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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and between
ELECTRONIC TRANSMISSION CORPORATION,
a Texas corporation
and
ETC TRANSACTION CORPORATION,
an Alberta, Canada corporation
May 1, 1996
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ARTICLE/SECTION PAGE
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Directors and Officers of the Surviving Corporation . . . . . . . . . . . . . . . . 2
ARTICLE 2 CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Conversion of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3 REPRESENTATION AND WARRANTIES OF TRANSACTION CORP. . . . . . . . . . . . . . . . . . 4
3.1 Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Certain Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ETC-TEXAS . . . . . . . . . . . . . . . . . . . . 5
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Capitalization and Ownership of ETC-Texas . . . . . . . . . . . . . . . . . . . . . 5
4.3 Certain Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.5 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . 6
4.6 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . 6
4.7 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.8 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.9 Events Subsequent to Financial Statements . . . . . . . . . . . . . . . . . . . . . 7
4.10 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.11 Tax Returns and Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.12 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.14 Questionable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.16 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.18 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.19 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.20 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.21 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.22 Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.23 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.24 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 5 CONDUCT OF BUSINESS PENDING THE CLOSING . . . . . . . . . . . . . . . . . . . . . . 12
5.1 Conduct of Business by ETC-Texas Pending the Closing . . . . . . . . . . . . . . . . 12
5.2 Other Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 6 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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6.2 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Meetings of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.4 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.5 Reimbursement of Transaction Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 7 CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Conditions to Obligations of Each Party to Effect the Closing . . . . . . . . . . . 15
7.2 Additional Conditions to Transaction Corp.'s Obligations . . . . . . . . . . . . . . 15
7.3 Additional Conditions to ETC-Texas' Obligations . . . . . . . . . . . . . . . . . . 17
ARTICLE 8 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.1 Indemnification by ETC-Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.2 Indemnification by Transaction Corp. . . . . . . . . . . . . . . . . . . . . . . . . 18
8.3 Conditions of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.1 Termination by Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.2 Termination by Any Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.3 Effect of Termination and Abandonment . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 10 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.4 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.5 Separate Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May
1, 1996, is made and entered into by and between ETC Transaction Corporation,
an Alberta, Canada corporation ("Transaction Corp.") f/k/a Solo Petroleums,
Ltd. ("Solo") and Electronic Transmission Corporation, a Texas corporation
("ETC-Texas").
RECITALS
WHEREAS, the Board of Directors of Transaction Corp. has adopted
resolutions approving and adopting the continuance and domestication of
Transaction Corp. into a Delaware corporation (the "Continuance") for the
purposes of merging with ETC-Texas (the "Merger");
WHEREAS, the Board of Directors of ETC-Texas has adopted resolutions
approving and adopting the Merger;
WHEREAS, the Merger is intended to qualify as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"); and
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions set forth herein, the parties
hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.3 hereof), ETC-Texas shall be
merged with and into Transaction Corp. and the separate corporate existence of
ETC-Texas shall thereupon cease. Transaction Corp. (sometimes hereinafter
referred to as the "Surviving Corporation") shall be the surviving corporation
in the Merger. The Merger shall have the effects set forth in the applicable
provisions of the Delaware General Corporation Law (the "DGCL") and the Texas
Business Corporation Act (the "TBCA").
1.2 Closing. The closing of the Merger (the "Closing") shall take place at
a time and place to be mutually agreed upon by ETC-Texas and Transaction Corp.
as soon as the conditions set forth in Article 7 have been satisfied or waived
or as soon as practicable thereafter. Such date is herein referred to as the
"Closing Date."
1.3 Effective Time of the Merger. If all of the conditions to the Merger
set forth in Article 7 shall have been fulfilled or waived in accordance
herewith and this Agreement shall not have been terminated as provided in
Article 9, the parties hereto shall cause Articles of Merger (the "Articles of
Merger") that meet the requirements of the applicable provisions of the DGCL
and the TBCA, respectively, to be properly executed and filed with the
Secretary of State of the States of Delaware and Texas, respectively, on the
Closing Date. The Merger shall be effective at the time of acceptance of the
filing of the Articles of Merger with the Secretary of State of the States of
Delaware and Texas in accordance with the DGCL and the TBCA, respectively, or
at such later time which the parties hereto shall have agreed upon and
designated in such filing as the effective time of the Merger (the "Effective
Time").
1.4 Certificate of Incorporation and Bylaws. In continuing and
domesticating into Delaware, Transaction Corp. shall file a Certificate of
Incorporation and Bylaws with the Secretary of State of the State of Delaware
and such Certificate of Incorporation and Bylaws of Transaction Corp. shall
become the Certificate of Incorporation and Bylaws of Transaction Corp. and of
the Surviving Corporation, subject always to the right of the Surviving
Corporation to amend its Articles of Incorporation and Bylaws in accordance
with the laws of the State of Delaware and the provisions of the Certificate of
Incorporation and Bylaws.
AGREEMENT AND PLAN OF MERGER - Page 1
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1.5 Directors and Officers of the Surviving Corporation. The directors and
officers of ETC-Texas immediately prior to the Effective Time shall be the
initial directors and officers of the Surviving Corporation and shall hold such
positions from the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation or as otherwise provided
by law.
