the
Agent's rights in the case of an Event of Default under any
paragraph of this Section other than the aforementioned
paragraphs.
If there shall occur any Event of Default set forth in
Subsections (a) through (i); (j)(i), (iii), (iv), (vii) or
(viii); (k) or (l) above, the Agent, by written notice to
American Eco and Chempower, may declare the unpaid principal of
and accrued interest on the Principal Shareholders' Note to be
immediately due and payable, whereupon the total amount of the
then unpaid principal of and interest on such Principal
Shareholders' Note shall become due and payable, without any
further notice, presentment, or demand of any kind, all of which
are hereby expressly waived by Chempower. If there shall occur
any Event of Default set forth in Subsections (j)(ii), (v) or
(vi) above, all indebtedness on the Principal Shareholders' Note
shall automatically become and be immediately due and payable.
Upon the occurrence of any Event of Default and at all times
thereafter during which such Event of Default shall continue, the
Agent shall have the rights and remedies of a secured party under
the UCC in addition to the rights and remedies expressly provided
for under this Agreement and the instruments referred to in
Sections 2 and 3 hereof. The Agent may require Chempower and/or
American Eco to assemble the Collateral (as used hereinafter,
including all such items as are included in the definitions of
Collateral under both the Security Agreement and the Pledge
Agreement) and make it available to the Agent at a reasonably
convenient place to be designated by the Agent. The Agent will
give American Eco reasonable notice under the UCC of the time and
place of any public sale of such Collateral or of the time after
which any private sale or other intended disposition thereof is
to be made. The requirement of reasonable notice shall be met if
such notice is mailed (deposited for delivery, postage prepaid,
by U.S. mail) to American Eco's address as set forth in Section
12(c) of this Agreement (as modified by any change therein which
American Eco has supplied in writing to the Agent), at least ten
(10) days before the time of the public sale or the time after
which any private sale or other intended disposition thereof is
to be made. At any such public or private sale, the Agent may
purchase such Collateral. After deduction for the expenses of the
Agent, the residue of any such sale or other disposition shall be
applied in satisfaction of the Obligations in such order of
preference as the Agent may determine. Any excess, to the extent
permitted by law, shall be paid to Chempower or American Eco, and
Chempower and American Eco shall remain liable for any
deficiency.
10. CONDITIONS PRECEDENT. The obligation of the Principal
Shareholders to perform in accordance with this Agreement and to
engage in the transactions contemplated hereby shall be subject
to the satisfaction of the following conditions prior to such
performance by the Principal Shareholders:
(a) The Effective Time of the Merger shall have
occurred;
(b) Chempower shall have executed and delivered each
of the following documents:
(i) to the Exchange Agent, the Principal Shareholder's
Note, which Principal Shareholders' Note, together with a
cash payment of $7,444,712 of the Merger Consideration due,
in the aggregate, to the Principal Shareholders, will then
be delivered to the Agent upon surrender of the Certificates
representing the Shares held by the Principal Shareholders
in accordance with the provisions of Section 2.03 of the
Merger Agreement;
(ii) to the Agent, the Security Agreement; and
(iii) to the Agent, any other financing statements,
mortgages, leasehold assignments, and other collateral
documents required to grant and perfect liens on all assets
of Chempower, as may be requested by the Agent.
(c) American Eco shall have executed and delivered to
the Agent each of the following documents:
(i) the Principal Shareholders' Guaranty;
(ii) the Pledge Agreement;
(iii) share certificates, stock powers and/or other
instruments necessary to perfect the pledge of all Chempower
shares by American Eco, if so requested by the Agent; and
(iv) An opinion of counsel for American Eco in form and
substance satisfactory to the Agent and the Principal
Shareholders and their counsel relating, inter alia., to the
----------
due authorization, legality and enforceability of the
foregoing and to the perfection of the liens provided for
under the Pledge Agreement.
11. THE AGENT.
(a) APPOINTMENT AND ACCEPTANCE. The Principal
--------------------------
Shareholders, by executing this Agreement, shall be deemed to
have irrevocably appointed Xxxxxx X. Xxxx, and any successor
appointed pursuant to Section 11 (d) hereof, as the Agent to be
the representative and agent of the Principal Shareholders for
all purposes under this Agreement on the terms and conditions set
forth in this Section 11. Xxxxxx X. Xxxx, by his signature below,
hereby accepts his appointment as the original Agent hereunder
and agrees to act as the representative and agent of the
Principal Shareholders for all purposes under this Agreement on
the terms and conditions set forth in this Section 11.
