1
EXHIBIT 2.1
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PLAN AND AGREEMENT OF MERGER
OF
ITEQ, INC.
AND
ASTROTECH INTERNATIONAL CORPORATION
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DATED AS OF JUNE 30, 1997
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TABLE OF CONTENTS
ARTICLE I
MERGER . . . . . . . . . . . . . 2
1.1. Surviving Corporation . . . . . . . . . . . . . . . . . . . . 2
1.2. Stockholder Approval. . . . . . . . . . . . . . . . . . . . . 2
1.3. Effective Date. . . . . . . . . . . . . . . . . . . . . . . . 2
1.4. Name and Continued Corporate Existence of Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4.1. Name and Existence. . . . . . . . . . . . . . . . . 2
1.4.2. Federal Income Tax Treatment of Merger. . . . . . . 2
1.5. Governing Law and Certificate of Incorporation of Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6. Bylaws of Surviving Corporation . . . . . . . . . . . . . . . 3
1.7. Directors of Surviving Corporation . . . . . . . . . . . . . 3
1.7.1. Directors of Surviving Corporation. . . . . . . . . 3
1.7.2. Vacancies. . . . . . . . . . . . . . . . . . . . . 3
1.8. Capital Stock of Surviving Corporation . . . . . . . . . . . 4
1.9. Conversion of Securities upon Merger . . . . . . . . . . . . 4
1.9.1. General. . . . . . . . . . . . . . . . . . . . . . 4
1.9.2. Conversion of AIX Common Stock. . . . . . . . . . 4
1.9.3. Exchange of AIX Common Stock Certificates. . . . . 4
1.9.4. ITEQ Fractional Shares. . . . . . . . . . . . . . . 4
1.9.5. AIX's Transfer Books Closed. . . . . . . . . . . . 5
1.10. Treatment of Stock Options. . . . . . . . . . . . . . . . . . 5
1.11. Assets and Liabilities . . . . . . . . . . . . . . . . . . . 5
1.11.1. Assets and Liabilities of Merging Corporations
Become Those of Surviving Corporation. . . . . . . . 5
1.11.2. Conveyances to Surviving Corporation. . . . . . . . 6
1.11.3. Accounting Treatment. . . . . . . . . . . . . . . . 6
1.11.4. Unclaimed Merger Consideration; No Escheat. . . . . 6
1.11.5. Dissenting Stockholders of AIX. . . . . . . . . . . 6
1.12. Material Adverse Effect . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF AIX . . . . . . . . . . . . . . . . . 7
2.1. Representations and Warranties of AIX . . . . . . . . . . . . 7
2.1.1. Organization and Standing. . . . . . . . . . . . . . 7
2.1.2. Agreement Authorized and its Effect on Other
Obligations. . . . . . . . . . . . . . . . . . . . 7
2.1.3. Capitalization. . . . . . . . . . . . . . . . . . . 8
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2.1.4. Subsidiaries . . . . . . . . . . . . . . . . . . . 8
2.1.5. Reports and Financial Statements . . . . . . . . . 8
2.1.6. Liabilities . . . . . . . . . . . . . . . . . . . . 9
2.1.7. Additional AIX Information . . . . . . . . . . . . 9
2.1.7.1. Employee Compensation Plans . . . . . . . 9
2.1.7.2. Certain Salaries . . . . . . . . . . . . 9
2.1.7.3. Employee Agreements . . . . . . . . . . . 9
2.1.7.4. Guaranties . . . . . . . . . . . . . . . 10
2.1.7.5. Environmental. . . . . . . . . . . . . . . 10
2.1.8. No Undisclosed Defaults . . . . . . . . . . . . . . 10
2.1.9. Absence of Certain Changes and Events . . . . . . . 10
2.1.9.1. Financial Change . . . . . . . . . . . . 10
2.1.9.2. Property Damage . . . . . . . . . . . . . 10
2.1.9.3. Dividends . . . . . . . . . . . . . . . . 10
2.1.9.4. Capitalization Change . . . . . . . . . . 10
2.1.9.5. Labor Disputes . . . . . . . . . . . . . 10
2.1.9.6. Other Material Changes . . . . . . . . . 10
2.1.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . 11
2.1.11. Intellectual Property . . . . . . . . . . . . . . . 11
2.1.12. Title to Properties . . . . . . . . . . . . . . . . 11
2.1.13. Litigation . . . . . . . . . . . . . . . . . . . . . 12
2.1.14. Environmental Compliance. . . . . . . . . . . . . . 12
2.1.14.1. Environmental Conditions . . . . . . . . . 12
2.1.14.2. Permits, etc . . . . . . . . . . . . . . . 12
2.1.14.3. Compliance. . . . . . . . . . . . . . . . 12
2.1.14.4. Environmental Claims. . . . . . . . . . . 13
2.1.14.5. Renewals. . . . . . . . . . . . . . . . . 13
2.1.15. Compliance with Other Laws . . . . . . . . . . . . . 13
2.1.16. Finder's Fee . . . . . . . . . . . . . . . . . . . . 13
2.1.17. Compliance with ERISA . . . . . . . . . . . . . . . 13
2.1.18. Investigations; Litigation . . . . . . . . . . . . . 14
2.1.19. Product Warranty . . . . . . . . . . . . . . . . . . 14
2.1.20. Information for Proxy Statement. . . . . . . . . . . 15
2.1.21. Investment Company. . . . . . . . . . . . . . . . 15
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ITEQ . . . . . 15
3.1. Representations and Warranties of ITEQ . . . . . . . . . . . 15
3.1.1. Organization and Standing. . . . . . . . . . . . . 15
3.1.2. Agreement Authorized and its Effect on Other
Obligations. . . . . . . . . . . . . . . . . . . . 15
3.1.3. Capitalization. . . . . . . . . . . . . . . . . . . 16
3.1.4. Subsidiaries . . . . . . . . . . . . . . . . . . . 16
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3.1.5. Reports and Financial Statements. . . . . . . . . . 16
3.1.6. Liabilities . . . . . . . . . . . . . . . . . . . . 17
3.1.7. No Undisclosed Defaults . . . . . . . . . . . . . . 17
3.1.8. Absence of Certain Changes and Events in ITEQ. . . 17
3.1.8.1. Financial Change. . . . . . . . . . . . . 17
3.1.8.2. Property Damage . . . . . . . . . . . . . 17
3.1.8.3. Dividends. . . . . . . . . . . . . . . . 17
3.1.8.4. Capitalization Change . . . . . . . . . . 17
3.1.8.5. Labor Disputes . . . . . . . . . . . . . 17
3.1.8.6. Other Material Changes. . . . . . . . . . 17
3.1.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . 17
3.1.10. Intellectual Property. . . . . . . . . . . . . . . 18
3.1.11. Title to Properties. . . . . . . . . . . . . . . . 18
3.1.12. Litigation. . . . . . . . . . . . . . . . . . . . . 19
3.1.13. Environmental Compliance. . . . . . . . . . . . . . 19
3.1.13.1. Environmental Conditions . . . . . . . . 19
3.1.13.2. Permits, etc . . . . . . . . . . . . . . 19
3.1.13.3. Compliance. . . . . . . . . . . . . . . 19
3.1.13.4. Environmental Claims. . . . . . . . . . 19
3.1.13.5. Renewals. . . . . . . . . . . . . . . . 19
3.1.14. Compliance with Other Laws. . . . . . . . . . . . . 19
3.1.15. Finder's Fee. . . . . . . . . . . . . . . . . . . . 20
3.1.16. Compliance With ERISA . . . . . . . . . . . . . . . 20
3.1.17. Investigations; Litigation. . . . . . . . . . . . . 21
3.1.18. Product Warranty . . . . . . . . . . . . . . . . . 21
3.1.19. Information for Proxy Statement. . . . . . . . . . 21
3.1.20. Investment Company. . . . . . . . . . . . . . . . . 21
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE DATE . . . . . . . 21
4.1. Agreements of ITEQ and AIX. . . . . . . . . . . . . . . . . . 21
4.1.1. Maintenance of Present Business. . . . . . . . . . 21
4.1.2. Maintenance of Properties. . . . . . . . . . . . . 22
4.1.3. Maintenance of Books and Records. . . . . . . . . . 22
4.1.4. Compliance with Law. . . . . . . . . . . . . . . . 22
4.1.5. Compliance with Agreement. . . . . . . . . . . . . 22
4.1.6. Inspection of Each Merging Corporation. . . . . . . 22
4.2. Additional Agreements of ITEQ and AIX. . . . . . . . . . . . 22
4.2.1. Xxxx-Xxxxx-Xxxxxx. . . . . . . . . . . . . . . . . 22
4.2.2. Proxy Statement. . . . . . . . . . . . . . . . . . 22
4.2.3. Notice of Material Developments. . . . . . . . . . 23
4.3. Additional Agreements of AIX. . . . . . . . . . . . . . . . . 23
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4.3.1. Prohibition of Certain Employment Contracts. . . . 23
4.3.2. Prohibition of Certain Loans. . . . . . . . . . . . 23
4.3.3. Prohibition of Certain Commitments. . . . . . . . . 23
4.3.4. Disposal of Assets. . . . . . . . . . . . . . . . . 23
4.3.5. Maintenance of Insurance. . . . . . . . . . . . . . 23
4.3.6. AIX Acquisition Proposals. . . . . . . . . . . . . 24
4.3.6.1. No Solicitation. . . . . . . . . . . . . 24
4.3.6.2. Acceptance of Superior AIX Transaction
Proposals . . . . . . . . . . . . . . . . . . . . . 25
4.3.7. No Amendment to Certificate of Incorporation, etc. 25
4.3.8. No Issuance, Sale, or Purchase of Securities. . . . 26
4.3.9. Prohibition on Dividends. . . . . . . . . . . . . . 26
4.3.10. Supplemental Financial Statements. . . . . . . . . 26
4.3.11. Notice of Material Developments. . . . . . . . . . 26
4.3.12. Stockholders' Meeting . . . . . . . . . . . . . . . 26
4.4. Additional Agreements of ITEQ. . . . . . . . . . . . . . . . 26
4.4.1. Prohibition of Certain Employment Contracts. . . . 26
4.4.2. Prohibition of Certain Loans. . . . . . . . . . . . 27
4.4.3. Prohibition of Certain Commitments. . . . . . . . . 27
4.4.4. Disposal of Assets. . . . . . . . . . . . . . . . . 27
4.4.5. Maintenance of Insurance. . . . . . . . . . . . . . 27
4.4.6. No Amendment to Certificate of Incorporation, etc. 27
4.4.7. No Issuance, Sale, or Purchase of Securities. . . . 27
4.4.8. Prohibition on Dividends. . . . . . . . . . . . . . 28
4.4.9. Stockholders' Meeting. . . . . . . . . . . . . . . 28
4.4.10. Issuance of ITEQ Common Stock. . . . . . . . . . . 28
4.4.11. Listing of ITEQ Stock. . . . . . . . . . . . . . . 28
4.4.12. Notice of Material Developments. . . . . . . . . . 28
4.4.13. Refinancing of Outstanding Indebtedness. . . . . . 28
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS . . . . . . . . 29
5.1. Conditions Precedent to Obligations of AIX. . . . . . . . . . 29
5.1.1. Representations and Warranties of ITEQ True at
Effective Date. . . . . . . . . . . . . . . . . . . 29
5.1.2. No Material Litigation. . . . . . . . . . . . . . . 29
5.1.3. Opinion of ITEQ Counsel. . . . . . . . . . . . . . 29
5.1.4. Stockholder Approval. . . . . . . . . . . . . . . . 30
5.1.5. Xxxx-Xxxxx-Xxxxxx, etc. . . . . . . . . . . . . . . 30
5.1.6. Registration; Listing of ITEQ Common Stock. . . . . 30
5.1.7. Consent of Certain Parties in Privity With ITEQ. . 30
5.1.8. Stock Options and Other Employee Benefit Plans of AIX . . . . 30
5.1.9. Ancillary Matters. . . . . . . . . . . . . . . . . 31
5.1.10. Tax Opinion . . . . . . . . . . . . . . . . . . . . 31
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5.2. Conditions Precedent to Obligations of ITEQ . . . . . . . . . 31
5.2.1. Representations and Warranties of AIX True at
Effective Date. . . . . . . . . . . . . . . . . . . 31
5.2.2. No Material Litigation. . . . . . . . . . . . . . . 31
5.2.3. Opinion of AIX's Counsel. . . . . . . . . . . . . . 32
5.2.4. Stockholder Approval. . . . . . . . . . . . . . . . 32
5.2.5. Xxxx-Xxxxx-Xxxxxx, etc. . . . . . . . . . . . . . . 32
5.2.6. Consent of Certain Parties in Privity with AIX. . . 32
5.2.7. Ancillary Matters . . . . . . . . . . . . . . . . . 32
ARTICLE VI
TERMINATION AND ABANDONMENT . . . . . . . . . . 33
6.1. Termination. . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1.1. By Mutual Consent. . . . . . . . . . . . . . . . . 33
6.1.2. By ITEQ Because of Conditions Precedent. . . . . . 33
6.1.3. By ITEQ Because of Material Adverse Change. . . . . 33
6.1.4. By AIX Because of Conditions Precedent. . . . . . . 33
6.1.5. By AIX Due to a Superior AIX Transaction Proposal. 33
6.1.6. By AIX Because of Material Adverse Change. . . . . 33
6.1.7. By ITEQ or AIX Because of Legal Proceedings. . . . 33
6.1.8. By ITEQ or AIX if Merger not Effective by November
30, 1997. . . . . . . . . . . . . . . . . . . . . . 34
6.1.9. By ITEQ or AIX if Merger Cannot be Accounted for
as a Pooling. . . . . . . . . . . . . . . . . . . . 34
6.2. Termination by Board of Directors. . . . . . . . . . . . . . 34
6.3. Effect of Termination. . . . . . . . . . . . . . . . . . . . 34
6.4. Waiver of Conditions. . . . . . . . . . . . . . . . . . . . . 34
6.5. Expense on Termination. . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . 34
7.1. Exchange of Options . . . . . . . . . . . . . . . . . . . . . 34
7.2. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.2.1. Indemnification by ITEQ as to Proxy Statement . . . 35
7.2.2. Indemnification of Directors and Officers . . . . . 35
7.2.3. Indemnification Procedure . . . . . . . . . . . . . 35
7.2.4. Benefits . . . . . . . . . . . . . . . . . . . . . 36
7.3. Registration of Certain AIX Control Person Shares. . . . . . 36
7.3.1. Agreement to Register Resales . . . . . . . . . . . 36
7.3.2. Procedures . . . . . . . . . . . . . . . . . . . . 36
7.3.3. Registration Expenses . . . . . . . . . . . . . . . 36
7.3.4. Preparation; Reasonable Investigation . . . . . . . 37
7.3.5. Rights Non-Transferable . . . . . . . . . . . . . . 37
7.3.6. Indemnification by ITEQ . . . . . . . . . . . . . . 37
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7.3.7. Notices of Claims, etc . . . . . . . . . . . . . . 38
7.3.8. Undertaking to File Reports and Cooperate in Rule
144 Transactions . . . . . . . . . . . . . . . . . 38
7.3.9. Beneficiaries . . . . . . . . . . . . . . . . . . . 38
7.4. Affiliate Agreements. . . . . . . . . . . . . . . . . . . . . 39
7.4.1. AIX Affiliates . . . . . . . . . . . . . . . . . . 39
7.4.2. ITEQ Affiliates . . . . . . . . . . . . . . . . . . 39
7.5. Publication of Combined Results . . . . . . . . . . . . . . . 39
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1. Entirety. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.2. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 39
8.3. Notices and Waivers. . . . . . . . . . . . . . . . . . . . . 39
8.4. Termination of Representations, Warranties, etc. . . . . . . 40
8.5. Table of Contents and Captions. . . . . . . . . . . . . . . . 40
8.6. Successors and Assigns. . . . . . . . . . . . . . . . . . . . 40
8.7. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 40
8.8. Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . 41
8.9. Public Announcements. . . . . . . . . . . . . . . . . . . . . 41
8.10. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 41
APPENDICES
Amended and Restated Certificate of Incorporation of ITEQ . . App. I
Amended and Restated Bylaws of ITEQ . . . . . . . . . . . . . App. II
AIX Affiliate Agreement . . . . . . . . . . . . . . . . . . . App. III
ITEQ Affiliate Agreement . . . . . . . . . . . . . . . . . . App. IV
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PLAN AND AGREEMENT OF MERGER
PLAN AND AGREEMENT OF MERGER ("Agreement"), dated as of June 30, 1997,
by and between ITEQ, Inc., a Delaware corporation ("ITEQ" or the "Surviving
Corporation"), and Astrotech International Corporation, a Delaware corporation
("AIX"). ITEQ and AIX are hereinafter collectively referred to as the "Merging
Corporations."