ARTICLE 2
CONVERSION OF SHARES
2.1 Conversion of Company Common Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of Transaction Corp. or
ETC-Texas or any holder of capital stock of any of them:
(a) Subject to the limitations contained herein, each share of
common stock of ETC-Texas, no par value (the "ETC-Texas Common
Stock"), issued and outstanding immediately prior to the Effective
Time shall be automatically converted into the right to receive one
and one-fourth of a share of common stock of Transaction Corp. no par
value (the "Transaction Corp. Common Stock").
(b) All shares of ETC-Texas Common Stock shall be cancelled and
cease to be outstanding and each holder of a certificate representing
ETC-Texas Common Stock shall thereafter cease to have any rights with
respect thereto except as set forth in this Article 2.
2.2 Stock Certificates. At or following the Effective Time, each holder
of an outstanding certificate or certificates representing ETC-Texas Common
Stock shall surrender the same to Transaction Corp. and Transaction Corp.
shall, in exchange therefor, cause to be issued to the holder of such
certificate(s) a new certificate representing shares of Transaction Corp.
Common Stock in accordance with this Article 2, less any amount required to be
withheld under applicable federal, state or local tax requirements, and the
surrendered certificate(s) shall be cancelled. Until so surrendered and
exchanged, each such certificate shall represent solely the right to receive
shares of Transaction Corp. Common Stock in accordance with this Article 2,
without interest and less any tax withholding.
2.3 Fractional Shares. No fractional shares of Transaction Corp. Common
Stock shall be issued in the Merger. In lieu thereof, all fractional shares of
Transaction Corp. Common Stock that a holder of ETC-Texas Common Stock would
otherwise be entitled to receive as a result of the Merger shall be
automatically converted into the right to receive one full share of Transaction
Corp. Common Stock.
2.4 Dissenting Shares. Each share of ETC-Texas Common Stock issued and
outstanding immediately prior to the Effective Time not voted in favor of the
Merger, the holder of which has given written notice of the exercise of
dissenter's rights as required by the TBCA is herein called a "Dissenting
Share." Dissenting Shares shall not be converted into or represent the right
to receive shares of Transaction Corp. Common Stock pursuant to this Article 2
and shall be entitled only to such rights as are available to such holder
pursuant to the TBCA, unless the holder thereof shall have withdrawn or
forfeited his dissenter's rights. Each holder of Dissenting Shares shall be
entitled to receive the value of such Dissenting Shares held by him in
accordance with the applicable provisions of the TBCA. Transaction Corp. will
promptly pay to any holder of Dissenting Shares such amount as such holder
shall be entitled to receive in accordance with the applicable provisions of
the TBCA. If any holder of Dissenting Shares shall effectively withdraw or
forfeit his dissenter's rights under the TBCA, such Dissenting Shares shall be
converted into the right to receive shares of Transaction Corp. Common Stock in
accordance with this Article 2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TRANSACTION CORP.
Transaction Corp. hereby represents and warrants to ETC-Texas as
follows:
3.1 Organization. Transaction Corp. has been duly incorporated, is
validly existing as a corporation and is in good standing under the laws of
Alberta, its province of incorporation, and has the requisite corporate power
to carry on its business as now conducted.
AGREEMENT AND PLAN OF MERGER - Page 2
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3.2 Capitalization. The authorized capital stock of Transaction Corp.
consists of an unlimited number of Class "A" Common Shares and an unlimited
number of Class "B" Preferred Shares in the capital stock of Transaction Corp.
As of the date of this Agreement, 1,487,428 Class "A" Common Shares of
Transaction Corp. are issued and outstanding. No Class "B" Preferred Shares
have been issued. All of the issued and outstanding shares of Transaction
Corp. Common Stock are validly issued, fully paid and nonassessable and free of
preemptive rights. All shares of Transaction Corp. Common Stock issuable in
accordance with this Agreement will be, when so issued, duly authorized,
validly issued, fully paid and nonassessable.
3.3 Certain Corporate Matters. Transaction Corp. is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership of its properties, the employment of its personnel or
the conduct of its business requires it to be so qualified, except where such
failure would not have a material adverse effect on Transaction Corp.'s
financial condition, results of operations or business. Transaction Corp. has
full corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged and to own and use
the properties owned and used by it.
3.4 Authority Relative to this Agreement. Transaction Corp. has the
requisite corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution, delivery and performance of
this Agreement by Transaction Corp. and the consummation by Transaction Corp.
of the transactions contemplated hereby have been duly authorized by the Board
of Directors of Transaction Corp. and, subject to stockholder approval as set
forth in this Agreement, no other actions on the part of Transaction Corp. are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Transaction
Corp. and constitutes, subject to stockholder approval as set forth in this
Agreement, a valid and binding agreement of Transaction Corp., enforceable
against Transaction Corp. in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
3.5 Consents and Approvals; No Violations. Except for applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), state
securities or blue sky laws, and the filing and recordation of a certificate of
merger or the articles of merger as required by the DGCL and the TBCA, no
filing with, and no permit, authorization, consent or approval of, any public
body or authority is necessary for the consummation by Transaction Corp. of the
transactions contemplated by this Agreement. Neither the execution or delivery
of this Agreement by Transaction Corp. nor the consummation by Transaction
Corp. of the transactions contemplated hereby, nor compliance by Transaction
Corp. with any of the provisions hereof, will (a) conflict with or result in
any breach of any provisions of the Certificate of Incorporation or Bylaws of
Transaction Corp. (b) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Transaction
Corp. is a party or by which it or its properties or assets may be bound or (c)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Transaction Corp. or any of its properties or assets, except in
the case of clauses (b) and (c) for violations, breaches or defaults which are
not in the aggregate material to Transaction Corp. taken as a whole.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
ETC-TEXAS
ETC-Texas hereby represents and warrants to Transaction Corp. as
follows:
4.1 Organization. ETC-Texas is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and has the requisite corporate power to carry on its business as now
conducted.
