EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ENERGY SERVICES ACQUISITION CORP.
AND
X. X. XXXXXX CONSTRUCTION COMPANY, INC.
DATED AS OF FEBRUARY 21, 2008
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TABLE OF CONTENTS
Page
ARTICLE I. CERTAIN DEFINITIONS................................................1
Section 1.01 Certain Definitions................................1
ARTICLE II. THE MERGER........................................................5
Section 2.01 Structure of the Merger............................5
Section 2.02 Effect on Outstanding Shares.......................5
Section 2.03 Exchange Procedures................................6
Section 2.04 Dissenters' Rights.................................7
Section 2.05 Closing; Effective Time............................7
Section 2.06 Additional Transaction.............................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER.........................7
Section 3.01 Disclosure Letter..................................7
Section 3.02 Organization.......................................7
Section 3.03 Capitalization.....................................8
Section 3.04 Authority; No Violation............................8
Section 3.05 Consents...........................................9
Section 3.06 Absence of Certain Changes or Events...............9
Section 3.07 Taxes..............................................9
Section 3.08 Material Contracts; Leases; Defaults..............11
Section 3.09 Ownership of Property; Insurance Coverage.........12
Section 3.10 Intellectual Property.............................13
Section 3.11 Labor Matters.....................................14
Section 3.12 Legal Proceedings.................................14
Section 3.13 Compliance With Applicable Law/Permits............14
Section 3.14 Employee Benefit Plans............................14
Section 3.15 Brokers, Finders and Financial Advisors...........16
Section 3.16 Environmental Matters.............................16
Section 3.17 Related Party Transactions........................17
Section 3.18 Antitakeover Provisions Inapplicable..............17
Section 3.19 Customers and Suppliers...........................17
Section 3.20 Inventory.........................................18
Section 3.21 Accounts Receivable; Bank Accounts................18
Section 3.22 Offers............................................18
Section 3.23 Warranties........................................18
Section 3.24 Proxy Statement...................................18
Section 3.25 No Misstatements..................................19
Section 3.26 Investment Intent.................................19
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER......................19
Section 4.01 Organization......................................19
Section 4.02 Authority; No Violation...........................20
Section 4.03 Consents..........................................20
Section 4.04 Access to Funds/Merger Consideration..............20
Section 4.05 Legal Proceedings.................................20
Section 4.06 Operations of Merger Sub..........................20
Section 4.07 Board Approval....................................21
Section 4.08 Proxy Statement...................................21
Section 4.09 Offers............................................21
Section 4.10 Related Party.....................................21
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ARTICLE V. CONDUCT PENDING ACQUISITION.......................................21
Section 5.01 Conduct of Business Prior to the Effective Time...21
Section 5.02 Forbearances of Seller............................22
Section 5.03 Maintenance of Insurance..........................24
Section 5.04 All Reasonable Efforts............................24
ARTICLE VI. COVENANTS........................................................24
Section 6.01 Current Information...............................24
Section 6.02 Access to Properties and Records..................24
Section 6.03 Financial and Other Statements....................25
Section 6.04 Disclosure Letter Supplements.....................25
Section 6.05 Consents and Approvals of Third Parties...........25
Section 6.06 Failure to Fulfill Conditions.....................25
Section 6.07 Employee Benefits.................................25
Section 6.08 Tax Periods Ending On or Before the Closing Date..25
Section 6.09 Cooperation on Tax Matters........................26
Section 6.10 Acquisition of Contractors Rental Corporation.....26
ARTICLE VII. REGULATORY AND OTHER MATTERS....................................26
Section 7.01 Meeting of Stockholders...........................26
Section 7.02 Proxy Statement...................................27
Section 7.03 Regulatory Approvals..............................27
ARTICLE VIII. CLOSING CONDITIONS.............................................27
Section 8.01 Conditions to Each Party's Obligations under
this Agreement...................................27
Section 8.02 Conditions to the Obligations of Purchaser
under this Agreement.............................28
Section 8.03 Conditions to the Obligations of Seller under
this Agreement...................................29
ARTICLE IX. THE CLOSING......................................................29
Section 9.01 Time and Place....................................29
Section 9.02 Deliveries at the Pre-Closing and the Closing.....30
ARTICLE X. TERMINATION, AMENDMENT AND WAIVER.................................30
Section 10.01 Termination.......................................30
Section 10.02 Effect of Termination.............................31
Section 10.03 Amendment, Extension and Waiver...................31
ARTICLE XI. MISCELLANEOUS....................................................32
Section 11.01 Public Announcements..............................32
Section 11.02 Survival..........................................32
Section 11.03 Notices...........................................32
Section 11.04 Parties in Interest...............................33
Section 11.05 Complete Agreement................................33
Section 11.06 Counterparts......................................33
Section 11.07 Severability......................................33
Section 11.08 Governing Law.....................................33
Section 11.09 Interpretation....................................33
Section 11.10 Specific Performance..............................34
Exhibit A Form of Plan of Merger
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
February 21, 2008, by and between Energy Services Acquisition Corp., a Delaware
corporation (the "Purchaser"), Energy Services Merger Sub II ("Merger Sub"), a
to-be-formed West Virginia corporation and a wholly-owned subsidiary of
Purchaser, and X. X. Xxxxxx Construction Company, Inc., a West Virginia
corporation (the "Seller").
WHEREAS, the Board of Directors of each of Purchaser and Seller has (i)
determined that this Agreement and the business combination and related
transactions contemplated hereby are in the best interests of their respective
companies and stockholders, and (ii) has approved this Agreement at meetings of
each of such Boards of Directors;
WHEREAS, in accordance with the terms of this Agreement, Merger Sub will
merge with and into Seller;
WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the business transactions described in this
Agreement and to prescribe certain conditions thereto.
NOW, THEREFORE in consideration of the mutual covenants, representations,
warranties and agreements herein contained and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I.
CERTAIN DEFINITIONS
Section 1.01 Certain Definitions.
As used in this Agreement the following terms have the following meanings
(unless the context otherwise requires, references to Articles and Sections
refer to Articles and Sections of this Agreement).
"Agreement" means this agreement, and any written amendment hereto.
"Certificate" shall mean a certificate evidencing shares of Seller Common
Stock.
"Closing" shall have the meaning set forth in Section 2.05.
"Closing Date" shall have the meaning set forth in Section 2.05.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" shall have the meaning set forth in
Section 3.16(a).
"Confidentiality Agreements" shall mean the confidentiality agreements
referred to in Section 10.01 of this Agreement.
"Continuing Employees" shall have the meaning set forth in Section 6.08(c).
"DGCL" shall mean the Delaware General Corporation Law.
"Disclosure Letter" shall have the meaning set forth in Section 3.01.
"Effective Time" shall mean the date and time specified pursuant to Section
2.05 hereof as the effective time of the Merger.
"Environmental Laws" means any applicable Federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any
governmental entity relating to (1) the protection, preservation or restoration
of the environment (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface soil, subsurface soil, plant
and animal life or any other natural resource), and/or (2) the exposure to, or
the use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Materials of
Environmental Concern. The term Environmental Law includes without limitation
(a) the Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. ss.9601, et seq; the Resource Conservation and Recovery Act,
as amended, 42 U.S.C. ss.6901, et seq; the Clean Air Act, as amended, 42 U.S.C.
ss.7401, et seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
ss.1251, et seq; the Toxic Substances Control Act, as amended, 15 U.S.C.
ss.2601, et seq; the Emergency Planning and Community Right to Know Act, 42
U.S.C. ss.11001, et seq; the Safe Drinking Water Act, 42 U.S.C. ss.300f, et seq;
the Comprehensive Environmental Responses Compensation and Liability Information
System List and all comparable state and local laws, and (b) any common law
(including without limitation common law that may impose strict liability) that
may impose liability or obligations for injuries or damages due to the presence
of or exposure to any Materials of Environmental Concern.
"EPA" shall mean the Environmental Protection Agency.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall have the meaning set forth in Section 3.16(c).
"ERISA Affiliate Plan" shall have the meaning set forth in Section 3.16(c).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"GAAP" shall mean accounting principles generally accepted in the United
States of America.
"Governmental Entity" shall mean any federal, state, local or other
government, governmental, regulatory or administrative authority, agency or
commission (including, but not limited to, the SEC, NASDAQ, or EPA) or any
court, tribunal or judicial or arbitral body.
"HIPAA" shall mean the Health Insurance Portability and Accountability Act
of 1996, as amended.
"Intellectual Property" shall mean all (i) trademarks, service marks, brand
names, d/b/a/'s, Internet domain names, logos, symbols, trade dress, trade
names, and other indicia of origin, all applications and registrations for the
foregoing, and all goodwill associated therewith and symbolized thereby,
including all renewals of same, (ii) inventions and discoveries, whether
patentable or not, and all patents, registrations, invention disclosures and
applications therefor, including divisions, continuations, continuations-in-part
and renewal applications, and including renewals, extensions and reissues, (iii)
Trade Secrets, (iv) published and unpublished works of authorship, whether
copyrightable or not (including without limitation databases and other
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compilations of information), copyrights therein and thereto, and registrations
and applications therefor, and all renewals, extensions, restorations and
reversions thereof, and (v) all other intellectual property or proprietary
rights.
"IRS" shall mean the United States Internal Revenue Service.
"IT Assets" shall mean Seller's computers, computer software, firmware,
middleware, servers, workstations, routers, hubs, switches, data communications
lines, and all other information technology equipment, and all associated
documentation.
"Knowledge" as used with respect to a Person (including references to such
Person being aware of a particular matter) means those facts that are known by
any officer with the title ranking not less than vice president or a director of
such Person, or a consultant, or full-time or part-time employee of Seller and
includes any facts, matters or circumstances set forth in any written notice
from any regulatory agency or any other material written notice received by an
officer with the title ranking not less than vice president or a director of
that Person. For purposes of this definition, an officer or director will be
deemed to have "Knowledge" of a particular fact or other matter if a prudent
individual could be expected to discover or otherwise become aware of such fact
or other matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter.
"Licensed Intellectual Property" means Intellectual Property that Seller
has licensed or otherwise is permitted by other Persons to use.
"Listed Intellectual Property" shall have the meaning set forth in Section
3.10(a).
"Material Adverse Effect" shall mean an effect which (A) is material and
adverse to the assets, business, financial condition, results of operations or
prospects of Seller or Purchaser, as the context may dictate, or (B) adversely
affects the ability of Seller or Purchaser, as the context may dictate, to
perform its material obligations hereunder or (C) materially and adversely
affects the timely consummation of the transactions contemplated hereby.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products, and any other
materials regulated under Environmental Laws, including, but not limited to,
radon, radioactive material, asbestos, asbestos-containing material, urea
formaldehyde foam insulation, lead, polychlorinated biphenyl, flammables and
explosives.
"Merger" shall mean the merger of Seller with and into Merger Sub pursuant
to the terms hereof.
"Merger Consideration" shall mean the cash and Purchaser common stock in an
aggregate per share amount to be paid by Purchaser for each share of Seller
Stock, as set forth in Section 2.02(a).
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Paying Agent" shall mean such bank or trust company or other agent
designated by Purchaser, which shall act as agent for Purchaser in connection
with the exchange procedures for exchanging Certificates for the Merger
Consideration. Purchaser may act as its own Paying Agent.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any successor
thereto.
"Person" shall mean any individual, consultant (including part-time
employee) corporation, partnership, joint venture, association, trust or "group"
(as that term is defined under the Exchange Act).
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"Pre-Effective Time Tax Period" means any taxable period (or the allocable
portion of a Straddle Period) ending on or before the close of business on the
date the Effective Time occurs.
"Proxy Statement" shall have the meaning set forth in Section 7.02.
"Purchaser" shall mean Energy Services Acquisition Corp., a Delaware
corporation, with its principal executive offices located at 0000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000.
"Rights" shall mean warrants, options, rights, convertible securities,
stock appreciation rights and other arrangements or commitments which obligate
an entity to issue or dispose of any of its capital stock or other ownership
interests or which provide for compensation based on the equity appreciation of
its capital stock.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended; and the rules and
regulations of the SEC promulgated thereunder.
"Seller" shall have the meaning set forth in the preamble.