W I T N E S S E T H:
WHEREAS, ITEQ is a corporation duly organized and validly existing under
the laws of the State of Delaware, with its registered office at 0000 Xxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000 and its principal executive office at 0000
Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000;
WHEREAS, the authorized capital stock of ITEQ consists of 1,000,000
shares of preferred stock, par value $.01 per share, of which at June 30, 1997,
no shares were issued or outstanding; and 30,000,000 shares of common stock,
par value $.001 per share ("ITEQ Common Stock"), of which at June 30, 1997,
16,966,231 shares were issued and outstanding; 1,052,325 shares were reserved
for issuance in conjunction with options outstanding under various ITEQ benefit
plans and another 1,927,221 shares were reserved for issuance upon exercise of
outstanding warrants; at the same date, 791 shares of Common Stock were held in
ITEQ's treasury;
WHEREAS, AIX is a corporation duly organized and validly existing under
the laws of the State of Delaware, with its registered office at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 and its principal executive office at 000
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxx 00000;
WHEREAS, the authorized capital stock of AIX consists of 20,000,000
shares of common stock, par value $.01 per share (the "AIX Common Stock"), of
which at June 30, 1997, 9,962,920 shares were issued and outstanding, and an
additional 832,832 shares were reserved for issuance in conjunction with
various employee benefit plans; at the same date, no shares were held in AIX's
treasury; and
WHEREAS, the respective boards of directors of ITEQ and AIX deem it
desirable and in the best interests of their respective corporations and their
respective stockholders that AIX be merged into ITEQ, pursuant to the
provisions of Section 251 of the General Corporation Law of the State of
Delaware ("DGCL"), in exchange for the consideration herein provided for, and
have proposed, declared advisable, and approved such merger pursuant to this
Plan and Agreement of Merger (the "Agreement"), which Agreement has been duly
approved by resolutions of the respective boards of directors of ITEQ and AIX;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, and in order to set forth the terms
and conditions of the merger, the mode of carrying the same into effect, the
manner and basis of converting the presently outstanding shares of AIX Common
Stock into shares of ITEQ Common Stock, and such other details and provisions
as are deemed necessary or proper, the parties hereto agree as follows:
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ARTICLE I
MERGER
1.1. Surviving Corporation. Subject to the adoption and approval of
this Agreement by the requisite vote of the stockholders of each of the Merging
Corporations and to the other conditions hereinafter set forth, ITEQ and AIX
shall be, upon the Effective Date of the merger (as defined in Section 1.3
hereof), merged into a single surviving corporation, which shall be ITEQ, one
of the Merging Corporations, which shall continue its corporate existence and
remain a Delaware corporation governed by and subject to the laws of that
state.
1.2. Stockholder Approval. This Agreement shall be submitted for
adoption and approval by the stockholders of each of the Merging Corporations
in accordance with their respective certificates of incorporation and the
applicable laws of the State of Delaware, at separate meetings called and held
for such purpose.
1.3. Effective Date. The merger shall become effective upon the
filing by ITEQ of a Certificate of Merger with the Secretary of State of the
State of Delaware in accordance with Section 251(c) of the DGCL. The date upon
which the merger shall become effective is referred to in this Agreement as the
"Effective Date."
1.4. Name and Continued Corporate Existence of Surviving Corporation
1.4.1. Name and Existence. On the Effective Date, the
Certificate of Incorporation of ITEQ, the corporation whose corporate
existence is to survive the merger and continue thereafter as the
surviving corporation, shall be amended and restated in its entirety
[reference to omitted appendix] (the "Restated Certificate of
Incorporation"). In all other respects the identity, existence,
purposes, powers, objects, franchises, rights, and immunities of ITEQ,
the surviving corporation of the merger, shall continue unaffected and
unimpaired by the merger, and the corporate identity, existence,
purposes, powers, objects, franchises, rights, and immunities of AIX
shall be wholly merged into ITEQ, the Surviving Corporation, and ITEQ
shall be fully vested therewith. Accordingly, on the Effective Date,
the separate existence of AIX, except insofar as continued by statute,
shall cease.
1.4.2. Federal Income Tax Treatment of Merger. The merger is
intended to qualify as and, subject to the requirements of Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"), shall be characterized as a tax-free merger transaction
described in Section 368(a)(1)(A) of the Code.
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1.5. Governing Law and Certificate of Incorporation of Surviving
Corporation. The laws of Delaware shall continue to govern the Surviving
Corporation. On the Effective Date, the Restated Certificate of Incorporation
shall be the certificate of incorporation of ITEQ until further amended in the
manner provided by law.
1.6. Bylaws of Surviving Corporation. Effective as of the Effective
Date, the bylaws of ITEQ shall be amended and restated in their entirety
[reference to omitted appendix] (the "Restated Bylaws"), and the Restated
Bylaws shall be the bylaws of the Surviving Corporation until altered, amended,
or repealed, or until new bylaws shall be adopted in accordance with the
provisions of law, the Restated Certificate of Incorporation and the Restated
Bylaws.
1.7. Directors of Surviving Corporation
1.7.1. Directors of Surviving Corporation. The names and
addresses of the persons who, upon the Effective Date, shall constitute
the board of directors of the Surviving Corporation, and who shall hold
office until the first annual meeting of stockholders of the Surviving
Corporation next following the Effective Date, are as follows:
NAME ADDRESS
---- -------
Xxxxxx X. Xxxxxxx 000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxx 0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
Xxxx X. Xxxxxxx, Chairman 0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Xxxxxxxx X. XxXxxx 0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxx 0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
T. Xxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Xxxxx X. Xxxxxx 4009 Birdneck
Xxxxxx, Xxxxxxxx 00000
Xxxxx X. Read Xxxxxxxx Xxxxx
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxxx XX0X XXX
Xxxxxxx
S. Xxxx Xxxxxxxx 000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
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1.7.2. Vacancies. On or after the Effective Date, if a vacancy
shall exist for any reason in the board of directors of the Surviving
Corporation, such vacancy shall be filled in the manner provided in the
Restated Certificate of Incorporation and/or Restated Bylaws of the
Surviving Corporation.
1.8. Capital Stock of Surviving Corporation. The authorized number of
shares of capital stock of the Surviving Corporation, and the par value,
designations, preferences, rights, and limitations thereof, and the express
terms thereof, shall be as set forth in the Restated Certificate of
Incorporation.
1.9. Conversion of Securities upon Merger
1.9.1. General. The manner and basis of converting the issued
and outstanding shares of the capital stock of AIX into shares of the
capital stock of ITEQ shall be as hereinafter set forth in this Section
1.9.
1.9.2. Conversion of AIX Common Stock. On the Effective Date,
each share of AIX Common Stock then issued and outstanding, without any
action on the part of the holders thereof, shall automatically become
and be converted into the right to receive certificates evidencing 0.93
of a fully paid and nonassessable share of issued and outstanding ITEQ
Common Stock (the "ITEQ Shares") upon surrender, in accordance with
Paragraph 1.9.3 hereof, of certificates theretofore evidencing shares of
AIX Common Stock. The ITEQ Shares are hereinafter referred to
collectively as the "Merger Consideration."
1.9.3. Exchange of AIX Common Stock Certificates. Commencing on
the Effective Date, each holder of an outstanding certificate or
certificates theretofore representing shares of AIX Common Stock may
surrender the same to an exchange agent designated by ITEQ, and such
holder shall be entitled upon such surrender to receive in exchange
therefor a certificate or certificates representing the number of whole
ITEQ Shares into which the shares of AIX Common Stock theretofore
represented by the certificate or certificates so surrendered shall have
been converted as aforesaid. However, before surrender, each
outstanding certificate representing issued and outstanding AIX Common
Stock shall be deemed, for all purposes, only to evidence ownership of
the number of whole ITEQ Shares into which such shares have been so
converted. Unless and until such outstanding certificates formerly
representing AIX Common Stock are so surrendered, no dividend payable to
holders of record of ITEQ Common Stock as of any date after the
Effective Date shall be paid to the holders of such outstanding
certificates in respect thereof. Upon surrender of such outstanding
certificates, however, there shall be paid to the holders of the
certificates of ITEQ Shares issued in partial exchange therefor the
amount of dividends, if any, which theretofore (but after the Effective
Date) became payable with respect to such full ITEQ Shares. No interest
shall be payable with respect to the payment of such dividends on
surrender of outstanding certificates. The holder of fractional share
interests, as such, shall
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not be entitled to any dividends or to any distribution in the event of
liquidation or to any voting or other privileges of a stockholder of
ITEQ.
1.9.4. ITEQ Fractional Shares. No certificates for fractional
share interests of ITEQ Common Stock will be issued, but, in lieu
thereof, ITEQ will settle all such fractional share interests in cash on
the basis of the closing price for ITEQ Common Stock on the Nasdaq
National Market (as reported in The Wall Street Journal) on the last
trading day before the Effective Date.
1.9.5. AIX's Transfer Books Closed. Upon the Effective Date, the
stock transfer books of AIX shall be deemed closed, and no transfer of
any certificates theretofore representing shares of AIX shall thereafter
be made or consummated.
1.10. Treatment of Stock Options. On the Effective Date, each of the
then outstanding options to purchase AIX Common Stock (collectively, the "AIX
Options")(which includes all outstanding options granted under AIX's stock
option plans (the "AIX Option Plans")) will and without any further action on
the part of any holder thereof (herein, an "optionholder"), be exchanged for an
option to purchase that number of shares of ITEQ Common Stock determined by
multiplying the number of shares of AIX Common Stock subject to such AIX Option
at the Effective Date by 0.93, at an exercise price per share of ITEQ Common
Stock equal to the exercise price per share of such AIX Option divided by 0.93.
If the foregoing calculation results in an exchanged AIX Option being
exercisable for a fraction of a share of ITEQ Common Stock, then the number of
shares of ITEQ Common Stock subject to such option will be rounded down to the
nearest whole number of shares, and the total exercise price for the option
will be reduced by the exercise price of the fractional share. The term,
exercisability, vesting schedule, and all other terms and conditions of the
AIX Options will otherwise be unchanged by the provisions of this Section 1.10
and shall operate in accordance with their terms. All shares of ITEQ Common
Stock issued upon exercise of the exchanged AIX Options shall be registered
under an effective Form S-8 Registration Statement (or other comparable form)
filed with the Securities and Exchange Commission (the "Commission").
1.11. Assets and Liabilities
1.11.1. Assets and Liabilities of Merging Corporations Become
Those of Surviving Corporation. On the Effective Date, all rights,
privileges, powers, immunities, and franchises of each of the Merging
Corporations, both of a public and private nature, and all property,
real, personal, and mixed, and all debts due on whatever account, as
well as stock subscriptions and all other choses or things in action,
and all and every other interest of or belonging to or due to either of
the Merging Corporations, shall be taken by and shall be vested in the
Surviving Corporation without further act or deed, and all such rights,
privileges, powers, immunities, and franchises, property, debts, choses
or things in action, and all and every other interest of each of the
Merging Corporations shall be thereafter as effectually the property of
the Surviving Corporation as they were of the respective Merging
Corporations, and the title to any real or other property, or any
interest therein, whether
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vested by deed or otherwise, in either of the Merging Corporations,
shall not revert or be in any way impaired by reason of the merger,
provided, however, that all rights of creditors and all liens upon any
properties of each of the Merging Corporations shall be preserved
unimpaired, and all debts, liabilities, restrictions, obligations, and
duties of the respective Merging Corporations, including without
limitation all obligations, liabilities and duties as lessee under any
existing lease, shall thenceforth attach to the Surviving Corporation
and may be enforced against and by it to the same extent as if such
debts, liabilities, duties, restrictions and obligations had been
incurred or contracted by it. Any action or proceeding pending by or
against either of the Merging Corporations may be prosecuted to judgment
as if the merger had not taken place, or the Surviving Corporation may
be substituted in place of either of the Merging Corporations.
1.11.2. Conveyances to Surviving Corporation. The Merging
Corporations hereby agree, respectively, that from time to time, as and
when requested by the Surviving Corporation, or by its successors and
assigns, they will execute and deliver or cause to be executed and
delivered, all such deeds, conveyances, assignments, permits, licenses
and other instruments, and will take or cause to be taken such further
or other action as the Surviving Corporation, its successors or assigns,
may deem necessary or desirable to vest or perfect in or confirm to the
Surviving Corporation, its successors and assigns, title to and
possession of all the property, rights, privileges, powers, immunities,
franchises, and interests referred to in this Paragraph 1.11.2 and
otherwise carry out the intent and purposes of this Agreement.
1.11.3. Accounting Treatment. The assets and liabilities of the
Merging Corporations shall be taken up on the books of the Surviving
Corporation in accordance with generally accepted accounting principles,
and the capital surplus and retained earnings accounts of the Surviving
Corporation shall be determined, in accordance with generally accepted
accounting principles, by the board of directors of the Surviving
Corporation. Nothing herein shall prevent the board of directors of the
Surviving Corporation from making any future changes in its accounts in
accordance with law.