4.2 Capitalization and Ownership of ETC-Texas. ETC-Texas' entire
authorized capital stock consists of 8,000,000 shares of ETC-Texas Common
Stock, no par value and 2,000,000 shares of ETC-Texas Preferred Stock, no par
value. All shares of ETC-Texas Common Stock have been duly authorized and are
validly issued,
AGREEMENT AND PLAN OF MERGER - Page 3
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fully paid and nonassessable and have not been issued in violation of any
pre-emptive rights. Except as set forth on Schedule 4.2 hereto, there are no
outstanding or authorized options, rights, warrants, calls, convertible
securities, rights to subscribe, conversion rights or other agreements or
commitments to which ETC-Texas is a party or which is binding upon ETC-Texas
providing for the issuance by ETC-Texas or transfer by ETC-Texas of additional
shares of its capital stock and ETC-Texas has not reserved any shares of its
capital stock for issuance, nor are there any outstanding stock option rights,
phantom equity or similar rights, contracts, arrangements or commitments based
upon the book value, income or other attribute of ETC-Texas.
4.3 Certain Corporate Matters. ETC-Texas is duly licensed or qualified to
do business and is in good standing as a foreign corporation in every
jurisdiction in which the character of ETC-Texas' properties or nature of
ETC-Texas' business requires it to be so licensed or qualified other than such
jurisdictions in which the failure to be so licensed or qualified does not, or
insofar as can reasonably be foreseen, in the future will not, have a material
adverse effect on its financial condition, results of operations or business.
ETC-Texas has full corporate power and authority and all authorizations,
licenses and permits necessary to carry on the business in which it is engaged
or in which it proposes presently to engage and to own and use the properties
owned and used by it. ETC-Texas has delivered to Transaction Corp. true,
accurate and complete copies of its Articles of Incorporation and Bylaws, which
reflect all amendments made thereto at any time prior to the date of this
Agreement. The records of meetings of the shareholders and Board of Directors
of ETC-Texas are complete and correct in all material respects. The stock
records of ETC-Texas and the shareholder lists of ETC-Texas that ETC-Texas has
previously furnished to Transaction Corp. are complete and correct in all
material respects and accurately reflect the record ownership and the
beneficial ownership of all the outstanding shares of ETC-Texas' capital stock
and all other outstanding securities issued by ETC-Texas. ETC-Texas is not in
default under or in violation of any provision of its Articles of Incorporation
or Bylaws in any material respect. ETC-Texas is not in default or in
violation of any restriction, lien, encumbrance, indenture, contract, lease,
sublease, loan agreement, note or other obligation or liability by which it is
bound or to which any of its assets is subject.
4.4 Subsidiaries. ETC-Texas does not own, directly or indirectly, any of
the capital stock of any other corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, joint venture
or other entity.
4.5 Authority Relative to this Agreement. ETC-Texas has the requisite
corporate power and authority to enter into this Agreement and carry out its
obligations hereunder. The execution, delivery and performance of this
Agreement by ETC-Texas and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of ETC-Texas and,
subject to shareholder approval as set forth in this Agreement, no other
actions on the part of ETC-Texas are necessary to authorize this Agreement or
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by ETC-Texas and constitutes, subject to shareholder
approval as set forth in this Agreement, a valid and binding obligation of
ETC-Texas, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
4.6 Consents and Approvals; No Violations. Except for applicable
requirements of the Securities Act, the Exchange Act, state securities or blue
sky laws, and the filing and recordation of a certificate of merger or the
articles of merger as required by the DGCL and the TBCA, no filing with, and no
permit, authorization, consent or approval of, any public body or authority is
necessary for the consummation by ETC-Texas of the transactions contemplated by
this Agreement. Neither the execution or delivery of this Agreement by
ETC-Texas nor the consummation by ETC-Texas of the transactions contemplated
hereby, nor compliance by ETC-Texas with any of the provisions hereof, will (a)
conflict with or result in any breach of any provisions of the Articles of
Incorporation or Bylaws of ETC-Texas, (b) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which ETC-Texas is a party or by which it or any of its properties or assets
may be bound or (c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to ETC-Texas, or any of its properties or assets,
except in the case of clauses (b) and (c) for violations, breaches or defaults
which are not in the aggregate material to ETC-Texas taken as a whole.
AGREEMENT AND PLAN OF MERGER - Page 4
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4.7 Financial Statements. ETC-Texas has delivered to Transaction Corp.
all financial information requested by Transaction Corp. (the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods covered thereby and present fairly the financial condition of ETC-Texas
as of such dates and the results of its operations and changes in cash flows
for such periods.