(b) POWERS. As the representative and agent of the
------
Principal Shareholders, the Agent shall have full power and
authority, for and on behalf of each and all of the Principal
Shareholders and in their name, to do all things necessary or
desirable (a) to determine the rights of the Principal
Shareholders under this Agreement, the Principal Shareholders'
Note, the Principal Shareholders' Guaranty, the Pledge Agreement
and the Security Agreement, or to protect the interests of the
Principal Shareholders therein, and (b) to carry out the
provisions of, and to otherwise act on behalf of the Principal
Shareholders under, this Agreement, the Principal Shareholders'
Note, the Principal Shareholders' Guaranty, the Pledge Agreement
and the Security Agreement, including, but not limited to, the
following: (i) to receive, demand, collect, deposit, hold and
disburse all payments of principal or interest on and proceeds of
the Principal Shareholders' Note, the Principal Shareholders'
Guaranty, the Security Agreement, and the Pledge Agreement; (ii)
to commence, prosecute, defend or compromise and settle any
disputes or legal proceedings relating to this Agreement, the
Principal Shareholders' Note, the Principal Shareholders'
Guaranty, the Pledge Agreement or the Security Agreement, and to
take such other actions with respect to such disputes as he deems
necessary or appropriate to resolve such disputes; (iii) to
prepare, execute, endorse and deliver any and all drafts,
certificates and any other documents and instruments in
connection with this Agreement, the Principal Shareholders' Note,
the Principal Shareholders' Guaranty, the Pledge Agreement or the
Security Agreement; (iv) to sign and deliver contracts,
directions, releases, consents, receipts and other written
instruments on behalf of the Principal Shareholders as
contemplated herein; (v) to employ and discharge attorneys and
other professional advisors and agents as he deems necessary or
desirable; (vi) to represent the interests of the Principal
Shareholders at the Closing; (vii) to receive notices on behalf
of the Principal Shareholders pursuant to Section 12(c) of this
Agreement; and (viii) to do, or refrain from doing, all things
required or permitted to be done under this Agreement, the
Principal Shareholders' Note, the Principal Shareholders'
Guaranty, the Pledge Agreement and the Security Agreement as
fully as the Principal Shareholders could do or refrain from
doing.
(c) IRREVOCABILITY. The powers and authority granted
--------------
to the Agent as provided in this Section 11 are specifically
declared to be coupled with an interest and given as security,
and the death, incapacity or any action of any of the Principal
Shareholders or the lapse of time shall not operate to revoke or
in any way to impair or affect such powers and authority.
(d) RESIGNATIONS AND OTHER VACANCIES. An original or
--------------------------------
any successor Agent may resign as such at any time, but such
resignation shall not be effective until a successor Agent has
qualified as set forth in this Section 11(d). In the event of the
resignation, death, incapacity or other inability to serve of an
original or any successor Agent, his or her successor may be
designated by the written designation of the Principal
Shareholders, or any person duly authorized to act on behalf of
either of the Principal Shareholders, who shall deliver the
original of such written designation to American Eco; provided,
--------
however, that the first successor Agent shall be Xxxxxx X.
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Rochester, if he is then living and not incapacitated or
otherwise unable to serve. Any successor to an Agent must qualify
as such by executing a written instrument of acceptance of the
appointment and delivering the original thereof to American Eco
and a copy thereof to each of the Principal Shareholders.
(e) SCOPE OF DUTIES. The Agent shall have only such
---------------
duties and obligations as are imposed upon them by the provisions
of this Section 11 and otherwise by the provisions of this
Agreement, the Principal Shareholders' Note, the Principal
Shareholders' Guaranty, the Pledge Agreement and the Security
Agreement. The Agent hereby undertakes and agrees (a) to make all
reasonable efforts to maximize the amounts realized by the Agent
on the Principal Shareholders' Note, (b) to take all actions
necessary to realize all proceeds available under the Security
Agreement, the Principal Shareholders' Guaranty, and/or the
Pledge Agreement to which the Agent may become entitled from time
to time as beneficiary by the terms thereof as promptly as
practicable following the occurrence of conditions required to
entitle the Agent to collect such proceeds, (c) to take all
reasonable actions to prevent the Principal Shareholders' Note,
the Principal Shareholders' Guaranty, the Security Agreement and
the Pledge Agreement and all payments thereon and proceeds
thereof from becoming subject to any lien or adverse claim and
(d) to promptly pay over to each of the Principal Shareholders
that portion of all payments received by the Agent in respect of
the Principal Shareholders' Note, the Principal Shareholders'
Guaranty, the Security Agreement and the Pledge Agreement in the
amount corresponding to the respective percentage interest of the
Principal Shareholder in such payments as set forthon Exhibit E
hereto.