1.11.4. Unclaimed Merger Consideration; No Escheat. Subject to
any contrary provision of governing law, all consideration deposited
with the exchange agent or held by ITEQ for the payment of the
consideration into which the outstanding shares of AIX Common Stock
shall have been converted, and remaining unclaimed for one year after
the Effective Date, shall be paid or delivered to ITEQ; and the holder
of any unexchanged certificate or certificates which before the
Effective Date represented shares of AIX Common Stock shall thereafter
look only to ITEQ for exchange or payment thereof upon surrender of such
certificate or certificates to ITEQ.
1.11.5. Dissenting Stockholders of AIX. AIX (or ITEQ on behalf
of AIX) agrees that, if the merger contemplated hereby becomes
effective, it will promptly pay to any dissenting stockholder of AIX the
amount, if any, to which such holder is entitled under the provisions
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of Section 262 of the DGCL, provided such dissenter acts in strict
compliance with such provisions.
1.12. Material Adverse Effect. "Material Adverse Effect" or "Material
Adverse Change" means any effect, change, event, circumstance or condition
which when considered with all other effects, changes, events, circumstances or
conditions would reasonably be expected to result in a "loss" having the effect
of adversely affecting the business, results of operations, or financial
prospects of ITEQ or AIX, in each case including its respective subsidiaries
together with it taken as a whole, as the case may be, so that the benefits
reasonably expected to be obtained by the other party to the merger
contemplated by this Agreement more likely than not would be jeopardized. In
no event shall any of the following constitute a Material Adverse Effect or a
Material Adverse Change: (i) a change in the trading prices of either of ITEQ's
or AIX's equity securities between the date hereof and the Effective Date, in
and of itself; (ii) effects, changes, events, circumstances or conditions
generally affecting the industry in which either ITEQ or AIX operate or arising
from changes in general business or economic conditions; (iii) effects,
changes, events, circumstances or conditions directly attributable to (a) out-
of-pocket fees and expenses (including without limitation legal, accounting,
investigatory, investment banking, and other fees and expenses) incurred in
connection with the transactions contemplated by this Agreement, or (b) the
payment by ITEQ or AIX of all amounts due to any officers or employees of AIX
under employment contracts, non-competition agreements, employee benefit plans
or severance arrangements; (iv) any effects, changes, events, circumstances or
conditions resulting from any change in law or generally accepted accounting
principles, which affect generally entities such as ITEQ and AIX; and (v) any
effect resulting from compliance by ITEQ or AIX with the terms of this
Agreement. For purposes of this subparagraph, the term "loss" shall mean any
and all direct or indirect payments, obligations, assessments, losses, loss of
income, liabilities, fines, penalties, costs and expenses paid or incurred or
more likely than not to be paid or incurred, or diminutions in value of any
kind or character (whether known or unknown, conditional or unconditional,
xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise) that are more likely than not to occur,
including without limitation penalties, interest on any amount payable to a
third party as a result of the foregoing and any legal or other expenses
reasonably incurred or more likely than not to be incurred in connection with
investigating or defending any demands, claims, actions or causes of action
that, if adversely determined, would likely result in losses, and all amounts
paid in settlement of claims or actions; provided, however, that losses shall
be net of any insurance proceeds entitled to be received from a nonaffiliated
insurance company on account of such losses (after taking into account any
costs incurred in obtaining such proceeds and any increase in insurance
premiums as a result of a claim with respect to such proceeds).
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF AIX
2.1. Representations and Warranties of AIX. AIX represents and
warrants as follows:
2.1.1. Organization and Standing. AIX is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, has full requisite corporate power and authority to
carry on its business as it is currently conducted, and to own and
operate the properties currently owned and operated by it, and is duly
qualified or licensed to do business and is in good standing as a
foreign corporation authorized to do business in all jurisdictions in
which the character of the properties owned or the nature of the
business conducted by it would make such qualification or licensing
necessary, except where the failure to be so qualified or licensed could
not reasonably be expected to have a Material Adverse Effect on AIX.
2.1.2. Agreement Authorized and its Effect on Other Obligations.
Upon approval of this Agreement by the stockholders of AIX, the
consummation of the transactions contemplated hereby will have been duly
and validly authorized by all necessary corporate action on the part of
AIX, and this Agreement will be a valid and binding obligation of AIX
enforceable against AIX (subject to normal equitable principles) in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, debtor relief or similar laws
affecting the rights of creditors generally. At the Effective Date, and
except as specified in Schedule 2.1.2 [omitted], the consummation of the
merger contemplated by this Agreement will not conflict with or result
in a violation or breach of any term or provision of, nor constitute a
default under (i) the certificate of incorporation or bylaws of AIX or
(ii) any obligation, indenture, mortgage, deed of trust, lease, contract
or other agreement to which AIX or any of its subsidiaries is a party or
by which any of them or their properties are bound, other than such
violations, breaches or defaults as could not reasonably be expected to
have a Material Adverse Effect on AIX.
2.1.3. Capitalization. The authorized capitalization of AIX
consists of 20,000,000 shares of common stock, par value $.01 per share
(the "AIX Common Stock"), of which at June 30, 1997, 9,962,920 shares
were issued and outstanding, and an additional 832,832 shares were
reserved for issuance in conjunction with various employee benefit
plans; at the same date, no shares were held in AIX's treasury.
2.1.4. Subsidiaries. Schedule 2.1.4 [omitted] lists the
subsidiary corporations of AIX existing at June 30, 1997, and shows as
to each of such subsidiary corporations the percentage of the total
outstanding stock thereof which is owned by AIX. Except as specified in
Schedule 2.1.4 [omitted], all outstanding shares of stock of the
subsidiary corporations owned by AIX are validly issued, fully paid, and
nonassessable, and AIX has
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good and marketable title thereto free and clear of any mortgage,
pledge, lien, charge, security interest, option, right of first refusal,
preferential purchase right, defect, encumbrance or other right or
interest of any other person (collectively, an "Encumbrance"). Each
such subsidiary is a corporation duly organized, validly existing, and
in good standing under the laws of the jurisdiction under which it is
incorporated and has full requisite corporate power and authority to own
its property and carry on its business as presently conducted by it and
is, or on the Effective Date will be, duly qualified or licensed to do
business and is, or on the Effective Date will be, in good standing as a
foreign corporation authorized to do business in all jurisdictions in
which the character of the properties owned or the nature of the
business conducted makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed could not
reasonably be expected to have a Material Adverse Effect on AIX. As
hereinafter used in this Article II, the term "AIX" also includes any
and all of its directly and indirectly held subsidiaries, except where
the context indicates to the contrary.
2.1.5. Reports and Financial Statements. AIX has previously
furnished to ITEQ true and complete copies of (a) all annual reports
filed with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), since September 30, 1994, (b)
AIX's quarterly and other reports filed with the Commission since
September 30, 1994, (c) all definitive proxy solicitation materials
filed with the Commission since September 30, 1994, and (d) any
registration statements declared effective by the Commission since
September 30, 1994. The consolidated financial statements of AIX and
its subsidiaries included in AIX's most recent report on Form 10-K and
most recent report on Form 10-Q, and any other reports filed with the
Commission by AIX under the Exchange Act (collectively, the "AIX
Reports") were, or (if filed after the date hereof) will be, prepared in
accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved and fairly present, or will
present, the consolidated financial position for AIX and its
subsidiaries as of the dates thereof and the consolidated results of
their operations and changes in financial position for the periods then
ended (except with respect to interim period financial statements, for
normal year-end adjustments which are not material); and the AIX Reports
did not and will not 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 therein, in light of the circumstances under
which they were made, not misleading. Since September 30, 1994, AIX has
filed with the Commission all reports required to be filed by AIX under
the Exchange Act and the rules and regulations of the Commission.
2.1.6. Liabilities. AIX does not have any liabilities or
obligations, either accrued, absolute, contingent, or otherwise, or have
any knowledge of any potential liabilities or obligations, which could
reasonably be expected to have a Material Adverse Effect on AIX, other
than those (i) disclosed in the AIX Reports or (ii) set forth on
Schedule 2.1.6 hereto [omitted].
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2.1.7. Additional AIX Information. Attached as Schedule 2.1.7
[omitted] are true, complete and correct lists of the following items
(which will be periodically updated by AIX and delivered to ITEQ through
the Effective Date), and AIX agrees that upon the request of ITEQ, it
will furnish to ITEQ true, complete and correct copies of any documents
referred to in such lists:
2.1.7.1. Employee Compensation Plans. All bonus,
incentive compensation, stock option, deferred compensation,
profit-sharing, retirement, pension, welfare, group insurance,
death benefit, or other fringe benefit plans, arrangements or
trust agreements covering active, former or retired employees of
AIX (collectively, "AIX Plans"), together with copies of the most
recent reports with respect to such plans, arrangements, or trust
agreements filed with any governmental agency and all Internal
Revenue Service determination letters that have been received
with respect to such plans;
2.1.7.2. Certain Salaries. The names and salary rates of
all present officers and employees of AIX whose current regular
annual salary rate is $50,000 or more, together with any bonuses
paid or payable to such persons for the fiscal year ended
September 30, 1996, or since that date, and, to the extent
existing on the date of this Agreement, all arrangements with
respect to any bonuses to be paid to them from and after the date
of this Agreement;
2.1.7.3. Employee Agreements. Any collective bargaining
agreements of AIX with any labor union or other representative of
employees, including amendments, supplements, and understandings,
and all employment and consulting agreements of AIX;
2.1.7.4. Guaranties. All third party indebtedness,
liabilities and commitments of others as to which AIX is a
guarantor, endorser, co-maker, surety, or accommodation maker, or
is contingently liable therefor (excluding liabilities as an
endorser of checks and the like in the ordinary course of
business) and all letters of credit, whether stand-by or
documentary, issued by any third party;
2.1.7.5. Environmental. All environmental orders and
decrees material to current operations conducted by AIX and all
environmental audits, assessments, investigations and reviews
conducted within the last five years on any property owned or
used by AIX.
Schedule 2.1.7 [omitted] shall be true, complete and correct as
of the Effective Date.
2.1.8. No Undisclosed Defaults. Except as may be specified in
the AIX Reports or Schedule 2.1.8 [omitted], AIX is not a party to, or
bound by, any material contract or arrangement of any kind to be
performed after the Effective Date, nor is AIX in default in
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any material obligation or covenant on their part to be performed under
any material obligation, lease, contract, order, plan or other
arrangement except as identified in Schedule 2.1.8 [omitted].
2.1.9. Absence of Certain Changes and Events. Except as set
forth in Schedule 2.1.9 hereto [omitted], other than as a result of the
transactions contemplated by this Agreement, since March 31, 1997, there
has not been:
2.1.9.1. Financial Change. Any adverse change in the
financial condition, backlog, operations, assets, liabilities or
business of AIX which could reasonably be expected to have a
Material Adverse Effect on AIX;
2.1.9.2. Property Damage. Any damage, destruction, or
loss to the business or properties of AIX (whether or not covered
by insurance) that could reasonably be expected to have a
Material Adverse Effect on AIX;
2.1.9.3. Dividends. Any declaration, setting aside, or
payment of any dividend or other distribution in respect of the
common stock of AIX, or any direct or indirect redemption,
purchase or any other acquisition by AIX of any such stock;
2.1.9.4. Capitalization Change. Any change in the
capital stock or in the number of shares or classes of AIX's
authorized or outstanding capital stock as described in Paragraph
2.1.3;
2.1.9.5. Labor Disputes. Any labor dispute (other than
routine grievances); or
2.1.9.6. Other Material Changes. Any other event or
condition known to AIX particularly pertaining to and adversely
affecting the operations, assets or business of AIX (other than
events or conditions which are of a general or industry-wide
nature and of general public knowledge) which could reasonably be
expected to have a Material Adverse Effect on AIX.
2.1.10. Taxes. Except as set forth in Schedule 2.1.10
[omitted], and except with respect to failures which, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect on
AIX, proper and accurate Federal, state and local income, value added,
sales, use, franchise, gross revenue, turnover, excise, payroll,
property, employment, customs duties and any and all other tax returns,
reports, and estimates have been filed with appropriate governmental
agencies, domestic and foreign, by AIX for each period for which any
returns, reports, or estimates were due (taking into account any
extensions of time to file before the date hereof); all taxes shown by
such returns to be payable and any other taxes due and payable have been
paid other than those being contested in good faith by AIX; and the tax
provision reflected in AIX's most recent balance sheet included in the
AIX Reports is
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adequate, in accordance with generally accepted accounting principles,
to cover liabilities of AIX at the date thereof for all taxes, including
any interest, penalties and additions to taxes of any character
whatsoever applicable to AIX or its assets or business. Except as set
forth on Schedule 2.1.10 [omitted], no waiver of any statute of
limitations executed by AIX with respect to federal or state income or
other tax is in effect for any period. The Federal income tax returns
of AIX have never been examined by the Internal Revenue Service. There
are no tax liens on any assets of AIX except for taxes not yet currently
due and those which could not reasonably be expected to have a Material
Adverse Effect on AIX.
2.1.11. Intellectual Property. Except as set forth in Schedule
2.1.11 [omitted], AIX owns or possesses licenses to use all patents,
patent applications, trademarks and service marks (including
registrations and applications therefor), trade names, copyrights and
written know-how, trade secrets and all other similar proprietary data
and the goodwill associated therewith (collectively, the "Intellectual
Property") that are either material to the business of AIX or that are
necessary for the manufacture, use or sale of any products manufactured,
used or sold by AIX. The AIX Intellectual Property is owned or licensed
by AIX free and clear of any Encumbrance other than such Encumbrances as
are listed in Schedule 2.1.11 [omitted]. Except as otherwise indicated
in such Schedule, AIX has not granted to any other person any license to
use any Intellectual Property. AIX has not received any notice of
infringement, misappropriation, or conflict with, the intellectual
property rights of others in connection with the use by AIX of the AIX
Intellectual Property.
2.1.12. Title to Properties. With minor exceptions which in the
aggregate are not material, and except for merchandise and other
property sold, used or otherwise disposed of in the ordinary course of
business for fair value, AIX has good and marketable title to all its
properties, interests in properties and assets, real and personal,
reflected in the most recent balance sheet of AIX included in the AIX
Reports, free and clear of any Encumbrance of any nature whatsoever,
except (i) liens and Encumbrances reflected in the most recent balance
sheet of AIX included in the AIX Reports, (ii) liens for current taxes
not yet due and payable, and (iii) such imperfections of title,
easements and Encumbrances, if any, as are not substantial in character,
amount, or extent and do not and will not materially detract from the
value, or interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair business
operations. All leases pursuant to which AIX leases (whether as lessee
or lessor) any substantial amount of real or personal property are in
good standing, valid, and effective; and there is not, under any such
leases, any existing or prospective default or event of default or event
which with notice or lapse of time, or both, would constitute a default
by AIX and in respect to which AIX has not taken adequate steps to
prevent a default from occurring. The buildings and premises of AIX
that are used in its business are in good operating condition and
repair, subject only to ordinary wear and tear. All major items of
equipment of AIX are in good operating condition and in a state of
reasonable maintenance and repair, ordinary wear and tear excepted, and
are free from any known defects except as may be repaired by routine
maintenance and such minor defects as
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do not substantially interfere with the continued use thereof in the
conduct of normal operations.