"Seller Group" means any combined, unitary, consolidated or other
affiliated group within the meaning of Section 1504 of the Code or otherwise, of
which Seller has been a member for Tax purposes.
"Seller Stock" shall mean the shares of issued and outstanding shares of
Class A voting common stock and Class B non-voting common stock of the Seller.
"Seller Stockholders Meeting" shall have the meaning set forth in Section
7.01.
"Stockholder Approval" shall have the meaning set forth in Section 8.01(a).
"Straddle Period" means any taxable period that includes (but does not end
on) the Closing Date.
"Superior Proposal" shall mean an Acquisition Proposal, which the Board of
Directors of Seller reasonably determines (after consultation with a financial
advisor of nationally recognized reputation) to be (i) more favorable to the
stockholders of Seller from a financial point of view than the Merger (taking
into account all the terms and conditions of such proposal and this Agreement
(including any changes to the financial terms of this Agreement proposed by
Purchaser in response to such offer or otherwise)) and (ii) reasonably capable
of being completed, taking into account all financial, legal, regulatory and
other aspects of such proposal.
"Surviving Corporation" shall have the meaning set forth in Section 2.01.
"Tax" means any and all (a) federal, state, local or foreign tax, fee or
other like assessment or charge of any kind, including, without limitation, any
net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, value-added, transfer, franchise, profits, license,
payroll, employment, social security (or similar), unemployment, disability,
registration, estimated, excise, severance, stamp, capital stock, occupation,
property, environmental or windfall tax, premium, customs duty or other tax,
together with any interest, penalty or additions thereto, whether disputed or
not; (b) liability for the payment of Tax as the result of membership in the
Seller Group; and (c) transferee or secondary liability in respect of any Tax
(whether imposed by law or contractual arrangement).
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"Tax Return" means any return (including estimated returns), declaration,
report, claim for refund, or information return or statement or any amendment
thereto relating to Taxes, including any such document prepared on an
affiliated, consolidated, combined or unitary group basis and any schedule or
attachment thereto.
"Taxing Authority" means any governmental or regulatory authority, body or
instrumentality exercising any authority to impose, regulate or administer the
imposition of Taxes.
"Termination Date" shall mean August 30, 2008.
"Trade Secrets" means confidential information, trade secrets and know-how,
including confidential processes, schematics, business methods, formulae,
drawings, prototypes, models, designs, customer lists and supplier lists.
"Treasury Stock" means all shares of Seller Stock held in the treasury of
Seller (other than shares held in a fiduciary capacity or in connection with
debts previously contracted).
"WVBCA" shall mean the West Virginia Business Corporation Act.
Other terms used herein are defined in the preamble and elsewhere in this
Agreement.
ARTICLE II.
THE MERGER
Section 2.01 Structure of the Merger.
Subject to the terms and conditions of this Agreement, Purchaser will cause
a West Virginia corporation to be organized as a wholly owned special purpose
Subsidiary of Purchaser ("Merger Sub"). At the Effective Time, Merger Sub will
merge with and into Seller, with Seller being the surviving entity (the
"Surviving Corporation"), pursuant to the provisions of, and with the effect
provided in, the WVBCA and pursuant to the terms and conditions of an agreement
and plan of merger ("Plan of Merger") to be entered into between Merger Sub and
Seller in the form attached hereto as Exhibit A. The separate corporate
existence of Merger Sub shall thereupon cease. The Surviving Corporation shall
be governed by the laws of the State of West Virginia and its separate corporate
existence with all of its rights, privileges, immunities, powers and franchises
shall continue unaffected by the Merger. At the Effective Time, the certificate
of incorporation and bylaws of Seller shall be amended in their entirety to
conform to the certificate of incorporation and bylaws of Merger Sub in effect
immediately prior to the Effective Time and shall become the certificate of
incorporation and bylaws of the Surviving Corporation. At the Effective Time,
the directors and officers of Merger Sub shall become the directors and officers
of the Surviving Corporation. As part of the Merger, each share of Seller Common
Stock will be converted into the right to receive the Merger Consideration
pursuant to the terms of Section 2.03. Seller acknowledges that the structure
may change in the event Purchaser enters into an agreement to engage in an
"Additional Transaction" as defined in Section 4.09. Notwithstanding the
foregoing, Purchaser may, at its own discretion, alter the means by which the
Merger is affected provided that such alteration does not change the (i) form
and amount of the Merger Consideration or (ii) tax consequences of the Merger to
Seller's shareholders.
Section 2.02 Effect on Outstanding Shares.
(a) By virtue of the Merger, automatically and without any action on the
part of the holder thereof, each share of Seller Stock, issued and outstanding
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at the Effective Time shall become and be converted into the right to receive
(i) $36,896 in cash and (ii) 6,434.70 shares of Purchaser Common Stock (the
"Merger Consideration"). The total Merger Consideration shall be approximately
50% cash and 50% common stock with a total value of $34.0 million at the date of
this Agreement. Fractional shares of Purchaser Common Stock will not be issued
in the merger. Fractional shares shall be cashed out in an amount determined by
multiplying the fractional share interest to which such holder would be entitled
by $36,896.
(b) As of the Effective Time, all shares of Seller Stock shall no longer be
outstanding and shall be automatically cancelled and retired and shall cease to
exist, and each holder of a Certificate formerly representing any such share of
Seller Stock shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration. After the Effective Time, there shall
be no transfers on the stock transfer books of Seller.
(c) The Shares of Purchaser common stock to be issued to Seller
Stockholders as contemplated in Section 2.02(a) will not be registered under the
Securities Act or registered or qualified for sale under any state securities
Law and cannot be resold without registration or an exemption under the
Securities Act. Such shares will therefore be "restricted securities" as defined
in Rule 144 under the Securities Act. Each certificate representing the
Purchaser common stock shall bear a restrictive legend referencing the
Securities Act. Purchaser agrees that in the event Purchaser registers with the
Securities and Exchange Commission any shares held by its stockholders it will
include as part of the registration statement shares issued to Seller
Stockholders.
(d) Notwithstanding the foregoing, Purchaser and Seller agree that the
number of shares of Purchaser Common Stock issued as Merger Consideration may be
increased in order to ensure that the Merger qualifies as a tax free
reorganization at the corporate level. In this regard, Purchaser shall increase
the Purchaser Common Stock component to cause the aggregate value of the
Purchaser Common Stock component to equal at least forty percent (40%) of the
Merger Consideration (which determination shall be based upon the high and low
trading price of Purchaser Common Stock on the five trading days preceding the
date of the Effective Time.
Section 2.03 Exchange Procedures.
(a) Immediately prior to the Effective Time, each Certificate previously
representing shares of Seller Stock shall represent only the right to receive
the Merger Consideration.
(b) As of the Effective Time, Purchaser shall deposit, or shall cause to be
deposited with the Paying Agent pursuant to the terms of an agreement (the
"Paying Agent Agreement") in form and substance reasonably satisfactory to
Purchaser, for the benefit of the holders of shares of Seller Stock, for
exchange in accordance with this Section 2.03, an amount of cash and a number of
shares sufficient to pay the aggregate Merger Consideration to be paid pursuant
to Section 2.02(a) and a number of shares. Purchaser may act as its own paying
agent.
(c) At the Effective Time, each Seller shall present their stock
certificate to Purchaser for payment of the Merger Consideration as described at
Section 2.02.
(d) From and after the Effective Time, there shall be no transfers on the
stock transfer records of Seller of any shares of Seller Stock that were
outstanding immediately prior to the Effective Time. If after the Effective Time
Certificates are presented to Purchaser or the Surviving Corporation, they shall
be canceled and exchanged for the Merger Consideration deliverable in respect
thereof pursuant to this Agreement in accordance with the procedures set forth
in this Section 2.03.
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Section 2.04 Dissenters' Rights.
Holders of Seller Stock shall be entitled to seek appraisal of dissenters'
rights of appraisal under the WVBCA.
Section 2.05 Closing; Effective Time.
Subject to the satisfaction or waiver of all conditions to closing
contained in Article VIII hereof, the Closing shall occur (i) no later than five
business days following the latest to occur of (a) the receipt of all required
regulatory approvals and the expiration of any applicable waiting periods, or
(b) the approval of the Merger by the stockholders of Seller and Purchaser, or
(ii) at such other date or time upon which Purchaser and Seller mutually agree
(the "Closing"). The Merger shall be effected by the filing of a certificate of
merger with the West Virginia Secretary of State on the day of the Closing (the
"Closing Date"), in accordance with the WVBCA. The "Effective Time" means the
date and time upon which the certificate of merger is filed with the Delaware
and the West Virginia Office of the Secretary of State, or as otherwise stated
in the certificate of merger, in accordance with the WVBCA.
Section 2.06 Additional Transaction.
Notwithstanding anything contained in this Agreement, the parties
acknowledge that in order to consummate the Merger, the Purchaser must enter
into a business combination or combinations in which the fair market value of
the business or businesses acquired simultaneously with the transaction
contemplated by this Agreement is equal to at least 80% of Purchaser's net
assets (excluding any deferred compensation held by Xxxxxx Xxxxx Xxxxx,
Incorporated) when combined with the transactions contemplated by this
Agreement. The Seller acknowledges that the Merger must be completed
simultaneously with such other business combination or combinations, referenced
to in this Section.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the statements contained
in this Article III are true and correct as of the date of this Agreement and
will be true and correct as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Article III), except as set forth in the Disclosure Letter (as
defined below) delivered by Seller to Purchaser prior to the execution of this
Agreement.
Section 3.01 Disclosure Letter.
On or prior to the date hereof, Seller has delivered to Purchaser a letter
(the "Disclosure Letter") setting forth, among other things, facts,
circumstances and events the disclosure of which are required or appropriate in
relation to any or all of its covenants, representations and warranties (and
making specific reference to the section of this Agreement to which such section
of the Disclosure Letter relates); provided, that the mere inclusion of a fact,
circumstance or event in the Disclosure Letter shall not be deemed an admission
by a party that such item represents a material exception or that such item is
reasonably likely to result in a Material Adverse Effect. The Disclosure Letter
is true, correct and complete in all material respects.
Section 3.02 Organization.
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of West Virginia. Seller has all requisite
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corporate power and authority to own, lease and operate its properties and carry
on its business as now conducted. Seller is duly licensed or qualified to do
business in each jurisdiction where its ownership or leasing of property or the
conduct of its business requires such qualification.
(b) Seller has one wholly owned Subsidiary, Nitro Electric Company LLC and
one related entity, Contractors Rental Corporation which is not owned by Seller,
but which has related ownership with Seller and consequently whose operations
are consolidated with Seller for financial reporting purposes. The Disclosure
Letter sets forth all entities (whether corporations, partnerships, or similar
organizations), including the corresponding percentage ownership in which Seller
owns, directly or indirectly, 5% or more of the ownership interests as of the
date of this Agreement, indicates its jurisdiction of organization and the
jurisdiction wherein it is qualified to do business.
(c) Prior to the date of this Agreement, Seller has made available to
Purchaser true and correct copies of the certificate of incorporation or charter
and bylaws of Seller.
Section 3.03 Capitalization.
(a) The authorized capital stock of Seller consists of 5,000 shares of
Seller Stock, consisting of 1,000 shares of Class A voting common stock and
4,000 shares of Class B non-voting common stock. As of the date of this
Agreement there were issued and outstanding 8.2625 shares of Class A voting
stock and 452.485 shares of Class B non-voting common stock. All outstanding
shares of Seller Stock are validly issued, fully paid and nonassessable and not
subject to any preemptive rights and, with respect to shares held by Seller in
its treasury, are free and clear of all liens, claims, encumbrances or
restrictions and there are no agreements or understandings with respect to the
voting or disposition of any such shares.
(b) No bonds, debentures, notes or other indebtedness having the right to
vote on any matters on which stockholders of Seller may vote are issued or
outstanding. Set forth in the Disclosure Letter is a listing of all the seller
debt outstanding including interest rate and payment terms.
(c) As of the date of this Agreement and, except for this Agreement, Seller
does not have or is bound by any Rights obligating Seller to issue, deliver or
sell, or cause to be issued, delivered or sold, any additional shares of capital
stock of Seller or obligating Seller to grant, extend or enter into any such
Right. As of the date hereof, there are no outstanding contractual obligations
of Seller to repurchase, redeem or otherwise acquire any shares of capital stock
of Seller.