(f) NO COMPENSATION. The Agent shall not be
---------------
compensated for its services under this Section 11, except that
he shall be reimbursed for any out-of-pocket expenses incurred in
exercising the powers delineated in this Section 11.
(g) LIABILITY; INDEMNIFICATION.
--------------------------
(i) Neither the Agent nor any of his agents shall be
personally liable for any action taken or omitted by them
under this Section 11, including without limitation the
compromise of any disputes or legal proceedings, or any
agreement, document or instrument executed in connection
therewith, except for their own respective willful
misconduct or gross negligence; provided, however, that such
-------- -------
limitation of liability shall not be effective to the extent
that it is prohibited by statute or governing law. The Agent
shall be entitled to rely upon advice of counsel concerning
legal matters and upon any schedule, statement, report,
notice or other document which he believes to be genuine or
to have been presented by a proper person.
(ii) The Principal Shareholders severally agree to
indemnify and hold the Agent harmless from and against any
claims, loss, liability, costs and expenses, including,
without limitation, reasonable attorneys' fees, incurred by
or asserted against the Agent and based on or arising out of
(A) actions taken by the Agent in the exercise of his powers
and duties herein provided or (B) claims of creditors,
receivers or the bankruptcy estate of Chempower or American
Eco with respect to payments made on the Principal
Shareholders' Note, with each of the Principal Shareholders
bearing a proportion of the costs of such indemnification
corresponding to the percentage interest of such Principal
Shareholder as set forth on Exhibit E hereto.
(h) TERMINATION OF POWERS. The powers, authority,
---------------------
rights, duties and obligations granted or imposed as provided in
this Section 11 shall terminate on the second annual anniversary
following the last date on which the Principal Shareholders' Note
has been paid in full or cancelled. Upon such termination, the
Agent shall be released and discharged from all further duties
and responsibilities under this Section 11.
(i) BINDING EFFECT. This Section 11 shall be binding
--------------
upon and inure to the benefit of the Agent and the Principal
Shareholders, and their respective executors, administrators,
successors and assigns.
12. GENERAL PROVISIONS.
(a) SEVERABILITY OF PROVISIONS. If any provision,
--------------------------
term, or portion of this Agreement, (including, without
limitation, (a) any indebtedness, obligation, liability,
contract, agreement, indenture, warranty, covenant, guaranty,
representation, or condition of this Agreement made, assumed, or
entered into, (b) any act or action taken under this Agreement,
or (c) any application of this Agreement) is for any reason held
to be illegal or invalid, such illegality or invalidity shall not
affect any other such provision, term, or portion of this
Agreement, each of which shall be construed and enforced as if
such illegal or invalid provision, term, or portion were not
contained in this Agreement. Any illegality or invalidity of any
application of this Agreement shall not affect any legal and
valid application of this Agreement, and each provision, term,
and portion of this Agreement shall be deemed to be effective,
operative, made, entered into, or taken in the manner and to the
full extent permitted by law.
(b) WAIVER; RIGHTS CUMULATIVE; TIME OF EFFECTIVENESS
------------------------------------------------
OF DEMANDS AND NOTICES. The Agent shall not be deemed to have
----------------------
waived any of its rights under this Agreement or under any other
agreement, instrument, or document executed by Chempower or
American Eco in connection with this Agreement, unless such
waiver be in writing and signed by the Agent. No delay or
omission on the part of the Agent in exercising any right shall
operate as a waiver of such right or any other right. A waiver on
any one occasion shall not be construed as a bar to or waiver of
any right or remedy on any future occasion. All rights and
remedies of the Agent, whether evidenced by this Agreement or by
any other agreement, instrument, or document shall be cumulative
and may be exercised singularly or concurrently. Any written
demands, written requests, or written notices to Chempower or
American Eco that the Agent may elect to give shall be effective
when deposited for delivery, postage prepaid, by U.S. mail, and
addressed to American Eco's address as set forth in Section 12(c)
of this Agreement (as modified by any change therein which
American Eco has supplied in writing to the Agent). If at any
time or times, by assignment or otherwise, the Agent transfers
the Principal Shareholders' Note or any part of the Collateral to
another person in accordance with this Agreement, such transfer
shall, subject to Section 12(i) of this Agreement, carry with it
the Agent's powers and rights under this Agreement with respect
to the Principal Shareholders' Note or Collateral so transferred
and the transferee shall have said powers and rights, whether or
not they are specifically referred to in the transfer. To the
extent that the Agent retains the Principal Shareholders' Note or
any part of the Collateral, the Agent will continue to have the
rights and powers with respect to the Principal Shareholders'
Note and the Collateral as set forth in this Agreement.