2.1.13. Litigation. Except to the extent set forth in the AIX
Reports or in Schedule 2.1.13 [omitted], there is no suit, action, or
legal, administrative, arbitration, or other proceeding or governmental
investigation pending to which AIX is a party or, to the knowledge of
AIX, might become a party or which particularly affects AIX, nor is any
change in the zoning or building ordinances directly affecting the real
property or leasehold interests of AIX, pending or, to the knowledge of
AIX, threatened.
2.1.14. Environmental Compliance. Except as set forth in
Schedule 2.1.14 [omitted];
2.1.14.1. Environmental Conditions. There are no
environmental conditions or circumstances, such as the presence
or release of any hazardous substance, on any real property owned
by AIX that could reasonably be expected to have a Material
Adverse Effect on AIX.
2.1.14.2. Permits, etc. AIX has in full force and
effect all environmental permits, licenses, approvals and other
authorizations required to conduct its operations and is
operating in material compliance thereunder.
2.1.14.3. Compliance. AIX's operations and use of its
assets do not violate any applicable federal, state or local law,
statute, ordinance, rule, regulation, order or notice requirement
pertaining to (a) the condition or protection of air,
groundwater, surface water, soil, or other environmental media,
(b) the environment, including natural resources or any activity
which affects the environment, or (c) the regulation of any
pollutants, contaminants, waste, substances (whether or not
hazardous or toxic), including, without limitation, the
Comprehensive Environmental Response Compensation and Liability
Act (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 1609
et seq.), the Clean Water Act (33 U.S.C. 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
Substances Control Act (17 U.S.C. Section 2601 et seq.), the
Safe Drinking Water Act (42 U.S.C. Section 201 and Section 300f
et seq.), the Rivers and Harbors Act (33 U.S.C. Section 401 et
seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.)
and analogous state and local provisions, as any of the foregoing
may have been amended or supplemented from time to time
(collectively the "Applicable Environmental Laws"), except for
violations which, either singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on AIX.
2.1.14.4. Environmental Claims. No notice has been
served on AIX from any entity, governmental agency or individual
regarding any existing, pending or threatened investigation or
inquiry related to alleged violations under any Applicable
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Environmental Laws, or regarding any claims for remedial
obligations or contribution under any Applicable Environmental
Laws, other than any of the foregoing which, either singly or in
the aggregate, could not reasonably be expected to have a
Material Adverse Effect on AIX.
2.1.14.5. Renewals. AIX does not know of any reason
ITEQ would not be able to renew any of the permits, licenses, or
other authorizations required pursuant to any Applicable
Environmental Laws to operate and use any of AIX's assets for
their current purposes and uses.
2.1.15. Compliance with Other Laws. Except as set forth in the
AIX Reports or in Schedule 2.1.15 [omitted], AIX is not in violation of
or in default with respect to, or in alleged violation of or alleged
default with respect to, the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) as amended ("OSHA"), or any other applicable
law or any applicable rule, regulation, or any writ or decree of any
court or any governmental commission, board, bureau, agency, or
instrumentality, or delinquent with respect to any report required to be
filed with any governmental commission, board, bureau, agency or
instrumentality, except for violations which, either singly or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect on AIX.
2.1.16. Finder's Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on
by AIX and its counsel directly with ITEQ and its counsel, without the
intervention of any other person as the result of any act of AIX, and so
far as is known to AIX, without the intervention of any other person in
such manner as to give rise to any valid claim against any of the
parties hereto for a brokerage commission, finder's fee or any similar
payments, other than financial advisory fees to be paid (i) by ITEQ to
Xxxxxxx & Company International, Inc. ("Xxxxxxx") and Deutsche Xxxxxx
Xxxxxxxx ("DMG") in connection with the transaction (including the
rendition of a fairness opinion to ITEQ) and (ii) by AIX to Xxxxxxxx
Xxxxxx Refsnes, Inc. ("RPR") under financial arrangements approved in
advance by ITEQ for the rendition of a fairness opinion to AIX in
connection with the merger contemplated by this Agreement.
2.1.17. Compliance with ERISA. AIX has made available to ITEQ a
copy of each AIX Plan, any related trust agreement and annuity or
insurance contract, if any, and each plan's most recent annual report
filed with the Internal Revenue Service, if any, and: (i) each AIX Plan
has been maintained and administered in material compliance with its
terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, and is, to the extent required
by applicable law or contract, fully funded without having any deficit
or unfunded actuarial liability; (ii) all required employer
contributions under any such plans have been made and the applicable
funds have been funded in accordance with the terms thereof and no past
service funding liabilities exist thereunder; (iii) each AIX Plan that
is required or intended to be qualified under applicable law or
registered or approved by a governmental agency or authority has been so
qualified, registered or
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approved by the appropriate governmental agency or authority, and
nothing has occurred since the date of the last qualification,
registration or approval to materially and adversely affect, or cause,
the appropriate governmental agency or authority to revoke such
qualification, registration or approval; (iv) to the extent applicable,
the AIX Plans comply, in all material respects, with the requirements of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Code, and any AIX Plan intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue
Service to be so qualified and nothing has occurred to cause the loss of
such qualified status; (v) no AIX Plan is covered by Title IV of ERISA
or Section 412 of the Code; (vi) there are no pending or anticipated
material claims against or otherwise involving any of the AIX Plans and
no suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of AIX Plan activities) has been brought
against or with respect to any AIX Plan; (vii) all material
contributions, reserves or premium payments, required to be made as of
the date hereof to the AIX Plans have been made or provided for; (viii)
AIX has not incurred any liability under subtitle C or D of Title IV of
ERISA with respect to any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by AIX or
any entity which is considered one employer with AIX under Section 4001
of ERISA; (ix) AIX has not incurred any withdrawal liability under
Subtitle E of Title IV of ERISA with respect to any "multiemployer
plan," within the meaning of Section 4001(a)(3) of ERISA; and (x) AIX
has no obligations for retiree health and life benefits under any AIX
Plan, except as set forth on Schedule 2.1.17 [omitted], and there are no
restrictions on the rights of AIX to amend or terminate any such AIX
Plan without incurring any liability thereunder.
2.1.18. Investigations; Litigation. Except as required
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1978 and
the rules and regulations promulgated thereunder (collectively, "HSR")
and any applicable comparable foreign laws and regulations, (i) no
investigation or review by any governmental entity with respect to AIX
or any of the transactions contemplated by this Agreement is pending or,
to the best of AIX's knowledge, threatened, nor has any governmental
entity indicated to AIX an intention to conduct the same, and (ii) there
is no action, suit or proceeding pending or, to the best of AIX's
knowledge, threatened against or affecting AIX at law or in equity, or
before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, which either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on AIX.
2.1.19. Product Warranty. There are no existing liabilities or,
to the knowledge of AIX, potential liabilities, arising from claims
regarding the performance or design of the products and services sold by
AIX either in the past or at present that in the aggregate could
reasonably be expected to have a Material Adverse Effect on AIX.
2.1.20. Information for Proxy Statement. All information and
data (including financial statements) concerning AIX which is or will be
included in the registration
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statement and proxy statement (collectively, the "Proxy Statement")
issued in connection with the transactions contemplated by this
Agreement will be furnished by AIX for inclusion therein and will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained
therein not misleading.
2.1.21. Investment Company. AIX is not an "investment company,"
or an "affiliated person of" or "promoter" or "principal underwriter" of
an investment company, as those terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ITEQ
3.1. Representations and Warranties of ITEQ. ITEQ represents and
warrants as follows:
3.1.1. Organization and Standing. ITEQ is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, has full requisite corporate power and authority to
carry on its business as it is currently conducted, and to own and
operate the properties currently owned and operated by it, and is duly
qualified or licensed to do business and is in good standing as a
foreign corporation authorized to do business in all jurisdictions in
which the character of the properties owned or the nature of the
business conducted by it would make such qualification or licensing
necessary, except where the failure to be so qualified or licensed could
not reasonably be expected to have a Material Adverse Effect on ITEQ.
3.1.2. Agreement Authorized and its Effect on Other Obligations.
Upon approval of this Agreement by the stockholders of ITEQ, the
consummation of the transactions contemplated hereby will have been duly
and validly authorized by all necessary corporate action on the part of
ITEQ, and this Agreement will be a valid and binding obligation of ITEQ
enforceable against ITEQ (subject to normal equitable principles) in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, debtor relief or similar laws
affecting the rights of creditors generally. At the Effective Date and
except as specified in Schedule 3.1.2 [omitted], the consummation of the
merger contemplated by this Agreement will not conflict with or result
in a violation or breach of any term or provision of, nor constitute a
default under (i) the certificate of incorporation or bylaws of ITEQ or
(ii) any obligation, indenture, mortgage, deed of trust, lease, contract
or other agreement to which ITEQ or any of its subsidiaries is a party
or by which any of them or their properties are bound, other than such
violations, breaches or defaults as could not reasonably be expected to
have Material Adverse Effect on ITEQ.
3.1.3. Capitalization. The capitalization of ITEQ consists of
1,000,000 shares of preferred stock, par value $.01 per share, of which
at June 30, 1997 no shares were issued
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or outstanding; and 30,000,000 shares of ITEQ Common Stock, par value
$.001 per share, of which at June 30, 1997, 16,966,231 shares were
issued and outstanding, 1,052,325 shares were reserved for issuance in
connection with options outstanding under various ITEQ benefit plans and
another 1,927,221 shares were reserved for issuance upon exercise of
outstanding warrants; at the same date, 791 shares of ITEQ Common Stock
were held in ITEQ's treasury.
3.1.4. Subsidiaries. All outstanding shares of stock of the
subsidiary corporations owned by ITEQ are validly issued, fully paid,
and nonassessable, ITEQ has good and marketable title thereto free and
clear of any Encumbrance, except as specified in Schedule 3.1.4
[omitted], and ITEQ owns all outstanding shares of stock of said
subsidiary corporations. Each such subsidiary is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction under which it is incorporated and has full requisite
corporate power and authority to own its property and carry on its
business as presently conducted by it and is, or on the Effective Date
will be, duly qualified or licensed to do business and is, or on the
Effective Date will be, in good standing as a foreign corporation
authorized to do business in all jurisdictions in which the character of
the properties owned or the nature of the business conducted makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed could not reasonably be expected to have a
Material Adverse Effect on ITEQ. As hereinafter used in this Article
III, the term "ITEQ" also includes any and all of its directly and
indirectly held subsidiaries, except where the context indicates to the
contrary.
3.1.5. Reports and Financial Statements. ITEQ has previously
furnished to AIX true and complete copies of (a) all annual reports
filed with the Commission pursuant to the Exchange Act, since December
31, 1994, (b) ITEQ's quarterly and other reports filed with the
Commission since December 31, 1994, (c) all definitive proxy
solicitation materials filed with the Commission since December 31,
1994, and (d) any registration statements declared effective by the
Commission since December 31, 1994. The consolidated financial
statements of ITEQ and its subsidiaries included in ITEQ's most recent
report on Form 10-K and most recent report on Form 10-Q, and any other
reports filed with the Commission by ITEQ under the Exchange Act (the
"ITEQ Reports") were, or (if filed after the date hereof) will be,
prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved and fairly
present, or will present, the consolidated financial position for ITEQ
and its subsidiaries as of the dates thereof and the consolidated
results of their operations and changes in financial position for the
periods then ended (except with respect to interim period financial
statements, for normal year-end adjustments which are not material); and
the ITEQ Reports did not and will not 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 therein, in light of the
circumstances under which they were made, not misleading. Since
December 31, 1994, ITEQ has filed with the Commission all reports
required to be filed by ITEQ under the Exchange Act and the rules and
regulations of the Commission.
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3.1.6. Liabilities. ITEQ does not have any liabilities or
obligations, either accrued, absolute, contingent, or otherwise, or have
any knowledge of any potential liabilities or obligations, which would
have a Material Adverse Effect on ITEQ, other than those (i) disclosed
in the ITEQ Reports or (ii) set forth on Schedule 3.1.6 hereto
[omitted].
3.1.7. No Undisclosed Defaults. Except as may be specified in
the ITEQ Reports or in Schedule 3.1.7 [omitted], ITEQ is not a party to,
or bound by, any material contract or arrangement of any kind to be
performed after the Effective Date, nor is ITEQ in default in any
material obligation or covenant on its part to be performed under any
material obligation, lease, contract, order, plan or other arrangement
except as identified in Schedule 3.1.7 [omitted].
3.1.8. Absence of Certain Changes and Events in ITEQ. Except as
set forth in Schedule 3.1.8 hereto [omitted], other than as a result of
the transactions contemplated by this Agreement, since March 31, 1997,
there has not been:
3.1.8.1. Financial Change. Any adverse change in the
financial condition, operations, assets or business of ITEQ which
could reasonably be expected to have a Material Adverse Effect on
ITEQ;
3.1.8.2. Property Damage. Any material damage,
destruction, or loss to the business or properties of ITEQ
(whether or not covered by insurance);
3.1.8.3. Dividends. Any declaration, setting aside, or
payment of any dividend or other distribution in respect of
ITEQ's capital stock, or any direct or indirect redemption,
purchase or any other acquisition of such stock;
3.1.8.4. Capitalization Change. Any change in the
capital stock or in the number of shares or classes of ITEQ's
authorized or outstanding capital stock as described in Paragraph
3.1.3;
3.1.8.5. Labor Disputes. Any labor dispute (other than
routine grievances); or
3.1.8.6. Other Material Changes. Any other event or
condition known to ITEQ particularly pertaining to and adversely
affecting the operations, assets or business of ITEQ (other than
events or conditions which are of a general or industry-wide
nature and of general public knowledge) which could reasonably be
expected to have a Material Adverse Effect on ITEQ.
3.1.9. Taxes. Except as set forth in Schedule 3.1.9 [omitted],
and except with respect to failures which in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on ITEQ, proper
and accurate Federal, state and local income, value added,
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sales, use, franchise, gross revenue, turnover, excise, payroll,
property, employment, customs duties and any and all other tax returns,
reports, and estimates have been filed with appropriate governmental
agencies, domestic and foreign, by ITEQ for each period for which any
returns, reports, or estimates were due (taking into account any
extensions of time to file before the date hereof); all taxes shown by
such returns to be payable and any other taxes due and payable have been
paid other than those being contested in good faith by ITEQ; and the tax
provision reflected in ITEQ's most recent balance sheet included in the
ITEQ Reports is adequate, in accordance with generally accepted
accounting principles, to cover liabilities of ITEQ at the date thereof
for all taxes, including any interest, penalties and additions to taxes
of any character whatsoever applicable to ITEQ or its assets or
business. Except as set forth on Schedule 3.1.9 [omitted], no waiver of
any statute of limitations executed by ITEQ with respect to Federal or
state income or other tax is in effect for any period. The Federal
income tax returns of ITEQ have never been examined by the Internal
Revenue Service, but notice with respect to an audit of the year ended
December 31, 1994 has been received by ITEQ. There are no tax liens on
any assets of ITEQ except for taxes not yet currently due and those
which could not reasonably be expected to have a Material Adverse Effect
on ITEQ.