Section 3.04 Authority; No Violation.
(a) Seller has full corporate power and authority to execute and deliver
this Agreement, the Plan of Merger and, subject to the receipt of any required
regulatory approvals and the approval of this Agreement by Seller's
stockholders, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Seller and the completion by Seller of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of Seller. This Agreement has been duly and validly executed
and delivered by Seller, and subject to approval by the stockholders of Seller
and receipt of any required approvals or consents, constitutes the valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity, whether applied in a court of law or a court of equity.
(b) Subject to receipt of any required approvals and consents and receipt
of the approval of the stockholders of Seller, the consummation of the
transactions contemplated hereby and compliance by Seller with any of the terms
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or provisions hereof will not: (i) conflict with or result in a breach or
violation of or a default under any provision of the Certificate of
Incorporation or Bylaws of Seller; (ii) violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree, governmental permit or license
or injunction applicable to Seller or any of their respective properties or
assets or enable any person to enjoin the Merger or the other transactions
contemplated hereby; or (iii) violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in a right of termination or
acceleration or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Seller under any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation to
which Seller is a party, or by which they or any of their respective properties
or assets may be bound or affected.
Section 3.05 Consents.
Except for any required vote of the stockholders of Seller and Purchaser,
no consents, waivers or approvals of, or filings, registrations or
authorizations with, any Governmental Entity is necessary, and no consents,
waivers or approvals of, or filings, registrations or authorizations with, any
other third parties are necessary, in connection with (a) the execution and
delivery of this Agreement by Seller, and the completion by Seller of the
Merger. Seller has no reason to believe that (i) any required approvals or other
required consents or approvals will not be received, or that (ii) any public
body or authority, the consent or approval of which is not required or to which
a filing is not required, will object to the completion of the transactions
contemplated by this Agreement. Seller is not subject to regulation of its
business or operations under any Federal law (to the extent Seller is required
to register or file reports with any Government Entity) or state public
utilities laws.
Section 3.06 Absence of Certain Changes or Events.
Since December 31, 2005 (i) Seller has not incurred any liability, except
in the ordinary course of its business consistent with past practice; (ii)
Seller has conducted its business only in the ordinary and usual course of such
business; and (iii) there has not been any condition, event, change or
occurrence that, individually or in the aggregate, has had, or is reasonably
likely to have, a Material Adverse Effect.
Section 3.07 Taxes.
(a) (i) Seller has filed or caused to be filed, and with respect to Tax
Returns due between the date of this Agreement and the date the Effective Time
occurs, will timely file (including any applicable extensions) all Tax Returns
required to be filed, (ii) all such Tax Returns are, or in the case of such Tax
Returns not yet filed, will be, true, complete and correct in all material
respects and such Tax Returns correctly reflected (or in the case of such Tax
Returns not yet filed, will correctly reflect) the facts regarding the income,
business, assets, operations, activities, status and other matters of Seller and
any other information required to be shown thereon, and (iii) all Taxes of
Seller (whether or not reflected on any such Tax Returns) attributable to a
Pre-Effective Time Tax Period have been, or in the case of Taxes the due date
for payment of which is between the date of this Agreement and the date the
Effective Time occurs, timely paid in full, including, without limitation, all
Taxes which Seller is obligated to withhold for amounts paid or owing to
employees, independent contractors, stockholders creditors and other third
parties other than Taxes that have been reserved or accrued and which the Seller
is contesting in good faith.
(b) The most recent financial statements for Seller reflect an adequate
reserve for all Taxes payable by Seller for all taxable periods and portions
thereof through the date of such financial statements, and, in the case of Taxes
9
owed as of the date hereof, an adequate reserve is (and until the date the
Effective Time occurs will continue to be) reflected in the accruals for Taxes
payable, other than accruals established to reflect timing differences and
accruals reflected only in the notes thereto.
(c) There are no liens for Taxes, except for statutory liens not yet due
with respect to any of the assets or properties of Seller.
(d) (i) No Tax Return of Seller has within the past ten (10) years been
examined by the Internal Revenue Service or state taxing authority, (ii) no Tax
Return of Seller is under audit or examination by any other Taxing Authority,
and (iii) no notice of such an audit or examination has been received by Seller.
(e) Each deficiency, if any, resulting from any audit or examination
relating to Taxes by any Taxing Authority has been timely paid. No issues
relating to Taxes were raised by the relevant Taxing Authority in any completed
audit or examination that can reasonably be expected to recur in a later taxable
period. The relevant statute of limitations is closed with respect to the Tax
Returns of Seller for all years through 2001. Seller has made available to
Purchaser documents setting forth the dates of the most recent audits or
examinations of the Seller by any Taxing Authority in respect of Taxes for all
taxable periods for which the statute of limitations has not yet expired.
(f) Seller is not a party to or is bound by any Tax sharing agreement, Tax
indemnity obligation or similar agreement, arrangement or practice with respect
to Taxes (including, without limitation, any advance pricing agreement, closing
agreement or other agreement relating to Taxes with any Taxing Authority).
(g) Seller will not be required to include in a taxable period ending after
the date of the Effective Time any taxable income attributable to income that
accrued, but was not recognized, in a Pre-Effective Time Tax Period (or the
portion of a Straddle Period allocable to the Pre-Effective Time Tax Period) as
a result of an adjustment under Section 481 of the Code, the installment method
of accounting, the long-term contract method of accounting, the cash method of
accounting, any comparable provision of state, local, or foreign Tax law, or for
any other reason.
(h) There are no outstanding agreements or waivers extending, or having the
effect of extending, the statutory period of limitation applicable to any Tax
Returns required to be filed with respect to Seller, and Seller has not
requested any extension of time within which to file any Tax Return, which
return has not yet been filed. No power of attorney with respect to any Taxes
has been executed or filed with any Taxing Authority by or on behalf of Seller.
(i) Seller has complied in all respects with all applicable laws relating
to the payment and withholding of Taxes (including withholding of Taxes pursuant
to Sections 1441, 1442, 3121 and 3402 of the Code or any comparable provision of
any state, local or foreign laws) and have, within the time and in the manner
prescribed by applicable law, withheld from and paid over to the proper Taxing
Authorities all amounts required to be so withheld and paid over under such
laws.
(j) Seller has not been a party to any distribution occurring during the
last five years in which the parties to such distribution treated the
distribution as one to which Section 355 of the Code applied.
(k) Seller is not a party to any "listed transaction" as defined in
Treasury Regulation Section 1.6011-4(b)(2).
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(l) The Tax Returns filed by Seller do not contain a disclosure statement
under former Section 6661 of the Code or Section 6662 of the Code (or any
similar provision of state, local or foreign Tax law).
(m) Seller has not been, at any time during the applicable time period set
forth in Section 897(c)(1) of the Code, a United States real property holding
company within the meaning of Section 897(c)(2) of the Code.
(n) Seller has made available to Purchaser for inspection (i) complete and
correct copies of all material Tax Returns of Seller relating to Taxes for all
taxable periods for which the applicable statute of limitations has not yet
expired, and (ii) complete and correct copies of all private letter rulings,
revenue agent reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, pending ruling requests, and any similar documents,
submitted by, received by or agreed to by or on behalf of Seller or, to the
extent related to the income, business, assets, operations, activities or status
of Seller and relating to Taxes for all taxable periods for which the statute of
limitations has not yet expired.
(o) The Disclosure Letter sets forth each state, county, local, municipal
or foreign jurisdiction in which Seller files, or is or has been required to
file, a Tax Return relating to state and local income, franchise, license,
excise, net worth, property or sales and use taxes or is or has been liable for
any Taxes on a "nexus" basis at any time for a taxable period for which the
relevant statutes of limitation have not expired. Seller has not received notice
of any claim by a Taxing Authority in a jurisdiction where Seller does not file
Tax Returns that Seller is or may be subject to taxation by such jurisdiction.
(p) Seller has made a valid election under Section 1362 of the Code to be
treated as an S corporation for federal income tax purposes, and made a similar
election under comparable provisions of state, local or foreign Tax law. At all
times since making its election to be treated as an S Corporation Seller has
been treated as an S Corporation or a QSub (as defined below) for income tax
purposes. Seller is in compliance with requirements for maintaining its election
as an S Corporation.
(q) Each stockholder of Seller has been, as of the date they acquired
Seller Stock, and continue to be "eligible shareholders" as defined under
Section 1361 of the Code.
(r) Each controlled corporation that had or has any of its stock owned by
Seller was, is, and will be properly treated as a qualified S Corporation
Subsidiary (QSubs), as defined under Section 1361 of the Code, of Seller. All
QSub elections required to be made to satisfy the condition expressed in the
previous sentence were properly made on a timely basis.
(s) Seller has no liability or potential liability for any tax under Code
Section 1374. Seller has not in the past 10 years, (A) acquired assets from
another corporation in a transaction in which Seller's tax basis for the
acquired assets was determined, in whole or in part, by reference to the tax
basis of the acquired assets (or any other property) in the hands of the
transferor or (B) acquired the controlling stock of any corporation that is not
a qualified Corporation Subsidiary.
Section 3.08 Material Contracts; Leases; Defaults.
(a) Except as set forth in the Disclosure Letter, Seller is not a party to
or subject to: (i) any employment, consulting or severance contract with any
past or present officer, director or employee of Seller, except for "at will"
arrangements; (ii) any plan or contract providing for bonuses, pensions,
options, or other equity deferred compensation, retirement payments, profit
sharing, insurance benefits, death benefits, health, medical or disability
benefits or similar material arrangements for or with any past or present
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officers, directors or employees of Seller; (iii) any collective bargaining
agreement with any labor union relating to employees of Seller; (iv) any
agreement which by its terms limits the payment of Dividends by Seller; (v) any
instrument evidencing or related to indebtedness for borrowed money whether
directly or indirectly, by way of purchase money obligation, conditional sale,
lease purchase, guaranty or otherwise; (vi) any other agreement, written or
oral, not terminable on 60 days' notice, that obligates Seller for the payment
of more than $100,000 annually; or (vii) any agreement (other than this
Agreement), contract, arrangement, commitment or understanding (whether written
or oral) that restricts or limits in any material way the conduct of business by
Seller (it being understood that any non-compete or similar provision shall be
deemed material).
(b) Subject to any consents that may be required as a result of the
transactions contemplated by this Agreement, Seller is not in default under any
material contract, agreement, commitment, arrangement, lease, insurance policy
or other instrument to which it is a party, by which its assets, business, or
operations may be bound or affected, or under which it or its assets, business,
or operations receive benefits, and there has not occurred any event that, with
the lapse of time or the giving of notice or both, would constitute such a
default.
(c) True and correct copies of agreements, contracts, leases, arrangements
and instruments referred to in Sections 3.08(a) and (b) have been made available
to Purchaser on or before the date hereof, are listed on the Disclosure Letter
and are in full force and effect on the date hereof and enforceable against the
counterparty to which it relates.
(d) The Disclosure Letter provides a complete and accurate description of
all debt and guaranties of debt of Seller outstanding as of the date of this
Agreement.
Section 3.09 Ownership of Property; Insurance Coverage.
(a) Except as set forth in the Disclosure Letter, Seller has good and, as
to real property, marketable title to all assets and properties owned by Seller
in the conduct of its businesses, whether such assets and properties are real or
personal, tangible or intangible, including assets and property reflected in the
balance sheet contained in the most recent Seller financial statements or
acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of in the ordinary course of business, since the
date of such balance sheet and except to the extent that the failure to have
good title to any personal property would not reasonably be expected to have a
Material Adverse Effect), subject to no encumbrances, liens, mortgages, security
interests or pledges. All existing leases and commitments to lease constitute or
will constitute operating leases for both tax and financial accounting purposes
and the lease expense and minimum rental commitments with respect to such leases
and lease commitments are as disclosed in all respects in the notes to the
Seller financial statements. Each real estate lease that will require the
consent of the lessor or its agent to consummate the effects intended by the
Merger or otherwise as a result of the Merger by virtue of the terms of any such
lease is listed in the Disclosure Letter identifying the section of the lease
that contains such prohibition or restriction.