(c) NOTICES. All written notices, requests, or other
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communications herein provided for must be addressed:
If to American Eco:
American Eco Corporation
00000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, President
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Chempower, the Principal Shareholders, or the
Agent:
CHEMPOWER, INC.
000 Xxxx Xxxxxxxxxx Xxxx Xxxx
Xxxxx, Xxxx 00000
Attention: X.X. Xxxx, President
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Xxxxxxxx Xxxx & Xxxxx P.L.L.
0000 Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
or at such other address as either party may designate to the
other in writing. Such communication will be effective (i) if by
telex, when such telex is transmitted and the appropriate answer
back is received or (ii) if given by mail, 72 hours after such
communication is deposited in the U.S. mail certified mail return
receipt requested.
(d) GOVERNING LAW. The laws of the State of Ohio
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shall govern the construction of this Agreement (including,
without limitation, any terms not specifically defined in this
Agreement that may be so specifically defined pursuant to Ohio
Revised Code Section 1309.01-1309.50 inclusive, and including any
amendments thereof or any substitution therefor) and the rights
and duties of Chempower, American Eco, the Principal
Shareholders, and the Agent. This Agreement shall be binding upon
and inure to the benefit of Chempower, American Eco, and the
Agent and their respective successors, assigns, heirs, and
administrators. The rights and powers given in this Agreement to
the Agent are in addition to those otherwise created or existing
in the same Collateral by virtue of other agreements or writings.
(e) INTEGRATION. This Agreement and any promissory
-----------
note or other writing executed and delivered by any person to the
Agent in connection herewith integrate all the terms and
conditions mentioned herein or incidental hereto and supersede
all oral representations and negotiations and prior writings with
respect to the subject matter hereof.
(f) RIGHTS IN ADDITION AND NOT IN SUBSTITUTION. The
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rights conferred upon Xxxxxx X. Xxxx and Xxxxxx X. Rochester by
this Agreement shall be in addition to and not in substitution
for any of the rights conferred upon them pursuant to the
Employment Agreement and the Non-Competition Agreement entered
into between each of them and American Eco and Chempower;
further, the rights conferred upon Messrs. Kukk and Rochester
pursuant to such Employment Agreements and Non-Competition
Agreements shall not act as a limitation upon any of the rights
conferred upon them pursuant to this Agreement.
(g) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
------------------------------------------
representations and warranties contained herein shall survive the
execution and delivery of this Agreement, any investigation at
any time made by the Agent, and shall continue in full force and
effect so long as any Obligations are outstanding and unpaid.
(h) ENTIRE AGREEMENT; AMENDMENT. This Agreement,
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including the Disclosure Schedule and the Exhibits attached
hereto, and the agreements and instruments referred to or
provided for herein, embodies the entire agreement and
understanding between Chempower, American Eco, and the Agent and
supersedes all other prior agreements and understandings relating
to the subject matter hereof. The parties hereto may enter into
further and additional written agreements to amend or supplement
this Agreement and the terms and provisions of such further and
additional written agreements shall be deemed a part of this
Agreement as though incorporated herein.