3.1.10. Intellectual Property. Except as set forth in Schedule
3.1.10 [omitted], ITEQ owns or possesses licenses to use all ITEQ
Intellectual Property that is either material to the business of ITEQ or
that is necessary for the manufacture, use or sale of any products
manufactured, used or sold by ITEQ. The ITEQ Intellectual Property is
owned or licensed by ITEQ free and clear of any Encumbrance other than
such Encumbrances as are listed in Schedule 3.1.10 [omitted]. Except as
otherwise indicated in such Schedule, ITEQ has not granted to any other
person any license to use any ITEQ Intellectual Property. ITEQ has not
received any notice of infringement, misappropriation, or conflict with,
the intellectual property rights of others in connection with the use by
ITEQ of the ITEQ Intellectual Property.
3.1.11. Title to Properties. With minor exceptions which in the
aggregate are not material, and except for merchandise and other
property sold, used or otherwise disposed of in the ordinary course of
business for fair value, ITEQ has good and marketable title to all its
properties, interests in properties and assets, real and personal,
reflected in the most recent financial statements contained in the ITEQ
Reports, free and clear of any Encumbrance of any nature whatsoever,
except (i) liens and Encumbrances reflected in the most recent balance
sheet of ITEQ included in the ITEQ Reports, (ii) liens for current taxes
not yet due and payable, and (iii) such imperfections of title,
easements and Encumbrances, if any, as are not substantial in character,
amount, or extent and do not and will not materially detract from the
value, or interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair business
operations. All leases pursuant to which ITEQ leases (whether as lessee
or lessor) any substantial amount of real or personal property are in
good standing, valid, and effective; and there is not, under any such
leases, any existing or prospective default or event of default or event
which with notice or lapse of time, or both,
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would constitute a default by ITEQ and in respect to which ITEQ has not
taken adequate steps to prevent a default from occurring. The
buildings and premises of ITEQ that are used in its business are in good
operating condition and repair, subject only to ordinary wear and tear.
All major items of equipment of ITEQ are in good operating condition and
in a state of reasonable maintenance and repair, ordinary wear and tear
excepted, and are free from any known defects except as may be repaired
by routine maintenance and such minor defects as to not substantially
interfere with the continued use thereof in the conduct of normal
operations.
3.1.12. Litigation. Except to the extent set forth in the ITEQ
Reports or in Schedule 3.1.12 [omitted], there is no suit, action, or
legal, administrative, arbitration, or other proceeding or governmental
investigation pending to which ITEQ is a party or, to the knowledge of
ITEQ, might become a party or which particularly affects ITEQ, nor is
any change in the zoning or building ordinances directly affecting the
real property or leasehold interests of ITEQ, pending or, to the
knowledge of ITEQ, threatened.
3.1.13. Environmental Compliance. Except as set forth in
Schedule 3.1.13 [omitted];
3.1.13.1. Environmental Conditions. There are no
environmental conditions or circumstances such as the presence or
release of any hazardous substance on any real property owned by
ITEQ that could reasonably be expected to have a Material Adverse
Effect on ITEQ.
3.1.13.2. Permits, etc. ITEQ has in full force and
effect all environmental permits, licenses, approvals and other
authorizations required to conduct its operations and is
operating in material compliance thereunder.
3.1.13.3. Compliance. ITEQ's operations and use of its
assets do not violate any Applicable Environmental Laws, except
for violations which, either singly or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect on
ITEQ.
3.1.13.4. Environmental Claims. No notice has been
served on ITEQ from any entity, governmental agency or individual
regarding any existing, pending or threatened investigation or
inquiry related to alleged violations under any Applicable
Environmental Laws, or regarding any claims for remedial
obligations or contribution under any Applicable Environmental
Laws, other than any of the foregoing which, either singly or in
the aggregate, could not reasonably be expected to have a
Material Adverse Effect on ITEQ.
3.1.13.5. Renewals. ITEQ does not know of any reason
ITEQ would not be able to renew any of the permits, licenses, or
other authorizations required pursuant
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to any Applicable Environmental Laws to operate and use any of
ITEQ's assets for their current purposes and uses.
3.1.14. Compliance with Other Laws. Except as set forth in the
ITEQ Reports or in Schedule 3.1.14 [omitted], ITEQ is not in violation
of or in default with respect to, or in alleged violation of or alleged
default with respect to, OSHA or any other applicable law or any
applicable rule, regulation, or any writ or decree of any court or any
governmental commission, board, bureau, agency, or instrumentality, or
delinquent with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality,
except for violations which, either singly or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect on ITEQ.
3.1.15. Finder's Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on
by ITEQ and its counsel, directly with AIX or its counsel, without the
intervention of any other person as the result of an act of ITEQ and, so
far as known to ITEQ, without the intervention of any other person in
such manner as to give rise to any valid claim against any of the
parties hereto for a brokerage commission, finder's fee, or any similar
payments, other than financial advisory fees to be paid by (i) ITEQ to
Xxxxxxx and DMG and (ii) AIX to RPR in connection with the merger
contemplated by this Agreement.
3.1.16. Compliance With ERISA. All bonus, incentive
compensation, stock option, deferred compensation, profit-sharing,
retirement, pension, welfare, group insurance, death benefit, or other
fringe benefit plans, arrangements or trust agreements covering active,
former or retired employees of ITEQ (collectively, the "ITEQ Plans") are
listed in Schedule 3.1.16 [omitted]. ITEQ has made available to AIX a
copy of each ITEQ Plan, any related trust agreement and annuity or
insurance contract, if any, and each plan's most recent annual report
filed with the Internal Revenue Service, if any, the most recent reports
with respect to such plans, trust agreements and annuity or insurance
contracts filed with any governmental agency, all Internal Revenue
Service determination letters that have been received with respect to
such plans and: (i) each ITEQ Plan has been maintained and administered
in material compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations, and is, to the extent required by applicable law or
contract, fully funded without having any deficit or unfunded actuarial
liability; (ii) all required employer contributions under any such plans
have been made and the applicable funds have been funded in accordance
with the terms thereof and no past service funding liabilities exist
thereunder; (iii) each ITEQ Plan that is required or intended to be
qualified under applicable law or registered or approved by a
governmental agency or authority has been so qualified, registered or
approved by the appropriate governmental agency or authority, and
nothing has occurred since the date of the last qualification,
registration or approval to adversely affect, or cause, the appropriate
governmental agency or authority to revoke such qualification,
registration or approval; (iv) to the extent applicable, the ITEQ Plans
comply, in all material respects, with the requirements of ERISA
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and the Code, and any ITEQ Plan intended to be qualified under Section
401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified and nothing has occurred to cause the loss of such
qualified status; (v) no ITEQ Plan is covered by Title IV of ERISA or
Section 412 of the Code; (vi) there are no pending or anticipated
material claims against or otherwise involving any of the ITEQ Plans and
no suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of ITEQ Plan activities) has been
brought against or with respect to any ITEQ Plan; (vii) all material
contributions, reserves or premium payments, required to be made as of
the date hereof to the ITEQ Plans have been made or provided for; (viii)
ITEQ has not incurred any liability under subtitle C or D of Title IV of
ERISA with respect to any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by ITEQ
or any entity which is considered one employer with ITEQ under Section
4001 of ERISA; (ix) ITEQ has not incurred any withdrawal liability under
Subtitle E of Title IV of ERISA with respect to any "multiemployer
plan," within the meaning of Section 4001(a)(3) of ERISA; and (x) ITEQ
does not have any obligations for retiree health and life benefits under
any ITEQ Plan, except as set forth on Schedule 3.1.16 [omitted], and
there are no restrictions on the rights of ITEQ to amend or terminate
any such ITEQ Plan without incurring any liability thereunder.
3.1.17. Investigations; Litigation. Except as required pursuant
to HSR and any applicable comparable foreign laws and regulations, (i)
no investigation or review by any governmental entity with respect to
ITEQ in connection with any of the transactions contemplated by this
Agreement is pending or, to the best of ITEQ's knowledge, threatened,
nor has any governmental entity indicated to ITEQ an intention to
conduct the same and (ii) there is no action, suit or proceeding pending
or, to the best of ITEQ's knowledge, threatened against or affecting
ITEQ or its subsidiaries at law or in equity, or before any federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, which either individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect on ITEQ.
3.1.18. Product Warranty. There are no existing liabilities or,
to the knowledge of ITEQ, potential liabilities, arising from claims
regarding the performance or design of the products sold by ITEQ either
in the past or at present that in the aggregate could reasonably be
expected to have a Material Adverse Effect on ITEQ.
3.1.19. Information for Proxy Statement. All information and
data (including financial statements) concerning ITEQ which is or will
be included in the Proxy Statement to be issued in connection with the
transactions contemplated by this Agreement will be furnished by ITEQ
for inclusion therein and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained therein not misleading.
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3.1.20. Investment Company. ITEQ is not an "investment
company," or an "affiliated person of" or "promoter" or "principal
underwriter" of an investment company, as those terms are defined in the
Investment Company Act.
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE DATE
4.1. Agreements of ITEQ and AIX. Each of ITEQ and AIX agrees that
from the date hereof to the Effective Date, it will:
4.1.1. Maintenance of Present Business. Other than as
contemplated by this Agreement, operate its business only in the usual,
regular, and ordinary manner so as to maintain the goodwill it now
enjoys and, to the extent consistent with such operation, use all
reasonable efforts to preserve intact its present business organization,
keep available the services of its present officers and employees, and
preserve its relationships with customers, suppliers, jobbers,
distributors, and others having business dealings with it;
4.1.2. Maintenance of Properties. At its expense, maintain all
of its property and assets in customary repair, order, and condition,
reasonable wear and use and damage by fire or unavoidable casualty
excepted;
4.1.3. Maintenance of Books and Records. Maintain its books of
account and records in the usual, regular, and ordinary manner, in
accordance with generally accepted accounting principles applied on a
consistent basis;
4.1.4. Compliance with Law. Duly comply in all material respects
with all laws applicable to it and to the conduct of its business; and
4.1.5. Compliance with Agreement. At its expense, take all
commercially reasonable actions as may be necessary (i) to insure that
the representations and warranties made by it herein are true and
correct at the Effective Date, (ii) to fully perform all covenants made
by it herein and (iii) to satisfy timely all other obligations imposed
upon it by this Agreement (including, without limitation, the obligation
from the date of this Agreement to take no action which either alone or
in combination with actions previously taken would disqualify the merger
from "pooling of interests" accounting treatment).
4.1.6. Inspection of Each Merging Corporation. Permit the other
party hereto, and their officers and authorized representatives, during
normal business hours, to inspect its records and to consult with its
officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties
hereinabove made and the compliance with covenants contained in this
Agreement.
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4.2. Additional Agreements of ITEQ and AIX. ITEQ and AIX agree to
take the following actions after the date hereof:
4.2.1. Xxxx-Xxxxx-Xxxxxx. Each party shall file such materials
as are required under the HSR Act with respect to the transaction
contemplated hereby and shall cooperate with the other party to the
extent necessary to assist the other party in the preparation of such
filings.
4.2.2. Proxy Statement. ITEQ and AIX shall cooperate in the
preparation and prompt filing of the Proxy Statement with the Commission
with respect to the meetings of their stockholders called for the
purpose of, among other things, securing stockholder approval of the
merger contemplated by this Agreement and the consummation of the
transaction herein contemplated. Each of ITEQ and AIX shall use all
reasonable efforts to have the Proxy Statement cleared by the
Commission.
4.2.3. Notice of Material Developments. Each of ITEQ and AIX
will promptly notify the other party in writing of (i) any event
occurring subsequent to the date of this Agreement which would render
any representation or warranty of such party contained in this Agreement
untrue or inaccurate in any material respect, (ii) any Material Adverse
Effect on such party and (iii) breach by such party of any covenant or
agreement contained in this Agreement.