(b) With respect to all agreements pursuant to which Seller has purchased
securities subject to an agreement to resell, if any, Seller, as the case may
be, has a lien or security interest (which to Seller's Knowledge is a valid,
perfected first lien) in the securities or other collateral securing the
repurchase agreement, and the value of such collateral equals or exceeds the
amount of the debt secured thereby.
(c) Seller currently maintains insurance for reasonable amounts with
financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. Seller has not received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with respect to
12
such policies of insurance will be substantially increased. There are presently
no material claims pending under such policies of insurance and no notices have
been given by Seller under such policies. All such insurance is valid and
enforceable and in full force and effect. The Seller Disclosure Letter
identifies all policies of insurance maintained by Seller as well as the other
matters required to be disclosed under this Section.
Section 3.10 Intellectual Property.
(a) The Disclosure Letter sets forth a true and complete list of all (i)
registered and/or material Intellectual Property owned by Seller indicating for
each registered item the registration or application number and the applicable
filing jurisdiction (collectively, the "Listed Intellectual Property"). Seller
exclusively owns (beneficially, and of record where applicable) all Listed
Intellectual Property, free and clear of all encumbrances, exclusive licenses
and non-exclusive licenses not granted in the ordinary course of business. The
Listed Intellectual Property is valid, subsisting and enforceable, and is not
subject to any outstanding order, judgment, decree or agreement adversely
affecting the Seller's use thereof or its rights thereto. Seller has sufficient
rights to use all Intellectual Property used in its business as currently
conducted. To Seller's Knowledge, Seller does not and has not in the past five
years infringed or otherwise violated the Intellectual Property rights of any
third party. There is no material litigation, opposition, cancellation,
proceeding, objection or claim pending, asserted or threatened against the
Seller concerning the ownership, validity, registerability, enforceability,
infringement or use of, or licensed right to use, any Intellectual Property. To
the Seller's Knowledge, (x) no valid basis for any such litigation, opposition,
cancellation, proceeding, objection or claim exists, (y) no Person is violating
any Listed Intellectual Property or other Intellectual Property right owned or
held exclusively by Seller, and (z) the Licensed Intellectual Property is valid,
subsisting and enforceable and is not subject to any outstanding order,
judgment, decree or agreement adversely affecting the Seller's use thereof or
its rights thereto. Consummation of the transactions contemplated by this
Agreement will not terminate or alter the terms pursuant to which the Seller is
permitted to use any Licensed Intellectual Property and will not create any
rights by third parties to use any Intellectual Property owned by the Purchaser
(other than any termination, alteration or creation of any rights that results
from action of the Purchaser and its Affiliates).
(b) The Seller has taken commercially reasonable measures to protect the
confidentiality of all Trade Secrets that are owned, used or held by Seller, and
to the Seller's Knowledge, such Trade Secrets have not been used, disclosed to
or discovered by any Person except pursuant to valid and appropriate
non-disclosure and/or license agreements which have not been breached. Seller
has exercised commercially reasonable efforts to ensure that Seller's current
and prior employees who have access to confidential information have executed
valid intellectual property and confidentiality agreements or are obligated,
pursuant to Seller policies, to maintain the confidentiality of such information
for the benefit of Seller on terms and conditions consistent with industry
standards. All Intellectual Property developed under contract to Seller has been
assigned to Seller.
(c) To Seller's Knowledge, the IT Assets operate and perform in all
respects in accordance with their documentation and functional specifications
and otherwise as required by Seller in connection with its business, and have
not malfunctioned or failed within the past three years. To Seller's Knowledge,
the IT Assets do not contain any "time bombs," "Trojan horses," "back doors,"
"trap doors," "worms," viruses, bugs, faults or other devices or effects that
(i) enable or assist any person to access without authorization the IT Assets,
or (ii) otherwise significantly adversely affect the functionality of the IT
Assets, in either case except as disclosed in its documentation. To Seller's
Knowledge, no person has gained unauthorized access to the IT Assets. Seller has
implemented commercially reasonable backup and disaster recovery technology
consistent with industry practices.
(d) To Seller's Knowledge, none of the software owned by it contains any
shareware, open source code, or other software whose use requires disclosure or
licensing of Intellectual Property.
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Section 3.11 Labor Matters.
Other than as set forth in the Disclosure Letter, Seller is not, and has
not ever been, a party to, or is or has ever been bound by, any collective
bargaining agreement, contract, or other agreement or understanding with a labor
union or labor organization with respect to its employees and no such agreement
or contract is currently being negotiated by Seller, nor is Seller the subject
of any proceeding asserting that it has committed an unfair labor practice or
otherwise relating to labor matters involving any current or former employees of
Seller or seeking to compel it to bargain with any labor organization as to
wages and conditions of employment, nor is any strike, other labor dispute or
organizational effort involving Seller pending or, to the Knowledge of Seller,
threatened. Seller is in compliance with applicable laws regarding employment of
employees and retention of independent contractors, and are in compliance with
applicable employment tax laws.
Section 3.12 Legal Proceedings.
Seller is not a party to any, and there are no pending or, to Seller's
Knowledge, threatened legal, administrative, arbitration or other proceedings,
claims (whether asserted or unasserted), actions or governmental investigations
or inquiries of any nature, (i) against Seller, (ii) to which Seller's assets
are or may be subject, (iii) challenging the validity or propriety of any of the
transactions contemplated by this Agreement, or (iv) which could adversely
affect the ability of Seller to perform under this Agreement.
Section 3.13 Compliance With Applicable Law/Permits.
(a) Seller is in compliance in all material respects with all applicable
federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable to it, its properties, assets and
deposits, its business, and its conduct of business and its relationship with
its employees.
(b) Seller has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations that are required
in order to permit it to own or lease its properties and to conduct its business
as presently conducted; all such permits, licenses, consents, certificates of
authority, orders and approvals are in full force and effect and, to the
Knowledge of Seller, no suspension or cancellation of any such permit, license,
certificate, consents, order or approval is threatened or will result from the
consummation of the transactions contemplated by this Agreement.
Section 3.14 Employee Benefit Plans.
(a) The Disclosure Letter includes a descriptive list of all plans,
programs, policies, payroll practices, contracts, agreements and other
arrangements providing for bonus, incentive compensation, deferred compensation,
pension, retirement benefits or payments, profit-sharing, employee stock
ownership, stock bonus, stock purchase, restricted stock, stock option, stock
appreciation, phantom stock, and other stock and stock related awards,
severance, welfare benefits, fringe benefits, employment, severance and change
in control benefits or payments and all other types of compensation and types of
compensation and compensation and benefit practices, policies and arrangements,
in each case, sponsored or contributed to, required to be contributed to or
maintained by Seller in which any employee or former employee, consultant or
former consultant or director or former director of Seller participates or to
which any such employee, consultant or director is a party or is otherwise
entitled to receive benefits (the "Compensation and Benefit Plans"). Other than
as set forth in the Disclosure Letter, Seller has no commitment to create any
additional Compensation and Benefit Plan or to modify, change or renew any
existing Compensation and Benefit Plan (any modification or change that
by law or regulation to maintain the qualified status thereof. Seller has made
available to Purchaser true and correct copies of the Compensation and Benefit
14
increases the cost of such plans would be deemed material), except as required
Plans and amendments thereto. The Disclosure Letter identifies all payments made
by Seller to labor unions in connection with the hiring or contracting of union
employees during the past 12 months.
(b) Each Compensation and Benefit Plan has been operated and administered
in all material respects in accordance with its terms and with applicable law,
including, but not limited to, ERISA, the Code, the Age Discrimination in
Employment Act, COBRA, HIPAA and any regulations or rules promulgated
thereunder, and all filings, disclosures and notices required by ERISA, the
Code, the Exchange Act, the Age Discrimination in Employment Act and any other
applicable law have been timely made or any interest, fines, penalties or other
impositions for late filings have been paid in full. Each Compensation and
Benefit Plan which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA and which is intended to be qualified under Section 401(a)
of the Code is, and since its inception has been, so qualified, and has received
a favorable determination letter from the IRS, and Seller is not aware of any
circumstances which are reasonably likely to result in revocation of any such
favorable determination letter. There is no pending or, to the Knowledge of
Seller threatened, action, suit or claim relating to any of the Compensation and
Benefit Plans (other than routine claims for benefits). Neither Seller has not
engaged in a transaction, or omitted to take any action, with respect to any
Compensation and Benefit Plan that would reasonably be expected to subject
Seller to an unpaid tax or penalty imposed by either Section 4975 of the Code or
Section 502 of ERISA.
(c) Seller does not sponsor or contribute on behalf of its employees to any
tax-qualified defined benefit pension plans within the meaning of ERISA Section
3(2) subject to the minimum funding standards of Section 412 of the Internal
Revenue Code. Similarly, Seller does not sponsor or contribute to any
nonqualified plans or deferred compensation subject to Section 409A of the
Internal Revenue Code that would be considered defined benefit pension plans.
(d) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan or any employee benefit
arrangements to which Seller is a party or a sponsor have been timely made, and
all anticipated contributions and funding obligations are accrued on Seller's
financial statements to the extent required by GAAP. Seller has expensed and
accrued as a liability the present value of future benefits under each
applicable Compensation and Benefit Plan for financial reporting purposes as
required by GAAP.
(e) Except as set forth in the Disclosure Letter, Seller has no obligations
to provide retiree health, life insurance, disability insurance, or death
benefits under any Compensation and Benefit Plan, other than benefits mandated
by Section 4980B of the Code and there has been no communication to employees by
Seller that would reasonably be expected to promise or guarantee such benefits.
(f) With respect to each Compensation and Benefit Plan, if applicable,
Seller has provided or made available to Purchaser copies of the: (A) trust
instruments and insurance contracts; (B) two most recent Forms 5500 filed with
the IRS; (C) two most recent actuarial reports and financial statements; (D)
most recent summary plan description; (E) most recent determination letter
issued by the IRS; and (F) any Form 5310 or Form 5330 filed with the IRS within
the last two years.
(g) The consummation of the Merger will not, directly or indirectly
(including, without limitation, as a result of any termination of employment or
service at any time prior to or following the Effective Time): (A) entitle any
current or former employee, consultant, independent contractor or director to
any payment or benefit (including severance pay, change in control benefit, or
similar compensation) or any increase in compensation, (B) result in the vesting
or acceleration of any benefits under any Compensation and Benefit Plan, (C)
result in any material increase in benefits payable under or the obligation to
fund benefits under any Compensation and Benefit Plan or (D) result in the
triggering or imposition of any restrictions or limitations on the rights of
Seller or the Purchaser to amend or terminate any Compensation and Benefit Plan.
The consummation of the Merger will not, directly or indirectly (including
without limitation, as a result of any termination of employment or service at
15
any time prior to or following the Effective Time), entitle any current or
former employee, director, consultant or independent contractor of Seller to any
actual or deemed payment (or benefit) which could constitute an "excess
parachute payment" (as such term is defined in Section 280G of the Code).
(h) Seller does not maintain any compensation plans, programs or
arrangements under which (i) payment is reasonably likely to become
non-deductible, in whole or in part, for tax reporting purposes as a result of
the limitations under Section 162(m) of the Code and the regulations issued
thereunder, or (ii) any payment is reasonably likely to become subject to an
excise tax under section 409A or 4999 of the Code.
(i) There are no stock option, stock appreciation or similar rights, earned
dividends or dividend equivalents, or shares of restricted stock, outstanding
under any of the Compensation and Benefit Plans or otherwise as of the date
hereof and none will be granted, awarded, or credited after the date hereof.
(j) Each Compensation and Benefit Plan can be amended, terminated or
otherwise discontinued without liability to the Seller, Purchaser or any ERISA
Affiliate.
Section 3.15 Brokers, Finders and Financial Advisors.
Neither Seller nor any of its respective officers, directors, employees or
agents, has employed any broker, finder or financial advisor in connection with
the transactions contemplated by this Agreement, or incurred any liability or
commitment for any fees or commissions to any such person in connection with the
transactions contemplated by this Agreement.
Section 3.16 Environmental Matters.