4.8 Events Subsequent to Financial Statements. Since March 31, 1996, there
has not been:
(a) Any adverse change in the financial condition, results of
operations or business of ETC-Texas;
(b) Any sale, lease, transfer, license or assignment of any assets,
tangible or intangible, of ETC-Texas;
(c) Any damage, destruction or property loss, whether or not covered
by insurance, affecting adversely the properties or business of
ETC-Texas;
(d) Any declaration, setting aside or payment of any dividend or
distribution with respect to the shares of capital stock of ETC-Texas
or any redemption, purchase or other acquisition of any such shares;
(e) Any subjection to any lien on any of the assets, tangible or
intangible, of ETC-Texas;
(f) Any incurrence of indebtedness or liability or assumption of
obligations by ETC-Texas;
(g) Any waiver or release by ETC-Texas of any right of any material
value;
(h) Any increase in compensation or benefits to officers or directors
of ETC-Texas;
(i) Any change made or authorized in the Articles of Incorporation or
Bylaws of ETC-Texas;
(j) Except as set forth on Schedule 4.9 hereto, any issuance,
transfer, sale or other disposition by ETC-Texas of any shares of its
capital stock or other equity securities, or any grant of any options,
warrants or other rights to purchase or obtain (including upon
conversion or exercise) shares of its capital stock or other equity
securities;
(k) Any loan to or other transaction with any officer, director or
shareholder of ETC-Texas giving rise to any claim or right of
ETC-Texas against any such person or of such person against ETC-Texas;
or
(l) Any other transaction or commitment entered into other than in the
ordinary course of business by ETC-Texas.
4.9 Undisclosed Liabilities. ETC-Texas has no material liability or
obligation whatsoever, either accrued, absolute, contingent or otherwise.
4.10 Tax Returns and Audits. ETC-Texas has duly and timely filed or caused
to be filed all federal, foreign, state and local income, franchise, sales,
value added and property tax returns (the "Tax Returns") required to be filed
by it and has paid in full or fully reserved against in the Financial
Statements all taxes, interest, penalties, assessments and deficiencies due or
claimed to be due by it to foreign, federal, state or local taxing authorities
(including taxes on properties, income, franchises, licenses, sales, use and
payrolls). The income tax returns filed by ETC-Texas are not being, to the
knowledge of ETC-Texas, examined by the Internal Revenue Service (the "IRS") or
other applicable taxing authorities for any period. All taxes or estimates
thereof that are due as of December 31, 1995, or are claimed or asserted by any
taxing authority to be due as of such date, have been (a) timely and
appropriately paid so as to avoid penalties for underpayment or (b) accrued for
on the balance sheet as of December 31, 1995, as contained in the Financial
Statements. Except for amounts not yet due and payable, all tax liabilities to
which the properties of ETC-Texas may be subject have been paid and
discharged. The provisions for income and other taxes payable reflected in the
Financial Statements make adequate provision for all then accrued and unpaid
taxes of ETC-Texas. There are no tax liens on any property of ETC-Texas, nor
are there any pending or threatened examinations or tax claims asserted.
ETC-Texas has
AGREEMENT AND PLAN OF MERGER - Page 5
9
not been granted any extensions of limitation periods applicable to tax claims.
Since December 31, 1996, except jurisdictions in which ETC-Texas filed tax
returns, no claim has been made by a taxing authority that ETC-Texas is or may
be subject to taxation by that jurisdiction. All copies of Tax Returns
delivered to Transaction Corp. by ETC-Texas are true and correct, and any and
all notices from foreign, federal, state and local taxing authorities, tax
examination reports and statements of deficiencies assessed against or agreed
to by ETC-Texas since December 31, 1996 have been made available to Transaction
Corp. ETC-Texas is not a party to, or bound by, any tax indemnity, tax sharing
or tax allocation agreement. ETC-Texas is not a member of an "affiliated
group," as defined in Section 1504(a) of the Code and is not the owner of any
interest in a partnership, joint venture, trust, limited liability company or
other entity or organization. All positions taken on federal Tax Returns that
could give rise to a penalty for substantial understatement pursuant to Section
6662(d) of the Code have been disclosed on such Tax Returns. ETC-Texas has not
agreed to and is not required to make any adjustment pursuant to Section 481(a)
of the Code (or any predecessor provision) by reason of any change in any
accounting method. ETC-Texas has no application pending with any taxing
authority requesting permission for any changes in any accounting method, and
the IRS has not proposed any such adjustment or change in accounting method.
ETC-Texas is not subject to any limitation under Section 382 or Section 383 of
the Code.
4.11 Real Property. ETC-Texas does not own any real property. ETC-Texas
does lease the premises located at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000 as its principal place of business.
4.12 Books and Records. The books and records of ETC-Texas fairly reflect
the transactions to which ETC-Texas is a party or by which its properties are
bound.
4.13 Questionable Payments. ETC-Texas nor any employee, agent or
representative of ETC-Texas has, directly or indirectly, made any bribes,
kickbacks, illegal payments or illegal political contributions using ETC-Texas
funds or made any payments from ETC-Texas' funds to governmental officials for
improper purposes or made any illegal payments from ETC-Texas' funds to obtain
or retain business.
4.14 Environmental Matters.
(a) Environmental Laws. ETC-Texas is not currently in violation of,
or subject to any existing, pending or threatened investigation or
inquiry by any governmental authority or to any remedial obligations
under, any laws or regulations pertaining to health or the environment
(hereinafter sometimes collectively called "Environmental Laws"),
including without limitation (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. 9601 et
seq.), as amended by the Superfund Amendments and Reauthorization Act
of 1986 ("CERCLA"), and the regulations promulgated thereunder, (ii)
the Resource Conservation and Recovery Act of 1976 (42 U.S.C. 6901 et
seq.), as amended by the Hazardous and Solid Waste Amendment of 1984
("RCRA"), and the regulations promulgated thereunder, (iii) any
statutes, rules or regulations, whether federal, state or local,
relating to asbestos or polychlorinated biphenyls, and (iv) the
provisions contained in any applicable state statutes, rules and
regulations. This representation and warranty would continue to be
true and correct following disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if
any, pertaining to the assets and operations of ETC-Texas.