4.3. Additional Agreements of AIX. AIX agrees that from the date
hereof to the Effective Date, it will:
4.3.1. Prohibition of Certain Employment Contracts. Not enter
into any contracts of employment which (i) cannot be terminated on
notice of 14 days or less or (ii) provide for any severance payments or
benefits covering a period beyond the termination date (other than those
which ITEQ has previously approved) except as may be required by law;
4.3.2. Prohibition of Certain Loans. Not incur any borrowings
except (i) the refinancing of indebtedness now outstanding or additional
borrowings under its existing revolving credit facilities, (ii) the
prepayment by customers of amounts due or to become due for goods sold
or services rendered or to be rendered in the future, (iii) trade
payables incurred in the ordinary course of business, (iv) other
borrowings incurred in the ordinary course of business to finance normal
operations or (v) as is otherwise agreed to in writing by ITEQ;
4.3.3. Prohibition of Certain Commitments. Not enter into
commitments of a capital expenditure nature or incur any contingent
liability which would exceed $1,000,000, in the aggregate, except (i) as
may be necessary for the maintenance of existing facilities, machinery
and equipment in good operating condition and repair in the ordinary
course of business, (ii) as may be required by law or (iii) as is
otherwise agreed to in writing by ITEQ;
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4.3.4. Disposal of Assets. Not sell, dispose of, or encumber,
any property or assets, except (i) in the ordinary course of business or
(ii) as is otherwise agreed to in writing by ITEQ;
4.3.5. Maintenance of Insurance. Maintain insurance (or self
insurance reserves) upon all its properties and with respect to the
conduct of its business of such kinds and in such amounts as is
customary in the type of business in which it is engaged, but not less
than that presently carried by it, which insurance (or self insurance
reserves) may be added to from time to time in its discretion; provided,
that if during the period from the date hereof to and including the
Effective Date any of its property or assets are damaged or destroyed by
fire or other casualty, the obligations of ITEQ and AIX under this
Agreement shall not be affected thereby (subject, however, to the
provision that the coverage limits of such policies are adequate in
amount to cover the replacement value of such property or assets and
loss of profits during replacement, less commercially reasonable
deductibles, if of material significance to the assets or operations of
AIX) but it shall promptly notify ITEQ in writing thereof and proceed
with the repair or restoration of such property or assets in such manner
and to such extent as may be approved by ITEQ, and upon the Effective
Date all proceeds of insurance and claims of every kind arising as a
result of any such damage or destruction shall remain the property of
Surviving Corporation;
4.3.6. AIX Acquisition Proposals. Not directly or indirectly:
4.3.6.1. No Solicitation. Authorize or permit any of its
respective agents to: (i) solicit, initiate, encourage
(including by way of furnishing information) or take any other
action to facilitate, any inquiry or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any
acquisition or purchase of a substantial amount of assets of, or
an equity interest of 30% or more in, AIX or any merger,
consolidation, business combination, sale of substantially all
assets, sale of securities, recapitalization, liquidation,
dissolution or similar transaction involving AIX (other than the
transactions contemplated by this Agreement) or any other
material corporate transaction the consummation of which would,
or could reasonably be expected to, impede, interfere with,
prevent or materially delay the merger contemplated by this
Agreement (collectively, "AIX Transaction Proposals") or agree to
or endorse any AIX Transaction Proposal or (ii) propose, enter
into or participate in any discussions or negotiations regarding
any of the foregoing, or furnish to another person any
information with respect to its business, properties or assets or
any of the foregoing, or otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage, an effort or
attempt by any other person to do or seek any of the foregoing,
provided, however, that the foregoing clauses (i) and (ii) shall
not prohibit AIX from (A) furnishing information pursuant to an
appropriate confidentiality letter concerning AIX and its
businesses, properties or assets to a third party who has made a
Superior AIX Transaction Proposal (as defined below), (B)
engaging in discussions or negotiations with a third party who
has made a Superior
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AIX Transaction Proposal or (C) following receipt of a Superior
AIX Transaction Proposal, taking and disclosing to its
stockholders a position with respect thereto or changing the
recommendation by AIX's board of directors but in each case
referred to in the foregoing clauses (A) through (C) only after
the board of directors of AIX concludes in good faith following
advice of its outside counsel that such action is reasonably
necessary in order for the board of directors of AIX to comply
with its fiduciary obligations to stockholders under applicable
law. If the board of directors of AIX receives an AIX
Transaction Proposal, then AIX shall immediately inform ITEQ of
the terms and conditions of such proposal and the identity of the
person making it and shall keep ITEQ fully informed of the status
and details of any such AIX Transaction Proposal and of all steps
it is taking in response to such AIX Transaction Proposal;
provided that nothing contained in this Paragraph 4.3.6.1 shall
prohibit AIX or its board of directors from making such
disclosure to AIX's stockholders or taking any action which, in
the good faith judgment of AIX's board of directors, may be
required under applicable law, including Rules 14d-9 and 14e-2
promulgated under the Exchange Act. For purposes of this
Agreement, the term "Superior AIX Transaction Proposal" shall
mean a bona fide AIX Transaction Proposal that the board of
directors of AIX determines in good faith after consultation with
(and based in part on the advice of) its independent financial
advisors to be more favorable to AIX's stockholders than the
merger contemplated by this Agreement, is reasonably capable of
being financed and is not subject to any material contingencies
relating to financing.
4.3.6.2. Acceptance of Superior AIX Transaction
Proposals. If (i) (A) this Agreement is terminated by AIX
pursuant to Paragraph 6.1.5 hereof, (B) AIX shall violate the
covenant set forth in Paragraph 4.3.6.1 hereof, or (C) AIX
modifies or withdraws its board of directors' recommendation in
favor of the transactions contemplated by this Agreement or (ii)
AIX enters into an agreement which provides for Another AIX
Transaction (as defined below) or Another AIX Transaction is
consummated (in each case with any third party which after the
date of this Agreement and before termination of this Agreement
has communicated to it an AIX Transaction Proposal), in either
case within twelve months after the date of termination of this
Agreement, then, in any such event, AIX shall pay to ITEQ within
two days after demand by ITEQ in the case of the occurrence of
any of the events specified in clause (i) above, and immediately
upon the first to occur of the entering into an agreement
providing for, or the consummation of, Another AIX Transaction in
the case of clause (ii) above (by wire transfer of immediately
available funds to an account designated by ITEQ for such
purpose), a fee (the "Break-Up Fee") in an amount equal to
$2,500,000. AIX agrees that the Break-Up Fee is a reasonable
determination, in light of the uncertainty and difficulty of
ascertaining the exact amount thereof, of the loss that ITEQ
would actually sustain in respect of one of the events described
in this Paragraph 4.3.6.2. For purposes of this Paragraph
4.3.6.2, the term "Another AIX Transaction" shall mean any
transaction pursuant to which
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(i) any person, entity or group (within the meaning of Section
13(d)(3) of the Exchange Act) (each, a "Third Party") acquires
50% or more of the outstanding AIX Common Stock, (ii) a Third
Party acquires 25% or more of the total assets of AIX taken as a
whole, (iii) a Third Party merges, consolidates or combines in
any other way with AIX other than in a transaction in which
holders of AIX Common Stock continue to own at least 75% of the
equity of the surviving corporation, or (iv) AIX distributes or
transfers to its stockholders, by dividend or otherwise, assets
constituting 25% or more of the market value or earning power of
AIX on a consolidated basis (it being understood that stock of
subsidiaries constitute assets of AIX for purposes of this
Paragraph 4.3.6.2). Notwithstanding anything contained in this
Agreement to the contrary, ITEQ agrees that if AIX pays the
Break-Up Fee to ITEQ in accordance with this Paragraph 4.3.6.2
either because AIX shall have violated the covenant set forth in
Paragraph 4.3.6.1 hereof, or under any other circumstances where
ITEQ has been paid the Break-Up Fee by AIX, then following such
payment AIX shall have no further liability to ITEQ under this
Agreement.
4.3.7. No Amendment to Certificate of Incorporation, etc. Prior
to the receipt by ITEQ of the Break-Up Fee pursuant to Section 4.3.6.2
or without the consent of ITEQ, not amend its certificate of
incorporation or bylaws or other organizational documents or merge or
consolidate with or into any other corporation or change in any manner
the rights of its capital stock or the character of its business;
4.3.8. No Issuance, Sale, or Purchase of Securities. Prior to
the receipt by ITEQ of the Break-Up Fee pursuant to Section 4.3.6.2 or
without the consent of ITEQ, not issue or sell, or issue options or
rights to subscribe to, or enter into any contract or commitment to
issue or sell (upon conversion or otherwise), any shares of its capital
stock or subdivide or in any way reclassify any shares of its capital
stock, or acquire, or agree to acquire, any shares of its capital stock;
provided, that nothing in this Paragraph shall restrict or prohibit the
issuance by AIX of shares of AIX Common Stock upon exercise of options
previously granted under existing benefit plans;
4.3.9. Prohibition on Dividends. Prior to the receipt by ITEQ of
the Break-Up Fee pursuant to Section 4.3.6.2 or without the consent of
ITEQ, not declare or pay any dividend on shares of its capital stock or
make any other distribution of assets to the holders thereof;
4.3.10. Supplemental Financial Statements. Deliver to ITEQ,
within 45 days after the end of each fiscal quarter of AIX beginning
June 30, 1997 and through the Effective Date, unaudited consolidated
balance sheets and related unaudited statements of income, retained
earnings and cash flows as of the end of each fiscal quarter of AIX, and
as of the corresponding fiscal quarter of the previous fiscal year. AIX
hereby represents and warrants that such unaudited consolidated
financial statement shall (i) be complete in all material respects
except for the omission of notes and schedules contained in audited
financial statements, (ii) present fairly the financial condition of AIX
as at the dates indicated and the
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results of operations for the respective periods indicated (except for
normal year-end adjustments which are not material) (iii) shall have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as noted therein and
(iv) shall contain all adjustments which AIX considers necessary for a
fair presentation of its results for each respective fiscal period;
4.3.11. Notice of Material Developments. Promptly furnish to
ITEQ copies of all communications from AIX to its stockholders and all
AIX Reports.
4.3.12. Stockholders' Meeting. Call and hold a meeting of
stockholders within 45 days after the Commission has indicated that it
has no further comments on the Proxy Statement for the purpose of
considering and acting a proposal to approve this Agreement and the
merger contemplated hereby.
4.4. Additional Agreements of ITEQ. ITEQ agrees that from the date
hereof to the Effective Date, it will:
4.4.1. Prohibition of Certain Employment Contracts. Not enter
into any contracts of employment which (i) cannot be terminated on
notice of 14 days or less or (ii) provide for any severance payments or
benefits covering a period beyond the termination date (other than those
which AIX has previously been approved) except as may be required by
law; provided, however, that nothing in this Paragraph shall prohibit
ITEQ from entering into an employment agreement with its chief executive
officer on substantially the terms previously disclosed in writing to
AIX;
4.4.2. Prohibition of Certain Loans. Except as contemplated by
Paragraph 4.4.13, not incur any borrowings except (i) the refinancing of
indebtedness now outstanding, or additional borrowings under its
existing revolving credit facilities, (ii) the prepayment by customers
of amounts due or to become due for goods sold or services rendered or
to be rendered in the future, (iii) trade payables incurred in the
ordinary course of business, (iv) other borrowings incurred in the
ordinary course of business to finance normal operations or (v) as is
otherwise agreed to in writing by AIX;
4.4.3. Prohibition of Certain Commitments. Not enter into
commitments of a capital expenditure nature or incur any contingent
liability which would exceed $1,000,000, in the aggregate, except (i) as
may be necessary for the maintenance of existing facilities, machinery
and equipment in good operating condition and repair in the ordinary
course of business, (ii) as may be required by law or (iii) as is
otherwise agreed to in writing by AIX;
4.4.4. Disposal of Assets. Not sell, dispose of, or encumber,
any property or assets, except (i) in the ordinary course of business or
(ii) as is otherwise agreed to in writing by AIX;
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4.4.5. Maintenance of Insurance. Maintain insurance upon all its
properties and with respect to the conduct of its business of such kinds
and in such amounts as is customary in the type of business in which it
is engaged, but not less than that presently carried by it, which
insurance may be added to from time to time in its discretion; provided,
that if during the period from the date hereof to and including the
Effective Date any of its property or assets are damaged or destroyed by
fire or other casualty, the obligations of ITEQ and AIX under this
Agreement shall not be affected thereby (subject, however, to the
provision that the coverage limits of such policies are adequate in
amount to cover the replacement value of such property or assets and
loss of profits during replacement, less commercially reasonable
deductible, if of material significance to the assets or operations of
ITEQ) but it shall promptly notify AIX in writing thereof and proceed
with the repair or restoration of such property or assets in such manner
and to such extent as may be approved by AIX, and upon the Effective
Date all proceeds of insurance and claims of every kind arising as a
result of any such damage or destruction shall remain the property of
Surviving Corporation;
4.4.6. No Amendment to Certificate of Incorporation, etc. Except
as otherwise provided herein, not amend its certificate of incorporation
or bylaws or other organizational documents or merge into any other
corporation or change in any manner the rights of its Common Stock;
4.4.7. No Issuance, Sale, or Purchase of Securities. Not issue
or sell, or issue options (other than (i) options previously authorized
by the compensation committee of ITEQ's board of directors or (ii)
options granted to new personnel upon commencement of employment) or
rights to subscribe to, or enter into any contract or commitment to
issue or sell (upon conversion or otherwise), any shares of its capital
stock or subdivide or in any way reclassify any shares of its capital
stock, or acquire, or agree to acquire, any shares of its capital stock;
provided, that nothing in this Paragraph shall restrict or prohibit the
issuance by ITEQ of shares of ITEQ Common Stock upon exercise of options
previously granted under existing employee benefit plans, the issuance
of shares of ITEQ Common Stock upon exercise of outstanding warrants, or
the issuance of up to 1,000,000 shares of ITEQ Common Stock in the
acquisition of other businesses in "non-dilutive" (for financial
reporting purposes) transactions if such acquired businesses would not
individually or collectively constitute a "significant subsidiary" of
ITEQ;
4.4.8. Prohibition on Dividends. Not declare or pay any dividend
on shares of its capital stock or make any other distribution of assets
to the holders thereof;
4.4.9. Stockholders' Meeting. Call and hold a meeting of
stockholders within 45 days after the Commission has indicated that it
has no further comments on the Proxy Statement for the purpose of
considering and acting upon proposals to approve this Agreement and the
merger contemplated hereby;
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4.4.10. Issuance of ITEQ Common Stock. Take all action it deems
reasonably necessary to register the "issuance" of ITEQ Common Stock to
the stockholders of AIX in connection with the merger contemplated by
this Agreement under the Securities Act of 1933, as amended (the
"Securities Act"). ITEQ also shall take any action reasonably required
to be taken under state blue sky or securities laws in connection with
the issuance of the ITEQ Common Stock pursuant to the merger;
4.4.11. Listing of ITEQ Stock. Take such steps as are required
to accomplish, as of the Effective Date, the Notification of Additional
Listing of the shares of ITEQ Common Stock to be issued pursuant to this
Agreement on the Nasdaq National Market;
4.4.12. Notice of Material Developments. Promptly furnish to
AIX copies of all communications from ITEQ to its stockholders and all
ITEQ Reports; and
4.4.13. Refinancing of Outstanding Indebtedness. Use all
reasonable commercial efforts to arrange for the payment or assumption
by it of all outstanding debt of AIX on the Effective Date on such terms
as could not reasonably be expected to have a Material Adverse Effect on
ITEQ, including (i) the borrowing by ITEQ of up to an additional
$35,000,000 to fund any such repayment and (ii) the amendment or
refunding of its present long-term and revolving indebtedness (the
"Refinancing").
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. Conditions Precedent to Obligations of AIX. The obligations of
AIX to consummate and effect the merger hereunder shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by AIX in
the manner contemplated by Section 6.4 before the Effective Date:
5.1.1. Representations and Warranties of ITEQ True at Effective
Date. The representations and warranties of ITEQ herein contained shall
be, in all material respects, true as of and at the Effective Date with
the same effect as though made at such date, except as affected by
transactions permitted or contemplated by this Agreement; ITEQ shall
have performed and complied with all covenants required by this
Agreement to be performed or complied, in all material respects, with by
ITEQ before the Effective Date; and ITEQ shall have delivered to AIX a
certificate, dated the Effective Date and signed by its chairman of the
board or its president, and by its chief financial or accounting
officer, and its secretary, to both such effects.
5.1.2. No Material Litigation. No suit, action, or other
proceeding shall be pending, or to ITEQ's knowledge, threatened, before
any court or governmental agency in which it will be, or it is, sought
to restrain or prohibit or to obtain damages or other relief in
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connection with this Agreement or the consummation of the merger
contemplated hereby or which could reasonably be expected to have a
Material Adverse Effect on ITEQ.