(a) Except as may be set forth in any Phase I Environmental Report
identified in the Disclosure Letter (a true copy of which has been provided to
Purchaser), with respect to Seller:
(i) Seller's Property is, and has been, in compliance in all material
respects with, and is not liable under, any Environmental Laws;
(ii) Seller has received no written notice and does not otherwise have
Knowledge that there is any suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending and,
to Seller's Knowledge, no such action is threatened, before any court,
governmental agency or other forum against it or any Property (x) for
alleged noncompliance (including by any predecessor) with, or liability
under, any Environmental Law or (y) relating to the presence of or release
into the environment of any Materials of Environmental Concern (as defined
herein), whether or not occurring at or on a site owned, leased or operated
by it or any Property;
(iii) Seller has received no written notice that there is any suit,
claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending and, to Seller's Knowledge no such
action is threatened, before any court, governmental agency or other forum
(x) relating to alleged noncompliance (including by any predecessor) with,
or liability under, any Environmental Law or (y) relating to the presence
of or release into the environment of any Materials of Environmental
Concern, whether or not occurring at or on a site owned, leased or operated
by a Property;
16
(iv) The properties currently owned or operated by Seller and, to the
Seller's Knowledge, the Properties (including, without limitation, soil,
groundwater or surface water on, or under the properties, and buildings
thereon) are not contaminated with and do not otherwise contain any
Materials of Environmental Concern;
(v) There is no suit from any federal, state, local or foreign
governmental entity or any third party indicating that it may be in
violation of, or liable under, any Environmental Law;
(vi) There are no underground storage tanks on, in or under any
properties owned or operated by Seller, and, to Seller's Knowledge, no
underground storage tanks have been closed or removed from any properties
owned or operated by Seller; and
(vii) During the period of (s) Seller's ownership or operation of any
of their respective current properties or (t) Seller's participation in the
management of any property, there has been no contamination by or release
of Materials of Environmental Concern in, on, under or affecting such
properties that could reasonably be expected to result in material
liability under the Environmental Laws. To Seller's Knowledge, prior to the
period of (x) Seller's ownership or operation of any of their respective
current properties or (y) Seller's participation in the management of any
property, there was no contamination by or release of Materials of
Environmental Concern in, on, under or affecting such properties that could
reasonably be expected to result in material liability under the
Environmental Laws.
(viii) To Seller's knowledge, there is no reasonable basis for any
suit, claim, action, demand, executive or administrative order, directive
or proceeding of a type described in Section 3.16(a)(ii) or (iii).
Section 3.17 Related Party Transactions.
Other than as previously disclosed, Seller is not a party to any
transaction (including any loan or other credit accommodation) with any
affiliate of Seller. Seller acknowledges that it may be deemed an affiliate (as
defined under the general Rules and Regulations promulgated under the Securities
Act of 1933) of Purchaser by virtue of having common shareholders, board members
and management.
Section 3.18 Antitakeover Provisions Inapplicable.
The transactions contemplated by this Agreement are not subject to the
requirements of any "moratorium," "control share," "fair price," "affiliate
transactions," "business combination" or other antitakeover laws and regulations
of any state, including the provisions of West Virginia Corporate Law applicable
to Seller.
Section 3.19 Customers and Suppliers.
The Disclosure Letter contains a complete list of all customers who
individually accounted for more than 2% of the Seller's gross revenues during
the fiscal years ended December 31, 2005 and 2006 or the nine-month period ended
September 30, 2007. No customer listed on the Disclosure Letter has, within the
past 12 months, cancelled or otherwise terminated, or, to the Knowledge of the
Seller, made any threat to cancel or terminate, its relationship with the
Seller, or decreased materially its usage of the Seller's services or products.
Except as set forth in the Disclosure Letter, no material supplier of the Seller
has cancelled or otherwise terminated any contract with the Seller prior to the
expiration of the contract term, or, to the Knowledge of the Seller, made any
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threat to the Seller to cancel, reduce the supply or otherwise terminate its
relationship with the Seller. The Seller has not (i) breached (so as to provide
a benefit to the Seller that was not intended by the parties) any agreement with
or (ii) engaged in any fraudulent conduct with respect to, any customer or
supplier of the Seller.
Section 3.20 Inventory.
All inventory of the Seller consists of a quality and quantity usable and
saleable in the ordinary course of business, except for obsolete items and items
of below-standard quality, all of which have been written-off or written-down to
net realizable value pursuant to the Seller's policies and the best estimates of
the Seller's management in accordance with GAAP. All inventories not written-off
have been priced at the lower of cost or market on a first-in, first-out basis.
The value of each type of inventory, whether raw materials, work-in process or
finished goods, are not excessive in the present circumstances of the Seller in
the best estimate of Seller's management in accordance with GAAP.
Section 3.21 Accounts Receivable; Bank Accounts.
All accounts receivable of the Seller are valid receivables properly
reflected pursuant to the Seller's policies and practices and the best estimates
of the Seller's management in accordance with GAAP, and are subject to no
setoffs or counterclaims and are current and collectible (within 90 days after
the date on which they first became due and payable). Except as set forth in the
Disclosure Letter, all accounts receivable reflected in the financial or
accounting records of the Seller that have arisen since December 31, 2006 are
valid receivables subject to no setoffs or counterclaims and are current and
collectible (within 90 days after the date on which they first became due and
payable). The Disclosure Letter describes each account maintained by or for the
benefit of the Seller at any bank or other financial institution.
Section 3.22 Offers.
The Seller has suspended or terminated, and has the legal right to
terminate or suspend, all negotiations and discussions of any acquisition,
merger, consolidation or sale of all or substantially all of the assets or
member interests of the Seller with partiers other than Purchaser.
Section 3.23 Warranties.
No product or service manufactured, sold, leased, licensed or delivered by
the Seller is subject to any guaranty, warranty, right of return, right of
credit or other indemnity other than (i) the applicable standard terms and
conditions of sale or lease of the Seller, which are set forth in the Disclosure
v and (ii) manufacturers' warranties for which the Seller has no liability. The
Disclosure Letter sets forth the aggregate expenses incurred by the Seller in
fulfilling its obligations under its guaranty, warranty, right of return and
indemnity provisions during the past twenty-four (24) months and the Seller does
not know of any reason why such expenses would reasonably be expected to
increase as a percentage of sales in the future.
Section 3.24 Proxy Statement.
The information to be supplied by the Seller for inclusion in Purchaser's
proxy statement (such proxy statement, as amended or supplemented is referred to
herein as the "Proxy Statement") shall not at the time the Proxy Statement is
filed with the SEC, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. The information to be supplied by
the Seller for inclusion in the proxy statement to be delivered to Purchaser's
stockholders in connection with the meeting of Purchaser's stockholders to
consider the approval of this Agreement (the "Purchaser Stockholders' Meeting")
shall not, on the date the Proxy Statement is first mailed to Purchaser's
stockholders, and at the time of the Purchaser Stockholders' Meeting, contain
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any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not false or
misleading; or omit to state any material fact necessary to correct any
statement provided by the Seller in any earlier communication with respect to
the solicitation of proxies for the Purchaser Stockholders' Meeting which has
become false or misleading. If at any time prior to the Purchaser Stockholders'
Meeting, any event relating to the Seller or any of its affiliates, officers or
managers should be discovered by the Seller which should be set forth in a
supplement to the Proxy Statement, the Seller shall promptly inform Purchaser of
such event.
Section 3.25 No Misstatements.
No representation or warranty made by the Seller in this Agreement, the
Disclosure Letter or any certificate delivered or deliverable pursuant to the
terms hereof contains or will contain any untrue statement of a material fact,
or omits, or will omit, when taken as a whole, to state a material fact,
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; provided, however, that any
representations and warranties made by the Seller herein that are qualified by
the Seller's "Knowledge" or materiality shall be incorporated into the
representation and warranty made by this sentence of this Section 3.25. To the
Knowledge of the Seller, the Seller has disclosed to Purchaser all material
information relating to the business of the Seller or the transactions
contemplated by this Agreement.
Section 3.26 Investment Intent.
Seller acknowledges that the shares of Purchaser Common Stock to be
delivered by Purchaser under this Agreement are not registered under the
Securities Act or registered or qualified for sale under any state securities
law and cannot be resold without registration under, or pursuant to an exemption
from, the Securities Act. Seller and its shareholders are acquiring the shares
of Purchaser Common Stock for their own account for investment and not with a
view toward the sale or distribution of the shares of Purchaser Common Stock.
Seller and to Seller's knowledge each of its shareholders have sufficient
knowledge and experience in financial and business matters to enable it to
evalue the risks of acquiring the shares of Purchaser Common Stock and to
Seller's knowledge each of its shareholders has the ability to bear the risks of
such investment.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that the statements contained
in this Article IV are true and correct as of the date of this Agreement and
will be true and correct as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Article IV).
Section 4.01 Organization.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Purchaser has all requisite
corporate power and authority to own, lease and operate its properties and carry
on its business as now conducted and is duly licensed or qualified to do
business in the states of the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its business requires such
qualification.
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Section 4.02 Authority; No Violation.
(a) Purchaser has full corporate power and authority to execute and deliver
this Agreement and, subject to (i) receipt of any required regulatory and
stockholder approvals and (ii) stockholders of Purchaser owning less than 20% of
the Purchaser securities sold in the Purchaser's initial public offering voting
against the Merger and exercising their conversion rights as set forth in the
Purchaser's Certificate of Incorporation, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Purchaser
and the completion by Purchaser of the transactions contemplated hereby, have
been duly and validly approved by the Board of Directors of Purchaser, and no
other corporate proceedings on the part of Purchaser are necessary to complete
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser, and subject to the receipt of the
regulatory approvals, constitutes the valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of equity.
(b) The execution and delivery of this Agreement by Purchaser, subject to
receipt of any required regulatory approvals, and compliance by Seller and
Purchaser with any conditions contained therein and stockholder approvals, the
consummation of the transactions contemplated hereby and compliance by Purchaser
with any of the terms or provisions hereof will not (i) conflict with or result
in a breach or violation of, or default under and provision of the certificate
of incorporation or bylaws of Purchaser or (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree, governmental permit
or license or injunction applicable to Purchaser.
Section 4.03 Consents.
Except for any regulatory approvals and compliance with any conditions
contained therein, the filing of the Proxy Statement with the SEC contemplated
by Section 7.02 hereof, the approval of this Agreement by the requisite vote of
the stockholders and the satisfaction of Purchaser's obligations as a special
purpose acquisition corporation, no consents, waivers or approvals of, or
filings or registrations with, any Governmental Entity are necessary, and, to
the Knowledge of Purchaser, no consents, waivers or approvals of, or filings or
registrations with, any other third parties are necessary, in connection with
the execution and delivery of this Agreement by Purchaser and the completion by
Purchaser of the Merger. Purchaser has no reason to believe that (i) any
required consents or approvals will not be received, or that (ii) any public
body or authority, the consent or approval of which is not required or to which
a filing is not required, will object to the completion of the transactions
contemplated by this Agreement.
Section 4.04 Access to Funds/Merger Consideration.
Purchaser has, or on the Closing Date will have, access to all funds, and
shall authorize the issuance of shares, necessary to consummate the Merger and
pay the aggregate Merger Consideration.
Section 4.05 Legal Proceedings.
Purchaser is not a party to any action, suit or proceeding that would
materially adversely affect the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
Section 4.06 Operations of Merger Sub.
Merger Sub will be formed by Purchaser solely for the purpose of engaging
in the transactions contemplated by this Agreement, has engaged in no other
business activities and has conducted its operations only as contemplated by
this Agreement. Merger Sub has no liabilities and, except for a subscription
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agreement pursuant to which all of its authorized capital stock was issued to
Purchaser, is not a party to any agreement other than this Agreement and
necessary to effect the intent of this Agreement.
Section 4.07 Board Approval.
Subject to certain conditions contained in Section 8.01 and 8.02,
including, but not limited to receiving a third party fairness opinion (the
"Opinion"), the Board of Directors of Purchaser (including any required
committee or subgroup of the Board of Directors of Purchaser) has, as of the
date of this Agreement, unanimously (i) declared the advisability of the Merger
and approved this Agreement and the transactions contemplated hereby, (ii)
determined that the Merger is in the best interests of the stockholders of
Purchaser and (iii) taken all actions necessary to effect the intent of this
Agreement.
Section 4.08 Proxy Statement.