(b) Use of Assets. To the best knowledge of ETC-Texas, the assets of
ETC-Texas have never been used in a manner that would be in violation
of any of the Environmental Laws, including without limitation CERCLA,
RCRA and any applicable state statutes, rules or regulations.
(c) Permits. ETC-Texas has not obtained and is not required to
obtain, and ETC-Texas has no knowledge of any reason that Transaction
Corp. will be required to obtain, any permits, licenses or similar
authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures and equipment owned or leased by ETC-Texas by
reason of any Environmental Laws.
(d) Superfund List. To the best knowledge of ETC-Texas, none of the
assets owned or leased by ETC-Texas are on any federal or state
"Superfund" list or subject to any environmentally related liens.
AGREEMENT AND PLAN OF MERGER - Page 6
10
4.15 Intellectual Property. Except as set forth on Schedule 4.15, there
are no patents and patent applications, trade names, trademark and service xxxx
registrations and applications for or registered trade dress rights, common law
trademarks and copyright registrations and applications owned by ETC-Texas or
which ETC-Texas is licensed to use.
4.16 Insurance. Except as disclosed on Schedule 4.16, ETC-Texas has no
insurance policies in effect.
4.17 Contracts. Except as disclosed on Schedule 4.17, ETC-Texas has no
material contracts, leases, arrangements and commitments (whether oral or
written). ETC-Texas is not a party to or bound by or affected by any contract,
lease, arrangement or commitment (whether oral or written) relating to: (a)
collective bargaining with, or any representation of any employees by, any
labor union or association; (b) the purchase or sale of real property; (c)
distribution, agency or construction; and (d) lending or advancing of funds.
4.18 Litigation. ETC-Texas is not subject to any judgment or order of any
court or quasijudicial or administrative agency of any jurisdiction, domestic
or foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending or, to the best knowledge of ETC-Texas, threatened
against ETC-Texas. ETC-Texas is not a plaintiff in any action, domestic or
foreign, judicial or administrative. There are no existing actions, suits,
proceedings or investigations of ETC-Texas, and ETC-Texas knows of no basis for
such actions, suits, proceedings or investigations. There are no unsatisfied
judgments, orders, decrees or stipulations affecting ETC-Texas or to which
ETC-Texas is a party.
4.19 Employees. ETC-Texas currently leases 30 persons. ETC-Texas has
entered into written employment agreements with certain officers and/or
directors of ETC-Texas as outlined on Schedule 4.19. ETC-Texas is not a party
to or bound by any collective bargaining agreement. There are no loans or other
obligations payable or owing by ETC-Texas to any shareholder, officer, director
or employee of ETC-Texas, nor are there any loans or debts payable or owing by
any of such persons to ETC-Texas or any guarantees by ETC-Texas of any loan or
obligation of any nature to which any such person is a party.
4.20 Employee Benefit Plans. ETC-Texas has no (a) non-qualified deferred or
incentive compensation or retirement plans or arrangements, (b) qualified
retirement plans or arrangements, (c) other employee compensation, severance or
termination pay or welfare benefit plans, programs or arrangements or (d) any
related trusts, insurance contracts or other funding arrangements maintained,
established or contributed to by ETC-Texas within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended.
4.21 Legal Compliance. No claim has been filed against ETC-Texas alleging a
violation of any applicable laws and regulations of foreign, federal, state and
local governments and all agencies thereof. ETC-Texas holds all of the material
permits, licenses, certificates or other authorizations of foreign, federal,
state or local governmental agencies required for the conduct of its business
as presently conducted.
4.22 Broker's Fees. ETC-Texas nor anyone on its behalf has any liability to
any broker, finder, investment banker or agent, or has agreed to pay any
brokerage fees, finder's fees or commissions, or to reimburse any expenses of
any broker, finder, investment banker or agent in connection with the Merger or
any similar transaction.