(i) PARTIES IN INTEREST. All the terms and provisions
-------------------
of this Agreement shall inure to the benefit of and be binding
upon and be enforceable by the respective successors and assigns
of the parties hereto, whether so expressed or not. Neither
Chempower nor American Eco shall assign its rights under this
Agreement without the prior written consent of the Agent. The
Agent, without the prior written consent of Chempower and/or
American Eco, may assign, or sell participation in, all or part
of the Principal Shareholders' Note and its rights under the
Agreement and the other documents executed in connection
herewith; provided, however, that in the event of such an
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assignment or sale (in one or in a series of transactions) of all
of the Principal Shareholders' Note and all of the Agent's rights
under the Agreement and the other documents executed in
connection herewith, (i) the directors designated by the
Principal Shareholders for service on the Boards of Directors of
Chempower and American Eco shall resign from their positions as
directors promptly following such assignment or sale, and (ii)
the provisions of Paragraphs 8(b), 8(c), and 9(g) hereof would be
of no force and effect thereafter. The Agent agrees that it will
give American Eco prompt written notice of any assignment of all
or part of the Principal Shareholders' Note. If any such
assignment or sale is for less than the Agent's entire interest,
then Chempower and/or American Eco shall only be required to
provide the information and notices specified in this Agreement
to the Agent and not to the transferee or purchasers, as the case
may be; however, if such assignment or sale is for the Agent's
entire interest, then Chempower and/or American Eco shall be
required to provide the transferee or purchaser, as the case may
be, with all information and notices specified in this Agreement.
(j) WAIVER OF COUNTERCLAIMS; WAIVER OF JURY TRIAL.
---------------------------------------------
Each and every right granted to the Agent hereunder or under any
other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of the Agent
to exercise, and no delay in exercising, any right shall operate
as a waiver thereof, nor shall any single or partial exercise of
any right preclude any other or future exercise thereof or the
exercise of any other right. The due payment and performance of
Chempower's indebtedness, liabilities and obligations under this
Agreement shall be without regard to any counterclaim or right of
offset which Chempower and/or American Eco may have against the
Agent, or any of the Principal Shareholders, as applicable, and
without regard to any other obligation of any nature whatsoever
which such parties may have to Chempower and/or American Eco, and
no such counterclaim or offset shall be asserted by Chempower
and/or American Eco in any action, suit or proceeding instituted
by the Agent for payment or performance of Chempower and/or
American Eco's indebtedness, liabilities or obligations under
this Agreement.
CHEMPOWER, AMERICAN ECO, THE PRINCIPAL SHAREHOLDERS, AND THE
AGENT EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS AGREEMENT,
THE PRINCIPAL SHAREHOLDERS' NOTE, THE SECURITY AGREEMENT, THE
PRINCIPAL SHAREHOLDERS' GUARANTY, OR THE PLEDGE AGREEMENT, OR THE
TRANSACTIONS RELATED THERETO.
(k) HEADINGS. Article and Section headings used in
--------
this Agreement are for convenience of reference only and are not
a part of this Agreement for any other purpose.
(l) CONSENT TO JURISDICTION. Chempower and American
-----------------------
Eco agree that any action or proceeding to enforce or arising out
of this Agreement or any of the other documents entered into in
connection herewith may be commenced either in the Court of
Common Pleas for [Summit County], Ohio or in the District Court
of the United States for the Northern District of Ohio, and
Chempower and American Eco each waives personal service of
process and agrees that a summons and complaint commencing an
action or proceeding in any such court shall be properly served
and shall confer personal jurisdiction over such party if served
to it at the address of American Eco listed in Section 12(c) in
accordance with the provisions of Section 12(c) or as otherwise
provided by the laws of the State of Ohio or the United States.
(m) COUNTERPARTS. This Agreement may be executed in
------------
any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and
delivered, shall be deemed to be an original and all of which,
taken together, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Financing Agreement as of the date set forth
above, in the case of each of the corporate parties, by one or
more officers thereunto duly authorized.
AMERICAN ECO CORPORATION CHEMPOWER, INC.
By:/s/ Xxxxxxx X. XxXxxxxx By:/s/ Xxxxxx X. Xxxx
---------------------- ------------------
Title: President Title: V.P. Finance
PRINCIPAL SHAREHOLDERS:
/s/ Xxxxxx X. Xxxx
---------------------------
Xxxxxx X. Xxxx
/s/ Xxxx X. Rochester
---------------------------
Xxxx X. Rochester
AGENT:
/s/Xxxxxx X. Xxxx
---------------------------
Xxxxxx X. Xxxx
EXHIBIT A
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RESPECTIVE
PRINCIPAL PERCENTAGE
SHAREHOLDER INTEREST
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XXXXXX X. XXXX 49.9999805035%
XXXX X. ROCHESTER 50.000001949685%