5.1.3. Opinion of ITEQ Counsel. AIX shall have received a
favorable opinion, dated as of the Effective Date, from Xxxxxx & Xxxxxx,
L.L.P., counsel for ITEQ, to the effect that (i) ITEQ has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware; (ii) all corporate proceedings
required to be taken by or on the part of ITEQ to authorize the
execution of this Agreement and the implementation of the merger
contemplated hereby have been taken; (iii) the shares of ITEQ Common
Stock which are to be delivered in accordance with this Agreement will,
when issued, be validly issued, fully paid and nonassessable outstanding
securities of ITEQ; (iv) this Agreement has been duly executed and
delivered by ITEQ; (v) the Registration Statement on Form S-4 (which
contains the Proxy Statement relating to the merger contemplated hereby)
has become effective and no stop order has been issued by the
Commission; and (vi) except as specified by such counsel (such
exceptions to be acceptable to AIX) such counsel does not know of any
material litigation, proceedings, or governmental investigation pending
or threatened against or relating to ITEQ, any of its subsidiaries, or
their respective properties or businesses in which it is sought to
restrain, prohibit or otherwise affect the consummation of the
transactions contemplated by this Agreement. Such opinion also shall
cover such other matters incident to the transactions herein
contemplated as AIX and its counsel may reasonably request. In
rendering such opinion, such counsel may rely upon (i) certificates of
public officials and of officers of ITEQ as to matters of fact and (ii)
the opinion or opinions of other counsel, which opinions shall be
reasonably satisfactory to AIX, as to matters other than federal or
Texas law.
5.1.4. Stockholder Approval. At the meeting of stockholders of
AIX to be held before the Effective Date, the holders of the requisite
majority of the outstanding shares of AIX Common Stock shall have
approved the merger contemplated by this Agreement.
5.1.5. Xxxx-Xxxxx-Xxxxxx, etc. All waiting periods required by
HSR shall have expired with respect to the transactions contemplated by
this Agreement, or early termination with respect thereto shall have
been obtained without the imposition of any governmental request or
order requiring the sale or disposition or holding separate (through a
trust or otherwise) of particular assets or businesses of ITEQ, its
affiliates or any component of AIX or other actions as a precondition to
the expiration of any waiting period or the receipt of any necessary
governmental approval or consent. In addition, any approvals required
under any state or foreign laws comparable to HSR shall have been
obtained.
5.1.6. Registration; Listing of ITEQ Common Stock. On the
Effective Date (i) the Proxy Statement shall have become effective under
the Securities Act, and (ii) the shares of ITEQ Common Stock issuable at
the Effective Date of this Agreement shall have become eligible for
trading on the Nasdaq National Market.
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5.1.7. Consent of Certain Parties in Privity With ITEQ. The
holders of any material indebtedness of ITEQ, the lessors of any
material property leased by ITEQ, and the other parties to any other
material agreements to which ITEQ is a party shall, when and to the
extent necessary in the reasonable opinion of AIX, have consented to the
merger contemplated hereby.
5.1.8. Stock Options and Other Employee Benefit Plans of AIX.
ITEQ shall have made effective provision (i) for the assumption at the
Effective Date of all stock options outstanding under plans maintained
by AIX and/or its subsidiaries, (ii) for the assumption, termination or
discontinuation of all other AIX Plans, and (iii) except for benefits
provided by AIX Plans assumed by ITEQ, make available to employees of
AIX and its subsidiaries ("AIX Employees") participation following the
Effective Date in the ITEQ Plans extended by ITEQ to similarly situated
employees. If an AIX Plan that is terminated or discontinued by ITEQ is
a group health plan, then ITEQ shall permit each AIX Employee
participating in such group health plan and his or her eligible
dependents (including, without limitation, all such AIX Employee's
dependents covered by such group health plan as of the time such
coverage ceases) to be covered under an ITEQ Plan that (i) provides
medical and dental benefits to each such AIX Employee and such eligible
dependents effective immediately upon the cessation of coverage of such
individuals under such group health plan, (ii) credits such AIX
Employee, for the year during which such coverage under such ITEQ Plan
begins, with any deductibles and copayments already incurred during such
year under such group health plan, and (iii) waives any preexisting
condition restrictions to the extent necessary to provide immediate
coverage. ITEQ and the ITEQ Plans shall recognize each AIX Employee's
years of service and level of seniority with AIX and its subsidiaries
for purposes of terms of employment and eligibility, vesting and benefit
determination under the ITEQ Plans (other than benefit accruals under
any defined benefit pension plan).
5.1.9. Ancillary Matters. ITEQ shall have concluded the
Refinancing, subject only to consummation of the merger contemplated by
this Agreement, and AIX shall have received a favorable opinion from RPR
for inclusion in the Proxy Statement as to the fairness, from a
financial point of view, to the AIX stockholders of the Merger
Consideration, which opinion shall not have been withdrawn at the
Effective Date.
0.0.00.Xxx Opinion. AIX shall have received an opinion,
dated as of the Effective Date, from Xxxxxx & Xxxxxx, L.L.P., counsel
for ITEQ, to the effect that (i) the merger of AIX into ITEQ as provided
in this Agreement will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Code, and AIX and ITEQ will be parties to
the reorganization; (ii) no gain or loss will be recognized to AIX or
ITEQ upon such merger; (iii) no gain or loss will be recognized to any
stockholder of AIX as a consequence of the merger, except to the extent
of any cash received in lieu of fractional share interests; (iv) the
aggregate tax basis of the ITEQ Common Stock received by an AIX
stockholder as a result of the merger will be the same as the aggregate
tax basis of the AIX Common Stock exchanged for such shares, reduced by
basis allocable to fractional shares redeemed for cash;
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(v) the holding period of the ITEQ Common Stock received in exchange for
AIX Common Stock pursuant to the merger will include the holding period
of such AIX Common Stock; (vi) ITEQ's basis and holding period for all
the assets of AIX acquired pursuant to the merger will be determined
solely with respect to the basis and holding period of such assets in
the hands AIX; and (vii) no gain or loss will be recognized to holders
of AIX Options upon their exchange into options to purchase ITEQ Common
Stock pursuant to the merger.
5.2. Conditions Precedent to Obligations of ITEQ. The obligations of
ITEQ to consummate and effect the merger hereunder shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by ITEQ in
the manner contemplated by Section 6.4 before the Effective Date.
5.2.1. Representations and Warranties of AIX True at Effective
Date. The representations and warranties of AIX herein contained shall
be, in all material respects, true as of and at the Effective Date with
the same effect as though made at such date, except as affected by
transactions permitted or contemplated by this Agreement; AIX shall have
performed and complied with all covenants required by this Agreement to
be performed or complied with, in all material respects, by it before
the Effective Date; and AIX shall have delivered to ITEQ a certificate,
dated the Effective Date and signed by its chairman of the board or its
president, and by its chief financial or accounting officer, and by its
secretary to both such effects.
5.2.2. No Material Litigation. No suit, action, or other
proceeding shall be pending, or to AIX's knowledge, threatened, before
any court or governmental agency in which it will be, or it is, sought
to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the merger
contemplated hereby or which could reasonably be expected to have a
Material Adverse Effect on AIX.
5.2.3. Opinion of AIX's Counsel. ITEQ shall have received a
favorable opinion, dated the Effective Date, from Xxxxxx & Xxxxxx
L.L.P., counsel to AIX to the effect that (i) AIX has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware; (ii) all outstanding shares of
the AIX Common Stock have been validly issued and are fully paid and
nonassessable; (iii) all corporate or other proceedings required to be
taken by or on the part of AIX to authorize the execution of this
Agreement and the implementation of the merger contemplated hereby have
been taken; (iv) this Agreement has been duly executed and delivered by
AIX; and (v) except as specified by such counsel (such exceptions to be
acceptable to ITEQ) such counsel does not know of any material
litigation, proceedings or governmental investigation, pending or
threatened against or relating to AIX or its properties or businesses in
which it is sought to restrain, prohibit or otherwise affect
consummation of the transactions contemplated by this Agreement. Such
opinion shall also cover such other matters incident to the transactions
herein contemplated as ITEQ and its counsel may reasonably request. In
rendering such
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opinion, such counsel may rely upon (i) certificates of public officials
and of officers of AIX as to matters of fact and (ii) on the opinion or
opinions of other counsel, which opinions shall be reasonably
satisfactory to ITEQ, as to matters other than federal or Texas law.
5.2.4. Stockholder Approval. At the meeting of stockholders of
ITEQ to be held before the Effective Date, the holders of the requisite
majority of the outstanding shares of ITEQ Common Stock shall have
approved the merger contemplated by this Agreement.
5.2.5. Xxxx-Xxxxx-Xxxxxx, etc. All waiting periods required by
HSR shall have expired with respect to the transactions contemplated by
this Agreement, or early termination with respect thereto shall have
been obtained without the imposition of any governmental request or
order requiring the sale or disposition or holding separate (through a
trust or otherwise) of particular assets or businesses of ITEQ, its
affiliates or any component of AIX or other actions as a precondition to
the expiration of any waiting period or the receipt of any necessary
governmental approval or consent. In addition, any approvals required
under any state or foreign laws comparable to HSR shall have been
obtained.
5.2.6. Consent of Certain Parties in Privity with AIX. The
holders of any material indebtedness of AIX, the lessors of any material
property leased by AIX, and the other parties to any other material
agreements to which AIX is a party shall, when and to the extent
necessary in the reasonable opinion of ITEQ, have consented to the
merger contemplated hereby.
5.2.7. Ancillary Matters. ITEQ shall have concluded the
Refinancing, subject only to consummation of the merger contemplated by
this Agreement, and it shall have received a favorable opinion from
Xxxxxxx for inclusion in the Proxy Statement as to the fairness, from a
financial point of view, to ITEQ of the Merger Consideration, which
opinion shall not have been withdrawn at the Effective Date.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1. Termination. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated and the merger
contemplated hereby abandoned at any time (whether before or after the approval
and adoption thereof by the stockholders of AIX or ITEQ) before the Effective
Date:
6.1.1. By Mutual Consent. By mutual consent of ITEQ and AIX.
6.1.2. By ITEQ Because of Conditions Precedent. By ITEQ, if
there has been a breach by AIX of any of its representations,
warranties, covenants, or agreements set forth in this Agreement, or if
any representation or warranty of AIX shall have become untrue, in
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either case which could reasonably be expected to have a Material
Adverse Effect on AIX, and which AIX fails to cure within 15 business
days after written notice thereof from ITEQ (except that no cure period
shall be provided for any breach by AIX which by its nature cannot be
cured).
6.1.3. By ITEQ Because of Material Adverse Change. By ITEQ, if
there has been since March 31, 1997, a Material Adverse Change with
respect to AIX.
6.1.4. By AIX Because of Conditions Precedent. By AIX, if there
has been a breach by ITEQ of any of its representations, warranties,
covenants or agreements set forth in this Agreement, or if any
representation or warranty of ITEQ shall have become untrue, in either
case which could reasonably be expected to have a Material Adverse
Effect on ITEQ, and which ITEQ fails to cure within 15 business days
after written notice thereof from AIX (except that no cure period shall
be provided for any breach by ITEQ which by its nature cannot be cured).
6.1.5. By AIX Due to a Superior AIX Transaction Proposal. By AIX
if, before the Effective Date, AIX's board of directors shall have
withdrawn or modified in a manner adverse to ITEQ its approval of this
Agreement or the merger contemplated hereby under the terms, conditions
and procedures set forth in Paragraph 4.3.6.2.
6.1.6. By AIX Because of Material Adverse Change. By AIX, if
there has been since March 31, 1997, a Material Adverse Change with
respect to ITEQ.
6.1.7. By ITEQ or AIX Because of Legal Proceedings. By either
ITEQ or AIX if any suit, action, or other proceeding shall be pending or
threatened by the federal or a state government before any court or
governmental agency, in which it is sought to restrain, prohibit, or
otherwise affect the consummation of the merger contemplated hereby.
6.1.8. By ITEQ or AIX if Merger not Effective by November 30,
1997. By either ITEQ or AIX, if all conditions to consummation of the
merger shall not have been satisfied or waived on or before November 30,
1997, other than as a result of a breach of this Agreement by the
terminating party.
6.1.9. By ITEQ or AIX if Merger Cannot be Accounted for as a
Pooling. By ITEQ or AIX if the merger contemplated by this Agreement
cannot for financial reporting purposes be accounted for as a "pooling
of interests"; provided, however, this provisions shall not be available
to a party which has engaged in any transaction after June 30, 1997,
that either alone or in combination with actions previously taken
disqualifies the merger from such accounting treatment.
6.2. Termination by Board of Directors. An election of ITEQ to
terminate this Agreement and abandon the merger as provided in Section 6.1
shall be exercised on behalf of ITEQ by its board
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of directors. An election of AIX to terminate this Agreement and abandon the
merger as provided in Section 6.1 shall be exercised on behalf of AIX by its
board of directors.
6.3. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to and in accordance with the provisions
of Section 6.1 hereof, this Agreement shall become void and have no effect,
without any liability on the part of any party hereto (or its stockholders or
controlling persons or directors or officers), except (i) the provisions of the
confidentiality agreements dated July 23, 1997, between ITEQ and AIX shall
survive such termination, and abandonment, (ii) the provisions of Paragraphs
4.3.6.1 and 4.3.6.2 shall survive such termination and abandonment and (iii)
except as otherwise provided in Paragraph 4.3.6.2, neither party shall be
released or relieved from any liability arising from the willful breach by such
party of any of its representations, warranties, covenants or agreements as set
forth in this Agreement.
6.4. Waiver of Conditions. Subject to the requirements of any
applicable law, any of the terms or conditions of this Agreement may be waived
at any time by the party which is entitled to the benefit thereof, by action
taken by its board of directors.
6.5. Expense on Termination. If the merger contemplated hereby is
abandoned pursuant to and in accordance with the provisions of Section 6.1
hereof, all expenses will be paid by the party incurring them.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Exchange of Options. Promptly after the Effective Date,
ITEQ will notify in writing each holder of an AIX Option of the exchange of the
AIX Option for an option to purchase ITEQ Common Stock in accordance with
Section 1.10 hereof.
7.2. Indemnity.
7.2.1. Indemnification by ITEQ as to Proxy Statement. ITEQ
agrees to indemnify and hold harmless AIX and its officers and directors
and each person who controls AIX within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages, or liabilities, joint or several, to which any
of them may become subject under the Securities Act, the Exchange Act or
any other statute or common law, and to reimburse them for any legal or
other expenses incurred by them in connection with investigating any
claims and defending any actions, to the extent such losses, claims,
damages, liabilities, or actions arise out of or are based upon (i) any
false, misleading or untrue statement or alleged false, misleading or
untrue statement of a material fact, insofar as it relates to ITEQ
contained in the Proxy Statement in the form mailed to the stockholders
of ITEQ or (ii) the omission or alleged omission to state in the Proxy
Statement
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(including the Prospectus used in connection with the "issuance" of the
Merger Consideration) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except for such
statements or omissions made in reliance upon and in conformity with the
information furnished to ITEQ in writing by AIX specifically for use in
connection with the preparation of the Proxy Statement.