4.23 Disclosure. The representations and warranties and statements of fact
made by ETC-Texas in this Agreement and in any Schedule hereto are, as
applicable, accurate, correct and complete and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained herein or therein not
misleading.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE CLOSING
5.1 Conduct of Business by ETC-Texas Pending the Closing. ETC-Texas
covenants and agrees that prior to the Closing Date:
AGREEMENT AND PLAN OF MERGER - Page 7
11
(a) ETC-Texas shall conduct its business and operations only in the
usual and ordinary course of business and consistent with past custom
and practice;
(b) ETC-Texas shall not directly or indirectly do any of the
following: (i) sell, pledge, dispose of or encumber any of its assets;
(ii) amend or propose to amend its Articles of Incorporation or
Bylaws; (iii) split, combine or reclassify any outstanding shares of
its capital stock, or declare, set aside or pay any dividend or other
distribution payable in cash, stock, property or otherwise with
respect to shares of its capital stock; (iv) redeem, purchase or
acquire or offer to acquire any shares of its capital stock or other
securities; (v) create any subsidiaries; (vi) enter into or modify any
contract, agreement, commitment or arrangement with respect to any of
the foregoing;
(c) ETC-Texas shall not (i) issue, sell, pledge or dispose of, or
agree to issue, sell, pledge or dispose of, any additional shares of,
or any options, warrants, conversion privileges or rights of any kind
to acquire any shares of, its capital stock; (ii) acquire (by merger,
consolidation, acquisition of stock or assets or otherwise) any
corporation, partnership or other business organization or division or
the material assets thereof; (iii) incur any indebtedness for borrowed
money, issue any debt securities or guarantee any indebtedness to
others; or (iv) enter into or modify any contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(d) ETC-Texas shall not enter into any employment, severance or
similar agreements or arrangements with, or grant any bonus, salary
increase, severance or termination pay to, any officers or directors;
(e) ETC-Texas shall not adopt any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation, employment
or other employee benefit plan, agreement, trust, fund or arrangement
for the benefit or welfare of any employee;
(f) Except as otherwise required by its Articles of Incorporation or
Bylaws, by this Agreement or by applicable law, ETC-Texas shall not
call any meeting of its shareholders;
(g) ETC-Texas shall (i) use their best efforts not to take any action
which would render, or which reasonably may be expected to render, any
representation or warranty made by it in this Agreement untrue at any
time prior to the Closing Date as if then made; and (ii) notify
Transaction Corp. of any emergency or other change in the normal
course of its business or in the operation of its properties and of
any tax audits, tax claims, governmental or third party complaints,
investigations or hearings (or communications indicating that the same
may be contemplated) if such emergency, change, audit, claim,
complaint, investigation or hearing would be material, individually or
in the aggregate, to the financial condition, results of operations or
business of ETC-Texas, or to the ability of any of the parties hereto
to consummate the transactions contemplated by this Agreement;
(h) ETC-Texas shall notify Transaction Corp. promptly of any material
adverse event or circumstance affecting ETC-Texas (including the
filing of any material litigation against ETC-Texas or the existence
of any dispute with any person or entity which involves a reasonable
likelihood of such litigation being commenced); and
(i) ETC-Texas shall comply with all legal requirements and contractual
obligations applicable to its operations and business and pay all
applicable taxes.
5.2 Other Actions. Unless approved in writing by Transaction Corp.,
ETC-Texas shall not take any action or permit any action to occur that might
reasonably be expected to result in any of the representations and warranties
of ETC- Texas contained in this Agreement becoming untrue after the date hereof
or any of the conditions to the Closing set forth in Article 7 of this
Agreement not being satisfied.
AGREEMENT AND PLAN OF MERGER - Page 8
12
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Access and Information. Except for information relating to any claims
any party may have against the other, ETC-Texas and Transaction Corp. shall
each afford to the other and to the other's financial advisors, legal counsel,
accountants, consultants and other representatives full access during normal
business hours throughout the period prior to the Effective Time to all of its
books, records, properties and personnel and, during such period, each shall
furnish promptly to the other (a) a copy of each report, schedule and other
document filed or received by it pursuant to the requirements of federal or
state securities laws, and (b) all other information as such other party may
reasonably request. Each party shall hold in confidence all non-public
information until such time as such information is otherwise publicly available
and, if this Agreement is terminated, each party will upon written request
deliver to the other all documents, work papers and other material obtained by
such party or on its behalf from the other party as a result of this Agreement
or in connection herewith, whether so obtained before or after the execution
hereof.
6.2 Registration Statement. ETC-Texas and Transaction Corp. shall jointly
prepare and file with the SEC as soon as practicable a Registration Statement
on Form S-4 (the "Registration Statement") under the Securities Act with
respect to all issued and outstanding Transaction Corp. Common Stock as well as
stock to be issued in the Merger. The Registration Statement shall also serve
as the proxy statement with the respect to the meetings of the respective
shareholders of ETC-Texas and Transaction Corp. to approve the Merger and the
transactions contemplated thereby. ETC-Texas and Transaction Corp. shall use
their reasonable best efforts to have the Registration Statement declared
effective by the SEC as promptly as practicable. ETC-Texas and Transaction
Corp. shall use their reasonable best efforts to obtain, prior to the effective
date of the Registration Statement, all necessary state securities or blue sky
permits or approvals required to carry out the transactions contemplated by the
Registration Statement. The Registration Statement, when declared effective by
the SEC, will not include an untrue statement of material fact or omit to state
a material fact which is required to be stated or that is necessary to make a
statement not misleading in light of the circumstances in which it is made.
6.3 Press Releases. ETC-Texas and Transaction Corp. shall consult with
each other as to the form and substance of any press release or other public
disclosure of matters related to this Agreement or any of the transactions
contemplated hereby; provided, however, that nothing in this Section 6.3 shall
be deemed to prohibit any party hereto from making any disclosure that is
required to fulfill such party's disclosure obligations imposed by law,
including, without limitation, federal, state or provincial securities laws.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Each Party to Effect the Closing. The
respective obligations of each party to effect the Closing shall be subject to
the fulfillment on or prior to the Closing Date of the following conditions:
(a) Transaction Corp. will have been continued and domesticated in
the State of Delaware;
(b) The Registration Statement shall have been deemed and declared
effective by the SEC, no stop order with respect thereto shall be in
effect and no proceedings for the purpose of suspending the
effectiveness of the Registration Statement shall have been issued by
the SEC;
(c) The Merger shall have been approved by the shareholders of
ETC-Texas and Transaction Corp., respectively, in accordance with the
laws of the State of Texas and the Province of Alberta, respectively;
and
(d) No order shall have been entered and remain in effect in any
action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal
the consummation of the transactions contemplated hereby.