The information to be supplied by Purchaser for inclusion in the Proxy
Statement shall not at the time the Proxy Statement is filed with SEC contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. The information to be supplied by Purchaser for
inclusion in the Proxy Statement to be delivered to Purchaser's stockholders in
connection with the Purchaser Stockholders' Meeting shall not, on the date the
Proxy Statement is first mailed to Purchaser's stockholders, and at the time of
Purchaser Stockholders' Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not false or misleading; or omit to state any material fact
necessary to correct any statement provided by Purchaser in any earlier
communication with respect to the solicitation of proxies for the Purchaser
Stockholders' Meeting which has become false or misleading. If at any time prior
to the Stockholder's Meeting, any event relating to Purchaser or any of its
affiliates, officers or managers should be discovered by Purchaser which should
be set forth in a supplement to the Proxy Statements, Purchaser shall promptly
inform Seller of such event.
Section 4.09 Offers.
The Seller acknowledges that Purchaser is permitted to receive general
inquiries from third parties concerning potential transactions that would be in
addition to, the transaction contemplated by this Agreement (an "Additional
Transaction"), and to enter into an acquisition or stock purchase agreement with
respect to one or more Additional Transactions.
Section 4.10 Related Party
Purchaser acknowledges that it may be deemed an affiliate (as defined under
the general Rules and Regulations promulgated under the Securities Act of 1933)
of Seller by virtue of having common shareholders, board members and management.
ARTICLE V.
CONDUCT PENDING ACQUISITION
Section 5.01 Conduct of Business Prior to the Effective Time.
Except as expressly provided in this Agreement or with the prior written
consent of Purchaser, during the period from the date of this Agreement to the
Effective Time, Seller shall: (i) conduct its business in the ordinary and usual
course consistent with past practices; (ii) maintain and preserve intact its
business organization, properties, leases and advantageous business
relationships and retain the services of its officers and key employees; (iii)
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take no action which would adversely affect or delay the ability of each of
Seller to perform its covenants and agreements on a timely basis under this
Agreement; (iv) take no action which would adversely affect or delay the ability
of parties to obtain any necessary approvals, consents or waivers required for
the transactions contemplated hereby or which would reasonably be expected to
result in any such approvals, consents or waivers containing any material
condition or restriction; and (v) take no action that results in or is
reasonably likely to have a Material Adverse Effect on Seller.
Section 5.02 Forbearances of Seller.
Without limiting the covenants set forth in Section 5.01 hereof, from the
date hereof until the Effective Time, except as expressly contemplated or
permitted by this Agreement, without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld, Seller will not:
(a) change or waive any provision of its certificate of incorporation,
charter or bylaws or any similar governing documents;
(b) change the number of authorized or issued shares of its capital stock,
issue any shares of Seller Common Stock that are held as Treasury Stock as of
the date of this Agreement, or issue or grant any right or agreement of any
character relating to its authorized or issued capital stock or any securities
convertible into shares of such stock, or split, combine or reclassify any
shares of its capital stock, or declare, set aside or pay any dividend or other
distribution in respect of its capital stock, or purchase or redeem or otherwise
acquire any shares of its capital stock, except that Seller may pay a preclosing
dividend of certain Seller assets as set forth at Disclosure Letter 5.02;
(c) enter into, amend in any material respect or terminate any contract or
agreement (including without limitation any settlement agreement with respect to
litigation) involving a payment by Seller of $100,000 or more;
(d) enter into any new line of business or introduce any new products;
(e) grant or agree to pay any bonus (other than bonuses in the ordinary
course of business, consistent with past practice), severance or termination
payment (including, but not limited to discretionary severance pay) to, or enter
into, renew or amend any employment agreement, severance agreement and/or
supplemental executive agreement with, or increase in any manner the
compensation or fringe benefits of, any of its directors, officers or employees;
(f) enter into or, except as may be required by law, materially modify any
pension, retirement, stock option, stock purchase, stock appreciation right,
stock grant, profit sharing, deferred compensation, supplemental retirement,
consulting, bonus, group insurance or other employee benefit, incentive or
welfare contract, plan or arrangement, or any trust agreement related thereto,
in respect of any of its directors, officers or employees; or make any
contributions to any defined contribution or defined benefit plan not in the
ordinary course of business consistent with past practice;
(g) merge or consolidate Seller with any other corporation; sell or lease
all or any substantial portion of the assets or business of Seller; make any
acquisition of all or any substantial portion of the business or assets of any
other;
(h) sell or otherwise dispose of the capital stock of Seller or sell or
otherwise dispose of any asset of Seller other than in the ordinary course of
business consistent with past practice;
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(i) incur any indebtedness for borrowed money (or guarantee any
indebtedness for borrowed money) or subject any asset of Seller to any lien,
pledge, security interest or other encumbrance;
(j) take any action which would result in any of the representations and
warranties of Seller set forth in this Agreement becoming untrue as of any date
after the date hereof or in any of the conditions set forth in Article VIII
hereof not being satisfied, except in each case as may be required by applicable
law;
(k) waive, release, grant or transfer any material rights of value or
modify or change in any material respect any existing agreement or indebtedness
to which Seller is a party, other than in the ordinary course of business,
consistent with past practice;
(l) except as previously disclosed, enter into, renew, extend or modify any
other transaction with any Affiliate;
(m) except for the execution of this Agreement, and actions taken or which
will be taken in accordance with this Agreement and performance thereunder, take
any action that would give rise to a right of payment to any individual under
any employment agreement;
(n) make any capital expenditures in excess of $100,000 individually or
$250,000 in the aggregate, other than pursuant to binding commitments existing
on the date hereof which are set forth in the Disclosure Letter and other than
expenditures necessary to maintain existing assets in good repair;
(o) purchase or otherwise acquire, or sell or otherwise dispose of, any
assets or incur any liabilities other than in the ordinary course of business
consistent with past practices and policies;
(p) undertake or, enter into any lease, contract or other commitment for
its account, involving a payment by Seller of more than $25,000 annually, or
containing any financial commitment extending beyond 12 months from the date
hereof;
(q) pay, discharge, settle or compromise any claim, action, litigation,
arbitration or proceeding; other than any such payment, discharge, settlement or
compromise in the ordinary course of business consistent with past practice that
involves solely money damages in the amount not in excess of $50,000
individually or $100,000 in the aggregate;
(r) other than in the ordinary course of business consistent with past
practice and pursuant to policies currently in effect, sell, transfer, mortgage,
encumber or otherwise dispose of any of its material properties, leases or
assets to any individual, corporation or other entity or cancel, release or
assign any indebtedness of any such person, except pursuant to contracts or
agreements in force at the date of this Agreement and which are set forth in the
Disclosure Letter; provided, however, that no sales may be made with recourse;
(s) fail to maintain all its properties in repair, order and condition no
worse than on the date of this Agreement other than as a result of ordinary wear
and tear;
(t) revoke Seller's election to be taxed as an S Corporation within the
meaning of Code Sections 1361 and 1362 or take or allow any action that may
result in the termination of Seller's status as a validly electing S Corporation
within the meaning of Code Sections 1361 and 1362;
(u) make or change any election in respect of Taxes, adopt or change any
accounting method in respect of Taxes or otherwise, enter into any closing
agreement, settle any claim or assessment in respect of Taxes, or consent to any
23
extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes, except as required by law, rule, regulation or
GAAP;
(v) make any withdrawals from retained earnings (including the Accumulated
Adjustments Account), other than for the payment of estimated taxes attributed
to the income of X.X. Xxxxxx construction company to be reported on the
individual income tax return of Sellers; or
(w) agree to do any of the foregoing.
Section 5.03 Maintenance of Insurance.
Seller shall maintain insurance in such amounts as are reasonable to cover
such risks as are customary in relation to the character and location of its
properties, and the nature of its business.
Section 5.04 All Reasonable Efforts.
Subject to the terms and conditions herein provided, Seller agrees to use,
all commercially reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
ARTICLE VI.
COVENANTS
Section 6.01 Current Information.
(a) During the period from the date of this Agreement to the Effective
Time, Seller will cause one or more of its representatives to confer with
representatives of Purchaser and report the general status of its ongoing
operations at such times as Purchaser may reasonably request. Seller will
promptly notify Purchaser of any material change in the normal course of its
business or in the operation of its properties and, to the extent permitted by
applicable law, of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the institution
or the known threat of material litigation involving Seller.
(b) Seller shall promptly inform Purchaser upon receiving notice of any
legal, administrative, arbitration or other proceedings, demands, notices,
audits or investigations (by any federal, state or local commission, agency or
board) relating to the alleged liability of Seller under any labor or employment
law.
Section 6.02 Access to Properties and Records.
Seller shall permit Purchaser reasonable access upon reasonable notice to
its properties, and shall disclose and make available to Purchaser during normal
business hours all of its books, papers and records relating to the assets,
properties, operations, obligations and liabilities, including, but not limited
to, all books of account (including the general ledger), tax records, minute
books of directors' (other than minutes that discuss any of the transactions
contemplated by this Agreement or any other subject matter Seller reasonably
determines should be treated as confidential) and stockholders' meetings,
organizational documents, Bylaws, material contracts and agreements, filings
with any regulatory authority, litigation files, plans affecting employees, and
any other business activities or prospects in which Purchaser may have a
reasonable interest. Seller shall provide and shall request its auditors to
provide Purchaser with such historical financial information regarding it (and
related audit reports, consents and work papers) as Purchaser may reasonably
24
request. Purchaser shall use commercially reasonable efforts to minimize any
interference with Seller's regular business operations during any such access to
Seller's property, books and records. Seller shall permit Purchaser, at
Purchaser's expense, to cause a "phase I environmental audit" and a "phase II
environmental audit" to be performed at any physical location owned or occupied
by Seller.
Section 6.03 Financial and Other Statements.
(a) Promptly upon receipt thereof, Seller will furnish to Purchaser copies
of the audit of the financial statements of Seller made by its independent
accountants and copies of all internal control reports submitted to Seller by
such accountants in connection with such audit of the financial statements of
Seller.
(b) With reasonable promptness Seller will furnish to Purchaser such
additional financial data that Seller possesses and as Purchaser may reasonably
request, including without limitation, detailed monthly financial statements.
Section 6.04 Disclosure Letter Supplements.
From time to time prior to the Effective Time, Seller will promptly
supplement or amend the Disclosure Letter delivered in connection herewith with
respect to any matter hereafter arising which, if existing, occurring or known
at the date of this Agreement, would have been required to be set forth or
described in such Disclosure Letter or which is necessary to correct any
information in such Disclosure Letter which has been rendered materially
inaccurate thereby.
Section 6.05 Consents and Approvals of Third Parties.
In addition to the Obligations of Article VI hereunder, Seller shall use
all commercially reasonable efforts to obtain as soon as practicable all
consents and approvals of any other persons necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
Section 6.06 Failure to Fulfill Conditions.
In the event that Seller determines that a condition to its obligation to
complete the Merger cannot be fulfilled and that it will not waive that
condition, it will promptly notify Purchaser.
Section 6.07 Employee Benefits.
In the event there are suitably qualified employees of Seller whose
positions do not continue after the Effective Time, the Purchaser intends to
approach them to fill vacancies within the Purchaser wherever possible.
Purchaser will review all Compensation and Benefit Plans to determine whether to
maintain, terminate or continue such plans.
Section 6.08 Tax Periods Ending On or Before the Closing Date.
Seller (or its shareholders) will prepare or cause to be prepared and file
or cause to be filed all tax returns for all periods ending on or prior to the
Closing Date which are filed after the Closing Date other than income tax
returns with respect to periods for which a consolidated income tax return of
Seller will include the operations of Merger Sub. Seller (or its shareholders)
will permit Purchaser to review and comment on each such tax return described in
the preceding sentence prior to filing.
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Section 6.09 Cooperation on Tax Matters.
(a) The parties hereto will cooperate fully, as and to the extent
reasonably requested by any other party or the Seller shareholders, in
connection with the filing of tax returns pursuant to this Section and any
audit, litigation or other proceeding with respect to all taxes. Such
cooperation will include the retention and (upon any other party's request) the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Merger Sub and Seller agree (i) to retain all
books and records with respect to tax matters pertinent to Seller relating to
any taxable period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by Seller or its
shareholders, any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any regulatory
authority, and (ii) to give the other parties (and Seller shareholders)
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if any such person so requests, Merger Sub or
Seller, as the case may be, will allow such person to take possession of such
books and records.