7.2.2. Indemnification of Directors and Officers. ITEQ shall
indemnify and hold harmless each present and former director and officer
of AIX, determined as of the Effective Date, against any claims, losses,
liabilities, damages, judgments, fines, fees, costs or expenses,
including without limitation attorneys' fees and disbursements incurred
in connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising out of
or pertaining to matters existing or occurring at or prior to the
Effective Date (including, without limitation, the merger, the
preparation, filing and mailing of the Proxy Statement and the other
transactions and actions contemplated by this Agreement), whether
asserted or claimed prior to, at or after the Effective Date, to the
fullest extent that AIX would have been permitted, under applicable law,
indemnification agreements existing on the date hereof, the Certificate
of Incorporation or Bylaws of AIX in effect on the date hereof, to
indemnify such person (and ITEQ shall also advance expenses as incurred
to the fullest extent permitted under applicable law provided the person
to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled
to indemnification).
7.2.3. Indemnification Procedure. Any indemnified party wishing
to claim indemnification under this Section 7.2, upon learning of any
such claim, action, suit, proceeding or investigation, shall promptly
notify ITEQ thereof, but the failure to so notify shall not relieve ITEQ
of any liability or obligation it may have to such indemnified party
except, and only to the extent, that such failure materially prejudices
ITEQ. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before, at or after the Effective Date),
ITEQ shall have the right to assume the defense thereof and ITEQ shall
not be liable to such indemnified parties for any legal expenses of
other counsel or any other expenses subsequently incurred by such
indemnified parties in connection with the defense thereof, except that
if ITEQ elects not to assume such defense, or counsel for the
indemnified parties advises that there are bona fide issues that raise
conflicts of interest between ITEQ and indemnified party, the
indemnified parties may retain counsel satisfactory to them, and ITEQ
shall pay all reasonable fees and expenses of such counsel for the
indemnified party promptly as statements therefor are received. If such
indemnity is not available with respect to any indemnified party, then
ITEQ and the indemnified party shall contribute to the amount payable in
such proportion as is appropriate to reflect relative faults and
benefits.
7.2.4. Benefits. The provisions of this Section 7.2 is intended
to be for the benefit of, and shall be enforceable by, each of the
indemnified parties and their respective heirs and legal
representatives. The indemnification provided for herein shall not be
exclusive of any
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rights to which an indemnified party is entitled, whether pursuant to
law, contract or otherwise.
7.3. Registration of Certain AIX Control Person Shares.
7.3.1. Agreement to Register Resales. ITEQ agrees that promptly
following the Effective Date, it will file with the Commission on Form
S-3, a shelf registration statement pursuant to Rule 415 of the
Securities Act (the "Registration Statement") covering the resale by
each of the former stockholders of AIX who has complied with Paragraph
7.4.1 ("Stockholders") of all the shares of ITEQ Common Stock received
by them in the merger or receivable upon exercise of AIX Options (the
"Stock"), and will use its best efforts to cause the same to be declared
effective promptly by the Commission (and in any event, not later than
10 days following the publication by ITEQ of financial results
containing at least 30 days of post-merger operations). ITEQ agrees to
maintain such Registration Statement in effect for the maximum period
allowable under the regulations promulgated by the Commission, and in
any event to maintain the same (or, to the extent necessary, successive
registration statements) through at least December 31, 2002. In any
offering pursuant to this Paragraph, ITEQ will use its best efforts to
effect any such registration and use its best efforts to effect such
qualification and compliance as may be required and as would permit or
facilitate the resale of such Stock, including, without limitation,
registration under the Securities Act, appropriate qualifications under
applicable blue-sky or other state securities laws, and appropriate
compliance with any other governmental requirements.
7.3.2. Procedures. Unless otherwise agreed between ITEQ and any
Stockholder, the Registration Statement will cover resales of Stock in
the open market by the Stockholders, among others. In no event shall
the plan of distribution of Stock include the use of a contractual
underwriter, nor shall ITEQ have any obligation to enter into an
underwriting agreement with any investment banking firm participating as
a broker in the execution of any such resales. ITEQ agrees that it will
furnish to each Stockholder such number of prospectuses, prospectus
supplements, or other documents incident to any registration,
qualification or compliance referred to herein as the Stockholder from
time to time may reasonably request.
7.3.3. Registration Expenses. All expenses (except for
commissions and any legal fees for Stockholder's counsel) of any
registrations of Stock effected pursuant to this Agreement (including,
but not limited to, the expenses of any qualifications under the blue-
sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments or
prospectus supplements required for the lawful distribution of the Stock
to the public in connection with such registration) will be paid by
ITEQ.
7.3.4. Preparation; Reasonable Investigation. In connection with
the preparation and filing of any registration statement under the
Securities Act pursuant to this Agreement,
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ITEQ will give each Stockholder (and any single counsel designated by
all Stockholders), the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed
with the Commission, and each amendment thereof or supplement thereto,
and will give each of them such access to its books and records and such
opportunities to discuss the business of ITEQ with its officers and the
independent public accountants who have certified its financial
statements as shall be necessary to conduct a reasonable investigation
within the meaning of the Securities Act.
7.3.5. Rights Non-Transferable. The registration rights provided
by this Section 7.3 are for the benefit solely of the Stockholders, are
personal in nature, and shall not be available to any subsequent holder
of Stock (other than subsequent holders who have become such by gift or
other transfer by a Stockholder to an immediate family member of such
Stockholder, by will or through operation of the laws of descent and
distribution ("Heirs") and the Stockholders' and their Heirs' respective
administrators, guardians, receivers, executors or other persons acting
in a similar capacity).
7.3.6. Indemnification by ITEQ. ITEQ agrees to indemnify and
hold harmless each Stockholder and each person, if any, who controls a
Stockholder, against any and all claims, demands, losses, costs,
expenses, obligations, liabilities, joint or several, damages,
recoveries and deficiencies, including interest, penalties and
attorneys' fees (collectively, "Claims"), to which such Stockholder may
become subject under the Securities Act or otherwise, insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and ITEQ will reimburse such Stockholder and
each such controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or
defending any such Claim (or action or proceeding in respect thereof);
provided that ITEQ shall not be liable in any such case to the extent
that any such Claim (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such
Registration Statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, in reliance
upon and in conformity with written information furnished to ITEQ
through an instrument duly executed by such Stockholder specifically
stating that it is for use in the preparation thereof. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of any Stockholder or any such controlling person
and shall survive any transfer of Stock by a Stockholder.
7.3.7. Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a Claim referred to in this Section 7.3, such
indemnified party will, if a claim in respect thereof is to be made
against
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ITEQ, give written notice to ITEQ, in the manner and to the address
specified in Section 8.3 hereof, of the commencement of such action,
provided that the failure of any indemnified party to give notice as
provided herein shall not relieve ITEQ of its obligations under this
Section 7.3, except and only to the extent that ITEQ is actually
prejudiced by such failure to give notice. In case any such action is
brought against ITEQ, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Claim, ITEQ shall be
entitled to participate in and to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party, and after
notice from ITEQ to such indemnified party of its election so to assume
the defense thereof, ITEQ shall not be liable to such indemnified party
for any legal expenses subsequently incurred by the latter in connection
with the defense thereof other than reasonable costs of investigation.
ITEQ shall not, without the consent of the indemnified party, consent to
entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect of such Claim.
7.3.8. Undertaking to File Reports and Cooperate in Rule 144
Transactions. For as long as any of the Stockholders shall continue to
hold any Stock, ITEQ will undertake, on a reasonable commercial basis,
to timely file all annual, quarterly and other reports required to be
filed by it under Section 13 or 15(d) of the Exchange Act, and the
regulations of the Commission thereunder. In the event of any proposed
sale of Stock by any of the Stockholders pursuant to Rule 144 under the
Securities Act, ITEQ shall cooperate with such Stockholder so as to
enable such sales to be made in accordance with applicable laws, rules
and regulations, the requirements of ITEQ's transfer agents, and the
reasonable requirements of any broker through which the sales are
proposed to be executed. Without limiting the generality of the
foregoing, ITEQ shall, upon request, furnish with respect to each such
sale (i) a written statement certifying that ITEQ has filed all reports
required to be filed by it under the Exchange Act for a period of at
least one year preceding the date of the proposed sale, and, in
addition, has filed the most recent annual report required to be filed
by it thereunder; (ii) an opinion of ITEQ's counsel regarding such
matters as ITEQ's transfer agents or such Stockholder's broker may
reasonably desire to confirm; and (iii) upon surrender of a certificate
or certificates for the same or a greater number of Stock, unlegended
certificates representing Stock in such numbers and denominations as
such Stockholder shall reasonably require for delivery pursuant to such
resales.
7.3.9. Beneficiaries. The provisions of this Section 7.3 are for
the benefit of the Stockholders and ITEQ, and no other person shall
acquire or have any rights under or by virtue of this Agreement except
as set forth in Paragraph 7.3.5. As express third-party beneficiaries
of this Section 7.3, any Stockholder may independently enforce the
provisions hereof against ITEQ.
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7.4. Affiliate Agreements.
7.4.1. AIX Affiliates. To insure that the merger contemplated by
this Agreement will be treated as a "pooling of interests" and to insure
compliance with Rule 145 of the rules and regulations promulgated by the
Commission and the Securities Act, each of AIX's directors, executive
officers and beneficial owners of 5% or more of AIX's Common Stock has
concurrently signed and delivered to ITEQ the AIX affiliate agreements
in the form attached as [reference to omitted appendix].
7.4.2. ITEQ Affiliates. To insure that the merger contemplated
by this Agreement will be treated as a "pooling of interests," each of
ITEQ's directors, executive officers and beneficial owners of 5% or more
of ITEQ's Common Stock has concurrently signed and delivered to ITEQ the
ITEQ affiliate agreements in the form attached as [reference to omitted
appendix].
7.5. Publication of Combined Results. ITEQ agrees to publicly release
a report in the form of a quarterly earnings report, registration statement
filed with the Commission, a report filed with the Commission on Form 10-K, 10-
Q, or 8-K or any other public filing, statement or announcement which includes
the combined financial results (including combined sales and net income) of
ITEQ and AIX for a period of at least 30 days of combined operations of ITEQ
and AIX following the Effective Date within 30 days after the end of the first
full calendar month of combined operations.
ARTICLE VIII
MISCELLANEOUS
8.1. Entirety. This Agreement embodies the entire agreement between
the parties with respect to the subject matter hereof, and all prior agreements
between the parties with respect thereto are hereby superseded in their
entirety.
8.2. Counterparts. Any number of counterparts of this Agreement may
be executed and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
instrument.
8.3. Notices and Waivers. Any notice or waiver to be given to any
party hereto shall be in writing and shall be delivered by courier, sent by
facsimile transmission or first class registered or certified mail, postage
prepaid.
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IF TO ITEQ
Addressed to: With a copy to:
ITEQ, Inc. Xxxxxx & Xxxxxx, L.L.P.
0000 Xxxxx Xxxxxxx, Xxxxx 000 700 Louisiana, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxxx X. XxXxxx Attention: T. Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
IF TO AIX
Addressed to: With a copy to:
Astrotech International Corporation Xxxxxx & Xxxxxx L.L.P.
000 Xxxx Xxxxxx, Xxxxx 000 1001 Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 2300 First City Tower
Attention: S. Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000 Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, shall be deemed to be received on the fifth
business day after so mailed, and if delivered by courier or facsimile to such
address, upon delivery during normal business hours on any business day.
8.4. Termination of Representations, Warranties, etc. The respective
representations and warranties contained in Articles II and III shall expire
with, and be terminated and extinguished by, the merger pursuant to this
Agreement at the time of the consummation thereof on the Effective Date. This
Section 8.4 shall not limit any covenant or agreement of the parties hereto
which by its terms contemplates performance after the Effective Date or after
termination of this Agreement.
8.5. Table of Contents and Captions. The table of contents and
captions contained in this Agreement are solely for convenient reference and
shall not be deemed to affect the meaning or interpretation of any article,
section, or paragraph hereof.
8.6. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the successors and assigns
of the parties hereto and the employees of AIX shall be considered third-party
beneficiaries of the covenants and agreements contained in Section 1.10 and
5.18 of this Agreement. As express third-party beneficiaries of Sections 1.10
and 5.18, the employees of AIX may independently enforce such provisions
against ITEQ.
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8.7. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
8.8. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas
(except to the extent that the form and content of the Certificate of Merger
and the consequences of the filing thereof shall be governed by the DGCL).
8.9. Public Announcements. The parties agree that before the
Effective Date that they shall consult with each other before the making of any
public announcement regarding the existence of this Agreement, the contents
hereof or the transactions contemplated hereby, and to obtain the prior
approval of the other party as to the content of such announcement, which
approval shall not be unreasonably withheld. However, the foregoing shall not
apply to any announcement or written statement which, upon the written advice
of counsel, is required by law to be made, except that the party required to
make such announcement shall, whenever practicable, consult with and solicit
prior approval from such other party concerning the timing and content of such
legally required announcement or statement before it is made.
8.10. Definitions. The following terms are defined in the indicated
place:
Section or
Term Paragraph
---- ---------
Agreement Premises
AIX Common Stock Premises
AIX Employee 5.1.8
AIX Options 1.10
AIX Option Plans 1.10
AIX Plans 2.1.7.1
AIX Reports 2.1.5
AIX Transaction Proposals 4.3.6.1
Another AIX Transaction 4.3.6.2
Applicable Environmental Laws 2.1.14.3
Break-Up Fee 4.3.6.2
Claims 7.3.6
Code 1.4.2
Commission 1.10
DGCL Premises
DMG 2.1.16
Effective Date 1.3
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Encumbrance 2.1.4
ERISA 2.1.17
Exchange Act 2.1.5
Heirs 7.3.5
HSR 2.1.18
Intellectual Property 2.1.11
Investment Company Act 2.1.21
ITEQ Common Stock Premises
ITEQ Plans 3.1.16
ITEQ Reports 3.1.5
ITEQ Shares 1.9.2
Material Adverse Effect 1.12
Merger Consideration 1.9.2
Merging Corporations Premises
OSHA 2.1.15
Proxy Statement 2.1.20
RPR 2.1.16
Refinancing 4.4.13
Registration Statement 7.3.1
Restated Bylaws 1.6
Restated Certificate of Incorporation 1.4.1
Securities Act 4.4.10
Xxxxxxx 2.1.16
Stock 7.3.1
Stockholders 7.3.1
Superior AIX Transaction Proposal 4.3.6.1
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in their respective corporate names by their respective duly authorized
representatives, all as of the day and year first above written (but executed
and delivered as of the 23rd of day of July, 1997).
THE PARTIES TO THE MERGER CONTEMPLATED BY THIS AGREEMENT:
ITEQ, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Xxxx X. Xxxxxxx, Chairman of the
Board and Chief Executive Officer
ASTROTECH INTERNATIONAL CORPORATION
By: /s/ S. Xxxx Xxxxxxxx
--------------------------------------
S. Xxxx Xxxxxxxx, Chairman of the
Board and Chief Executive Officer
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