AGREEMENT AND PLAN OF MERGER - Page 9
13
7.2 Additional Conditions to Transaction Corp.'s Obligations. The
obligations of Transaction Corp. to effect the Closing are subject to the
satisfaction of the following additional conditions on or before the Closing
Date:
(a) The representations and warranties set forth in Article 4 of this
Agreement will be true and correct in all material respects as of the
date hereof and at and as of the Closing Date as though then made;
(b) ETC-Texas shall have performed, in all material respects, each
obligation and agreement and complied with each covenant to be
performed and complied with by it under Articles 5 and 6 of this
Agreement prior to the Closing Date;
(c) All consents by governmental or regulatory agencies or otherwise
that are required for the consummation of the transactions
contemplated hereby or that are required for Transaction Corp. to own,
operate or control ETC-Texas or any portion of the assets of
ETC-Texas to prevent a breach of or a default under or a termination
of any agreement material to ETC-Texas to which ETC-Texas is a party
or to which any material portion of the assets of ETC-Texas is
subject, will have been obtained;
(d) No action or proceeding before any court or governmental body will
be pending or threatened wherein a judgment, decree or order would
prevent any of the transactions contemplated hereby or cause such
transactions to be declared unlawful or rescinded or which might
adversely affect the right of Transaction Corp. to own, operate or
control ETC-Texas;
(e) Transaction Corp. and its financial and legal advisors shall have
completed a due diligence review of the business, operations and
financial statements of ETC-Texas, the results of which shall be
satisfactory to Transaction Corp. in its sole discretion; and
(f) At the Closing, ETC-Texas shall have delivered or caused to be
delivered to Transaction Corp. the following:
(i) a certificate executed on behalf of ETC-Texas stating that
the conditions set forth in Sections 7.2(a) through (d) of
this Agreement have been satisfied;
(ii) certified copies of the resolutions duly adopted by
ETC-Texas' Board of Directors authorizing and approving the
Merger and the execution, delivery and performance of this
Agreement;
(iii) certified copies of resolutions duly adopted by
ETC-Texas' shareholders authorizing and approving the Merger
and the execution, delivery and performance of this Agreement;
(iv) certificates of good standing or comparable certificates
for ETC-Texas from the jurisdiction of its incorporation and
from every jurisdiction where a failure to be qualified or
licensed would have a material adverse effect on its financial
condition, results of operations or business, dated not
earlier than five (5) days prior to the Closing Date;
(v) a copy of ETC-Texas' Articles of Incorporation certified
as of a recent date by the Secretary of State of the State of
Texas;
(vi) an incumbency certificate of the officers of ETC-Texas;
and
(vii) such other documents as Transaction Corp. may reasonably
request in connection with the transactions contemplated
hereby.
7.3 Additional Conditions to ETC-Texas' Obligations. The obligations of
ETC-Texas to effect the Closing are subject to the satisfaction of the
following conditions on or before the Closing Date:
(a) The representations and warranties set forth in Article 3 of this
Agreement will be true and correct in all material respects as of the
date hereof and at and as of the Closing Date as though then made;
AGREEMENT AND PLAN OF MERGER - Page 10
14
(b) Transaction Corp. shall have performed, in all material respects,
each obligation and agreement and complied with each covenant required
to be performed and complied with by it under Article 6 of this
Agreement prior to the Closing Date;
(c) No action or proceeding before any court or governmental body will
be pending or threatened wherein a judgment, decree or order would
prevent any of the transactions contemplated hereby or cause such
transactions to be declared unlawful or rescinded;
(d) On the Closing Date, Transaction Corp. shall have delivered to
ETC-Texas the following:
(i) a certificate executed on behalf of Transaction Corp.
stating that the conditions set forth in Sections 7.3(a)
through (c) of this Agreement have been satisfied;
(ii) certified copies of resolutions duly adopted by
Transaction Corp.'s Board of Directors authorizing and
approving the Merger and the execution, delivery and
performance of this Agreement;
(iii) certified copies of the resolutions duly adopted by the
shareholders of Transaction Corp. authorizing and approving
the Merger and the execution, delivery and performance this
Agreement;
(iv) a good standing certificate for Transaction Corp. from
the Secretary of State of the State of Delaware, dated not
earlier than five (5) days prior to the Closing Date;
(v) a copy of Transaction Corp.'s Certificate of
Incorporation certified by the Secretary of State of the State
of Delaware;
(vi) an incumbency certificate of the officers of
Transaction Corp.; and
(vii) such other documents as ETC-Texas may reasonably
request in connection with the transactions contemplated
hereby.
ARTICLE 8
REMEDIES
8.1 Indemnification by ETC-Texas. Subject to the terms and conditions of
this Article 8, ETC-Texas agrees to indemnify, defend and hold Transaction
Corp. and its directors, officers, agents, attorneys and affiliates harmless
from and against all losses, claims, obligations, demands, assessments,
penalties, liabilities, costs, damages, attorneys' fees and expenses
(collectively, "Damages"), asserted against or incurred by any such person or
entity by reason of or resulting from a breach of any representation, warranty
or covenant of ETC-Texas contained in this Agreement.
8.2 Indemnification by Transaction Corp. Subject to the terms and
conditions of is Article 8, Transaction Corp. hereby agrees to indemnify,
defend and hold ETC-Texas and its directors, officers, agents, attorneys and
affiliates harmless from and against all Damages asserted against or incurred
by any such person or entity by reason of or resulting from a breach of any
representation, warranty or covenant of Transaction Corp. contained in this
Agreement.