(b) Purchaser and Seller further agree, upon request, to use their best
efforts to obtain any certificate or other document from any regulatory
authority or any other person as may be necessary to mitigate, reduce or
eliminate any tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
(c) Purchaser and Seller further agree, upon request, to provide the other
party (or Seller shareholders) with all information that such person may be
required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
Section 6.10 Acquisition of Contractors Rental Corporation.
Seller shall use its best efforts to acquire Contractors Rental
Corporation.
ARTICLE VII.
REGULATORY AND OTHER MATTERS
Section 7.01 Meeting of Stockholders.
(a) Seller shall take all steps necessary to duly call, give notice of,
convene and hold a meeting of its stockholders for the purpose of considering
and voting on approval of this Agreement and the Merger, and for such other,
purposes as may be, in Seller's reasonable judgment, necessary or desirable (the
"Seller Stockholders Meeting"). In lieu of holding a Seller Stockholders
Meeting, if permitted by Seller's Certificate of Incorporation, Bylaws and the
WVBCA, Seller may obtain stockholder approval by means of a consent
solicitation. In connection with the solicitation of proxies with respect to the
Seller Stockholders Meeting, the Board of Directors of Seller shall recommend
approval of this Agreement to the Seller Stockholders and cooperate and consult
with Purchaser with respect to each of the foregoing matters. Seller shall use
its best efforts to solicit approval of the Merger.
(b) Purchaser shall, once it has completed the negotiation of such
acquisition(s) as it deems in the best interests of its stockholders and
required in order to have a business combination or combinations in which the
fair market value of the business or businesses acquired simultaneously is equal
to at least 80% of the Purchaser's net assets (excluding any deferred
compensation held by Xxxxxx Xxxxx Xxxxx, Incorporated), prepare the Proxy
Statement as described in Section 7.02 below.
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Section 7.02 Proxy Statement.
As soon as practicable after entering into the acquisitions referred to in
Section 7.01(b), Purchaser shall prepare a Proxy Statement, for the purpose of
taking such stockholder action on the Merger, this Agreement, any other
acquisition(s) it has entered into, and any revisions to its Certificate of
Incorporation contemplated by Purchaser, and file such Proxy Statement with the
SEC in preliminary form, respond to comments of the staff of the SEC and
promptly mail the Proxy Statement to the holders of record (as of the applicable
record date) of shares of voting stock of Purchaser.
Section 7.03 Regulatory Approvals.
Each of Seller and Purchaser will cooperate with the other and use all
reasonable efforts to promptly prepare and file any necessary documentation to
obtain any necessary regulatory approvals. Seller and Purchaser will furnish
each other and each other's counsel with all information concerning themselves,
directors, officers and stockholders and such other matters as may be necessary
or advisable in connection with any application, petition or other statement
made by or on behalf of Seller or Purchaser to any regulatory or governmental
body in connection with the Merger and the other transactions contemplated by
this Agreement. Each party acknowledges that time is of the essence in
connection with the preparation and filing of the documentation referred to
above. Seller shall have the right to review and approve in advance all
characterizations of the information relating to Seller which appears in any
filing made in connection with the transactions contemplated by this Agreement
with any governmental body. In addition, Seller and Purchaser shall each furnish
to the other a copy of each publicly available portion of such filing made in
connection with the transactions contemplated by this Agreement with any
governmental body promptly after its filing.
ARTICLE VIII.
CLOSING CONDITIONS
Section 8.01 Conditions to Each Party's Obligations under this Agreement.
The respective obligations of each party under this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, none of which may be waived:
(a) Stockholder Approval. (i) Purchaser shall enter into an Additional
Transaction to ensure that Seller's initial combinations have an aggregate fair
market value of at least 80% of Purchaser's net assets (excluding deferred
compensation or Xxxxxx Xxxxx Xxxxx, incorporated); (ii) this Agreement and the
transactions contemplated hereby, which shall include approval of another
business combination to ensure that Purchaser's initial business combinations
have an aggregate fair market value of at least 80% of Purchaser's net assets
(excluding deferred compensation of Xxxxxx Xxxxx Xxxxx, Incorporated) shall have
been approved by the requisite vote of the stockholders of Purchaser and Seller
in accordance with applicable law and regulations.
(b) Injunctions. None of the parties hereto shall be subject to any order,
decree or injunction of a court or agency of competent jurisdiction, and no
statute, rule or regulation shall have been enacted, entered, promulgated,
interpreted, applied or enforced by any Governmental Entity or regulatory
agency, that enjoins or prohibits the consummation of the transactions
contemplated by this Agreement.
(c) Regulatory Approvals. All required regulatory approvals, consents,
permits and authorizations shall have been obtained and shall remain in full
force and effect and all waiting periods relating thereto shall have expired;
and no such regulatory approval shall include any condition or requirement, that
would, in the judgment of the Board of Directors of Purchaser, have a Material
Adverse Effect on (x) Seller or (y) Xxxxxxxxx.
00
(x) Simultaneous Closing. Seller acknowledges and agrees that the closing
of the Merger must be simultaneous with such other acquisition(s) that, in the
aggregate, have a fair market value of at least 80% of Purchaser's net assets
(excluding deferred compensation of Xxxxxx Xxxxx Xxxxx, Incorporated).
Section 8.02 Conditions to the Obligations of Purchaser under this Agreement.
The obligations of Purchaser under this Agreement shall be further subject
to the satisfaction of the conditions set forth in this Section 8.02 at or prior
to the Closing Date:
(a) Representations and Warranties. Each of the representations and
warranties of Seller set forth in this Agreement that are qualified as to
materiality shall be true and correct in all respects and each representation or
warranty that is not so qualified shall be true and correct in all material
respects, in each case, as of the date of this Agreement and upon the Effective
Time with the same effect as though all such representations and warranties had
been made at the Effective Time (except to the extent such representations and
warranties speak as of an earlier date), and Seller shall have delivered to
Purchaser a certificate to such effect signed by the Chief Executive Officer and
the Chief Financial Officer of Seller as of the Effective Time.
(b) Agreements and Covenants. Seller shall have performed in all material
respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by it at or prior to
the Effective Time, and Purchaser shall have received a certificate signed on
behalf of Seller by the Chief Executive Officer and Chief Financial Officer of
Seller to such effect dated as of the Effective Time.
(c) Good Standing. Purchaser shall have received certificates (such
certificates to be dated as of a day as close as practicable to the Closing
Date) from appropriate authorities as to the good standing or corporate
existence, as applicable, of Seller.
(d) Third Party Consents. Seller shall have obtained the consent or
approval of each person whose consent or approval shall be required in
connection with the transactions contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license or other agreement or
instrument to which Seller is a party or is otherwise bound.
(e) Other Documents. Seller will furnish Purchaser with such certificates
of its officers or others and such other documents to evidence fulfillment of
the conditions set forth in this Section 8.02 or as are customary for
transaction of the type provided for herein as Purchaser may reasonably request.
(f) Objecting/Converting Stockholders. Stockholders of Purchaser holding
20% or more of the shares sold in its initial public offering do not vote
against the Acquisition and any Additional Transaction and do not exercise their
conversion rights as set forth in the Purchaser's Certificate of Incorporation.
(g) Dissenting Shareholders. None of the Seller's shareholders have
indicated their intent to exercise their dissenter's right of appraisal.
(h) Fairness Opinion. Purchaser shall have received an opinion from a firm
specializing in the evaluation of businesses, meeting the qualifications set
forth in the Purchaser's Certificate of Incorporation, to the effect that the
fair market value of the Seller plus any Additional Transaction entered into by
Purchaser is equal to at least 80% of Purchaser's net assets (excluding any
deferred compensation held by Xxxxxx Xxxxx Xxxxx, Incorporated).
28
(i) Acquisition of Contractors Rental Corporation. Seller shall have
completed its acquisition of Contractors Rental Corporation prior to the
Effective Time.
Section 8.03 Conditions to the Obligations of Seller under this Agreement.
The obligations of Seller under this Agreement shall be further subject to
the satisfaction of the conditions set forth in Section 8.03 at or prior to the
Closing Date:
(a) Representations and Warranties. Each of the representations and
warranties of Purchaser set forth in this Agreement that are qualified as to
materiality shall be true and correct in all respects and each representation or
warranty that is not so qualified shall be true and correct in all material
respects, in each case, as of the date of this Agreement and upon the Effective
Time with the same effect as though all such representations and warranties had
been made at the Effective Time (except to the extent such representations and
warranties speak as of an earlier date), and Purchaser shall have delivered to
Seller a certificate to such effect signed by the Chief Executive Officer and
the Chief Financial Officer of Purchaser as of the Effective Time.
(b) Agreements and Covenants. Purchaser shall have performed in all
material respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by it at or prior to
the Effective Time, and Seller shall have received a certificate signed on
behalf of Purchaser by the Chief Executive Officer and Chief Financial Officer
of Purchaser to such effect dated as of the Effective Time.
(c) Payment of Merger Consideration. Purchaser shall have delivered the
Merger Consideration to the Paying Agent on or before the Closing Date and the
Paying Agent shall provide Seller with a certificate evidencing such delivery.
(d) Good Standing. Seller shall have received a certificate (such
certificate to be dated as of a day as close as practicable to the Closing Date)
from the appropriate authority as to the good standing or corporate existence,
as applicable of each of Purchaser and Merger Sub.
(e) Other Documents. Purchaser will furnish Seller with such certificates
of their officers or others and such other documents to evidence fulfillment of
the conditions set forth in this Section 8.03 or as are customary for
transaction of the type provided for herein as Seller may reasonably request.
ARTICLE IX.
THE CLOSING
Section 9.01 Time and Place.
Subject to the provisions of Articles VIII and X hereof, the Closing of the
transactions contemplated hereby shall take place at the offices of Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C., at 10:00 a.m., or at such other place or time upon
which Purchaser and Seller mutually agree. A pre-closing of the transactions
contemplated hereby (the "Pre-Closing") shall take place at the offices of Xxxx
Xxxxxx Xxxxxxxx & Xxxxxx, P.C., at 10:00 a.m. on the day prior to the Closing
Date.
29
Section 9.02 Deliveries at the Pre-Closing and the Closing.
At the Pre-Closing there shall be delivered to Purchaser and Seller the
opinions, certificates, and other documents and instruments required to be
delivered at the Closing under Article IX hereof. At or prior to the Closing,
Purchaser shall deliver the Merger Consideration as set forth under Section
8.03(c) hereof.
ARTICLE X.
TERMINATION, AMENDMENT AND WAIVER
Section 10.01 Termination.
This Agreement may be terminated at any time prior to the Closing Date,
whether before or after approval of the Merger by the stockholders of Seller:
(a) At any time by the mutual written agreement of Purchaser and Seller;
(b) By either party (provided, that the terminating party is not then in
breach of any representation, warranty, covenant or other agreement contained
herein) if there shall have been a breach of any of the representations or
warranties set forth in this Agreement (subject to the standard set forth in
Section 8.02(a) or 8.03(a), as applicable) on the part of the other party, which
breach by its nature cannot be cured prior to the Termination Date or shall not
have been cured within 30 days after written notice of such breach by the
terminating party to the other party;
(c) By either party (provided, that the terminating party is not then in
breach of any representation or warranty or breach of any covenant or other
agreement contained herein) if there shall have been a failure to perform or
comply in any material respect with any of the covenants, agreements or
conditions to each parties' obligations have not been satisfied, all as set
forth in this Agreement on the part of the other party, which failure by its
nature cannot be cured prior to the Termination Date or shall not have been
cured within 30 days after written notice of such failure by the terminating
party to the other party;
(d) At the election of either party, if the Closing shall not have occurred
by the Termination Date, or such later date as shall have been agreed to in
writing by Purchaser and Seller; provided, that no party may terminate this
Agreement pursuant to this Section 10.01(d) if the failure of the Closing to
have occurred on or before said date was due to such party's willful breach of
any representation or warranty or material breach of any covenant or other
agreement contained in this Agreement;
(e) By either party if (i) final action has been taken by any regulatory
agency whose approval is required in connection with this Agreement and the
transactions contemplated hereby, which final action (x) has become unappealable
and (y) does not approve this Agreement or the transactions contemplated hereby,
(ii) any regulatory agency whose approval or nonobjection is required in
connection with this Agreement and the transactions contemplated hereby has
stated that it will not issue the required approval or nonobjection, or (iii)
any court of competent jurisdiction or other governmental authority shall have
issued an order, decree, ruling or taken any other action restraining, enjoining
or otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and unappealable;
(f) By either party, if Stockholder Approval shall have not been obtained
at the Seller Stockholders Meeting duly convened therefor or at any adjournment
or postponement thereof;
30
(g) By Purchaser if prior to obtaining Stockholder Approval the Board of
Directors of Seller fails to publicly reaffirm its adoption and recommendation
of this Agreement, the Merger or the other transactions contemplated by this
Agreement within ten business days of receipt of a request by Purchaser to
provide such reaffirmation.