8.3 Conditions of Indemnification. The respective obligations and
liabilities of ETC-Texas and Transaction Corp. (the "indemnifying party") to
the other (the "party to be indemnified") under Sections 8.1 and 8.2 with
respect to claims resulting from the assertion of liability by third parties
shall be subject to the following terms and conditions:
(a) Within 20 days (or such earlier time as might be required to
avoid prejudicing the indemnifying party's position) after receipt of
notice of commencement of any action evidenced by service of process
or other legal pleading, the party to be indemnified shall give the
indemnifying party written notice
AGREEMENT AND PLAN OF MERGER - Page 11
15
thereof together with a copy of such claim, process or other legal
pleading, and the indemnifying party shall have the right to undertake
the defense thereof by representatives of its own choosing and at its
own expense; provided that the party to be indemnified may participate
in the defense with counsel of its own choice, the fees and expenses
of which counsel shall be paid by the party to be indemnified unless
(i) the indemnifying party has agreed to pay such fees and expenses,
(ii) the indemnifying party has failed to assume the defense of such
action or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnifying party and the party
to be indemnified and the party to be indemnified has been advised by
counsel that there may be one or more legal defenses available to it
that are different from or additional to those available to the
indemnifying party (in which case, if the party to be indemnified
informs the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such action on behalf of the party to be indemnified, it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys at any time for the party to be indemnified, which firm
shall be designated in writing by the party to be indemnified).
(b) If the indemnifying party, by the 30th day after receipt of
notice of any such claim (or, if earlier, by the 10th day preceding
the day on which an answer or other pleading must be served in order
to prevent judgment by default in favor of the person asserting such
claim), does not elect to defend against such claim, the party to be
indemnified will (upon further notice to the indemnifying party) have
the right to undertake the defense, compromise or settlement of such
claim on behalf of and for the account and risk of the indemnifying
party and at the indemnifying party's expense, subject to the right of
the indemnifying party to assume the defense of such claims at any
time prior to settlement, compromise or final determination thereof.
(c) Notwithstanding the foregoing, the indemnifying party shall not
settle any claim without the consent of the party to be indemnified
unless such settlement involves only the payment of money and the
claimant provides to the party to be indemnified a release from all
liability in respect of such claim. If the settlement of the claim
involves more than the payment of money, the indemnifying party shall
not settle the claim without the prior consent of the party to be
indemnified.
(d) The party to be indemnified and the indemnifying party will each
cooperate with all reasonable requests of the other.
8.4 Waiver. No waiver by any party of any default or breach by another
party of any representation, warranty, covenant or condition contained in this
Agreement shall be deemed to be a waiver of any subsequent default or breach by
such party of the same or any other representation, warranty, covenant or
condition. No act, delay, omission or course of dealing on the part of any
party in exercising any right, power or remedy under this Agreement or at law
or in equity shall operate as a waiver thereof or otherwise prejudice any of
such party's rights, powers and remedies. All remedies, whether at law or in
equity, shall be cumulative and the election of any one or more shall not
constitute a waiver of the right to pursue other available remedies.
8.5 Remedies Not Exclusive. The remedies provided in this Article 8 shall
not be exclusive of any other rights or remedies available to one party against
the other, either at law or in equity.
ARTICLE 9
TERMINATION
9.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time by the
mutual consent of the parties hereto.
9.2 Termination by Any Party. This Agreement may be terminated and the
Merger may be abandoned by action of the Board of Directors of any party hereto
if a United States federal or state court of competent jurisdiction or United
States federal or state governmental, regulatory or administrative agency or
commission
AGREEMENT AND PLAN OF MERGER - Page 12
16
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and non-appealable; provided, that the party seeking to
terminate this Agreement pursuant to this clause shall have used all reasonable
efforts to remove such injunction, order or decree.
9.3 Effect of Termination and Abandonment. In the event of termination of
this Agreement and the abandonment of the Merger pursuant to this Article 9,
all obligations of the parties hereto shall terminate, except the obligations
of the parties pursuant to Section 6.1.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
sent by telex, telecopy, facsimile or overnight courier, or mailed by
registered or certified mail (postage prepaid and return receipt requested), to
the party to whom the same is so delivered, sent or mailed at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Transaction Corp.:
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: L. Xxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) if to ETC-Texas:
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: L. Xxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
10.2 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
10.3 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 of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify this Agreement to preserve each party's anticipated
benefits under this Agreement.
10.4 Miscellaneous. This Agreement (together with all other documents and
instruments referred to herein): (a) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof; (b) except as
expressly set forth herein, is not intended to confer upon any other person any
rights or remedies hereunder and (c) shall not be assigned by operation of law
or otherwise.
10.5 Separate Counsel. Each party hereby expressly acknowledges that it
has been advised and urged to seek its own separate legal counsel for advice
with respect to this Agreement.
10.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF
TEXAS, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
AGREEMENT AND PLAN OF MERGER - Page 13
17
10.7 Counterparts. This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ETC-TEXAS:
ELECTRONIC TRANSMISSION CORPORATION
By: /s/ L. Xxxx Xxxxxx
-----------------------------
Name: L. Xxxx Xxxxxx
Its: Chief Executive Officer
TRANSACTION CORP.:
ETC TRANSACTION CORPORATION
By: /s/ L. Xxxx Xxxxxx
-----------------------------
Name: L. Xxxx Xxxxxx
Its: Chief Executive Officer
AGREEMENT AND PLAN OF MERGER - Page 14