(h) By either party, if Stockholder Approval of the transactions
contemplated by this Agreement as well as an Additional Transaction that ensures
that Purchaser's initial business combinations have an aggregate fair market
value of at least 80% of Purchaser's net assets (excluding deferred compensation
of Xxxxxx Xxxxx Xxxxx, Inc.) has not been obtained at the Purchaser Stockholders
Meeting duly convened therefore or at any adjournment or postponement thereof.
Section 10.02 Effect of Termination.
(a) In the event of termination of this Agreement pursuant to any provision
of Section 10.01, this Agreement shall forthwith become void and have no further
force, except that (i) the provisions of Sections 10.02, 11.01, 11.06, 11.09,
11.10, and any other Section which, by its terms, relates to post-termination
rights or obligations, shall survive such termination of this Agreement and
remain in full force and effect.
(b) If this Agreement is terminated, expenses and damages of the parties
hereto shall be determined as follows:
(i) Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid
by the party incurring such expenses.
(ii) In the event of a termination of this Agreement because of a
willful breach of any representation, warranty, covenant or agreement
contained in this Agreement, the breaching party shall be liable for any
and all damages, costs and expenses, including all reasonable attorneys'
fees, sustained or incurred by the non-breaching party as a result thereof
or in connection therewith or with respect to the enforcement of its rights
hereunder.
Section 10.03 Amendment, Extension and Waiver.
Subject to applicable law, at any time prior to the Effective Time (whether
before or after approval thereof by the stockholders of Seller), the parties
hereto by action of their respective Boards of Directors, may (a) amend this
Agreement, (b) extend the time for the performance of any of the obligations or
other acts of any other party hereto, (c) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or (d) waive compliance with any of the agreements or
conditions contained herein; provided, however, that after any approval of this
Agreement and the transactions contemplated hereby by the stockholders of
Seller, there may not be, without further approval of such stockholders, any
amendment of this Agreement which reduces the amount or value, or changes the
form of, the Merger Consideration to be delivered to Seller's stockholders
pursuant to this Agreement. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. Any
agreement on the part of a party hereto to any extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party, but such waiver or failure to insist on strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Any termination of
this Agreement pursuant to Article X may only be effected upon a vote of a
majority of the entire Board of Directors of the terminating party.
31
ARTICLE XI.
MISCELLANEOUS
Section 11.01 Public Announcements.
Seller and Purchaser shall cooperate with each other in the development and
distribution of all news releases and other public disclosures with respect to
this Agreement, and except as may be otherwise required by law, neither Seller
nor Purchaser shall issue any news release, or other public announcement or
communication with respect to this Agreement unless such news release or other
public announcement or communication has been mutually agreed upon by the
parties hereto.
Section 11.02 Survival.
All representations, warranties and covenants in this Agreement or in any
instrument delivered pursuant hereto shall expire and be terminated and
extinguished at the Effective Time, except for those covenants and agreements
contained herein which by their terms apply in whole or in part after the
Effective Time.
Section 11.03 Notices.
All notices or other communications hereunder shall be in writing and shall
be deemed given if delivered by receipted hand delivery or mailed by prepaid
registered or certified mail (return receipt requested) or by recognized
overnight courier addressed as follows:
If to Seller, to: Xxxxxxxx X. Xxxxxxxx
Chairman of the Board and Chief Executive Officer
Energy Services Acquisition Corp.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
With required copies to: Xxxx Xxxxxx, Esq.
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
If to Purchaser, to: Xxxxx X. Xxxxx
c/o X. X. Xxxxxx Construction Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
or such other address as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given: (a) as of the
date delivered by hand; (b) three business days after being delivered to the
U.S. mail, postage prepaid; or (c) one business day after being delivered to the
overnight courier.
32
Section 11.04 Parties in Interest.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto without the prior written
consent of the other party, and that (except as specifically provided in this
Agreement) nothing in this Agreement is intended to confer upon any other person
any rights or remedies under or by reason of this Agreement. Nothing in this
Agreement is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
Section 11.05 Complete Agreement.
This Agreement, including the Exhibits hereto and the documents and other
writings referred to herein or therein or delivered pursuant hereto, contains
the entire agreement and understanding of the parties with respect to its
subject matter. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties other than those expressly set
forth herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties, both written and oral, with respect to its
subject matter.
Section 11.06 Counterparts.
This Agreement may be executed in two or more counterparts all of which
shall be considered one and the same agreement and each of which shall be deemed
an original.
Section 11.07 Severability.
In the event that any one or more provisions of this Agreement shall for
any reason be held invalid, illegal or unenforceable in any respect, by any
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement and the parties shall
use their reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of
this Agreement.
Section 11.08 Governing Law.
This Agreement shall be governed by the laws of the State of West Virginia,
without giving effect to its principles of conflicts of laws.
Section 11.09 Interpretation.
When a reference is made in this Agreement to Sections or Exhibits, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. The recitals hereto constitute an integral part of this Agreement.
References to Sections include subsections, which are part of the related
Section (e.g., a section numbered "Section 5.01(a)" would be part of "Section
5.01" and references to "Section 5.01" would also refer to material contained in
the subsection described as "Section 5.01(a)"). The table of contents, index and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The phrases
"the date of this Agreement", "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to the date set
forth in the Recitals to this Agreement.
33
Section 11.10 Specific Performance.
The parties hereto agree that irreparable damage would occur in the event
that the provisions contained in this Agreement were not performed in accordance
with its specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
34
IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first set
forth above.
ENERGY SERVICES ACQUISITION CORP.
By:/s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxxxx
Chairman of the Board and Chief Executive Officer
X. X. XXXXXX CONSTRUCTION COMPANY, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxx
Chairman of the Board
35
EXHIBIT A
PLAN OF MERGER
This PLAN OF MERGER dated as of __________, 2008 (the "Plan of Merger") is
entered into by and between Energy Services Merger Sub, Inc. II (the "Merger
Sub"), a West Virginia corporation, and X. X. Xxxxxx Construction Company, Inc.,
a West Virginia corporation (the "Seller"). Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Merger Agreement (as
defined below).
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
__________, 2008 (the "Merger Agreement"), by and between Energy Services
Acquisition Corp. (the "Purchaser") and Seller, Seller will merge with and into
Merger Sub, a wholly owned Subsidiary of Purchaser (the "Merger"); and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Merger Agreement and for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. The Merger. On the effective date, Merger Sub shall be merged
with and into Seller, with Seller being the surviving entity (the "Merger"). The
Merger shall be subject to the terms and conditions of the Merger Agreement.
Upon completion of the Merger, the separate corporate existence of Merger Sub
shall thereupon cease. Seller shall continue to be governed by the laws of the
State of West Virginia and its separate corporate existence with all of its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger.
Section 2. Name of Surviving Corporation. The name of the surviving
corporation in the Merger (the "Surviving Corporation") shall be
"____________________".
Section 3. Location of Offices. The business of the Surviving Corporation
shall be conducted at its administrative office at
____________________________________________________, and at all other locations
where Seller was legally authorized to carry out its business immediately prior
to the Merger.
Section 4. Effect on Outstanding Shares.
(a) By virtue of the Merger, automatically and without any action on the
part of the holder thereof, each share of Seller Common Stock issued and
outstanding at the effective time of the Merger (the "Effective Time"), (i)
shares held directly or indirectly by Purchaser (other than shares held in a
fiduciary capacity or in satisfaction of a debt previously contracted), and (ii)
Treasury Stock shall become and be converted into the right to receive the
merger consideration set forth at Section 2.02 of the Merger Agreement.
(b) At the Effective Time, each share of Seller Common Stock held directly
or indirectly by Purchaser (other than shares held in a fiduciary capacity or in
satisfaction of a debt previously contracted) and Treasury Stock shall be
cancelled and retired and cease to exist, and no exchange or payment shall be
made with respect thereto.
(c) The shares of common stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall become shares of the Surviving
Corporation at the Effective Time by virtue of the Merger, automatically and
without any action on the part of the holder thereof, and shall thereafter
constitute all of the issued and outstanding shares of the capital stock of the
Surviving Corporation.
A-1
Section 5. Assets and Liabilities. At the Effective Time, all assets and
property (real, personal, and mixed, tangible and intangible, choses in action,
rights, and credits) then owned by Seller shall pass to and vest in the
Surviving Corporation without any conveyance or other transfer. The Surviving
Corporation shall be deemed to be a continuation of Seller. The rights and
obligations, including liabilities, of Seller shall become the rights and
obligations of the Surviving Corporation.
Section 6. Directors and Officers. At the Effective Time, the directors and
officers of Merger Sub shall become the directors and officers of the Surviving
Corporation.
Section 7. Certificate of Incorporation and Bylaws. At the Effective Time,
the certificate of incorporation and bylaws of Seller shall be amended in their
entirety to conform to the certificate of incorporation and bylaws of Merger Sub
in effect immediately prior to the Effective Time and shall become the
certificate of incorporation and bylaws of the Surviving Corporation.
Section 8. Termination. This Plan of Merger shall be terminated
automatically without further act or deed of either of the parties hereto in the
event of the termination of the Merger Agreement in accordance with Article X
thereof.
Section 9. Stockholder Approval. The transactions contemplated by this Plan
of Merger have been approved by the affirmative vote of a majority of the
outstanding shares of Seller as sole shareholder of Merger Sub.
Section 10. Amendments. This Plan of Merger may be amended by a subsequent
writing signed by the parties hereto upon the approval of the board of directors
of each of the parties hereto.
Section 11. Counterparts. This Plan of Merger may be executed in two or
more counterparts, each of which shall be deemed to be an original and all of
which taken together shall constitute one instrument.
Section 12. Successors. This Plan of Merger shall be binding upon the
successors of Seller.
Section 13. Governing Law. This Plan of Merger shall be governed by, and
interpreted in accordance with the laws of West Virginia, without regarding to
conflicts of laws.
Section 14. Severability. In the event that any one or more provisions of
this Plan of Merger shall for any reason be held invalid, illegal or
unenforceable in any respect, by any court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Plan of Merger and the parties shall use their reasonable efforts to
substitute a valid, legal and enforceable provision which, insofar as practical,
implements the purposes and intents of this Plan of Merger.
Section 15. Captions and References. The captions contained in this Plan of
Merger are for convenience of reference only and do not form a part of this Plan
of Merger.
[Signature page follows]
A-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan
of Merger to be duly executed as of the date first above written.
ENERGY SERVICES MERGER SUB II, INC.
By:
--------------------------------------
Name
Title
I, ________________, the duly elected, qualified and acting Secretary of
Energy Services Merger Sub, Inc., hereby certify that this Agreement and Plan of
Merger has been approved and adopted by Energy Services Acquisition Corp., the
sole stockholder of Energy Services Merger Sub, Inc., as of
____________________, 2008.
-----------------------
[Name]
Secretary
X. X. XXXXXX CONSTRUCTION COMPANY, INC.
By:
---------------------------------------
[Name]
[Title]
I, _________________________, the duly elected, qualified and acting
Secretary of Energy Services Acquisition Corp. hereby certify that this
Agreement and Plan of Merger has been approved and adopted by Energy Services
Acquisition Corp., as of ___________________, 2008.
-------------------------
Xxxxxxxx X. Xxxxxxxx
Chairman of the Board and
Chief Executive Officer
A-3
