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EXHIBIT 2(a)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TESORO PETROLEUM CORPORATION
CNRG ACQUISITION CORP.
AND
COASTWIDE ENERGY SERVICES, INC.
NOVEMBER 20, 1995
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER........................................................................... A-1
SECTION 1.1 The Merger........................................................ A-1
SECTION 1.2 Effective Time.................................................... A-1
SECTION 1.3 Effects of the Merger............................................. A-1
SECTION 1.4 Certificate of Incorporation and By-laws.......................... A-2
SECTION 1.5 Directors......................................................... A-2
SECTION 1.6 Officers.......................................................... A-2
SECTION 1.7 Vacancies......................................................... A-2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE
OF CERTIFICATES.................................................................... A-2
SECTION 2.1 Effect on Capital Stock........................................... A-2
(a) Capital Stock of Sub..................................................... A-2
(b) Cancellation of Company and Parent Owned Stock and Rights................ A-2
(c) Conversion of Shares..................................................... A-2
(d) No Fractional Shares..................................................... A-3
(e) Shares of Dissenting Stockholders........................................ A-3
SECTION 2.2 Exchange of Certificates
(a) Exchange Agent........................................................... A-3
(b) Payment of Merger Consideration.......................................... A-3
(c) Exchange Procedure....................................................... A-3
(d) Distributions with Respect to Unexchanged Shares......................... A-4
(e) No Further Ownership Rights in Shares.................................... A-4
(f) Merger Consideration for Unexchanged Shares.............................. A-4
(g) Options Under Option Plans............................................... A-5
(h) Convertible Debentures................................................... A-5
(i) Warrants................................................................. A-5
ARTICLE III
REPRESENTATIONS AND WARRANTIES....................................................... A-5
SECTION 3.1 Representations and Warranties of the Company..................... A-5
(a) Organization, Standing and Power......................................... A-5
(b) Subsidiaries............................................................. A-6
(c) Capital Structure........................................................ A-6
(d) Authority; Non-contravention............................................. A-6
(e) SEC Documents............................................................ A-7
(f) Information Supplied..................................................... A-8
(g) Absence of Certain Changes or Events..................................... A-8
(h) Absence of Super majority Provision...................................... A-8
(i) Brokers.................................................................. A-9
(j) Litigation............................................................... A-9
(k) Absence of Changes in Benefit Plans...................................... A-9
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(l) ERISA Compliance......................................................... X- 0
(x) Taxes.................................................................... A-11
(n) No Excess Parachute Payments............................................. A-11
(o) Environmental Matters.................................................... A-12
(p) Compliance with Laws..................................................... A-14
(q) Material Contracts and Agreements........................................ A-15
(r) Insurance................................................................ A-15
(s) Title to Properties, etc................................................. A-15
(t) Intellectual Property.................................................... A-15
(u) Labor Matters............................................................ A-16
(v) Undisclosed Liabilities.................................................. A-16
(w) Transactions with Affiliates............................................. A-16
SECTION 3.2 Representations and Warranties of Parent and Sub.................. A-16
(a) Organization; Standing and Power......................................... A-16
(b) Authority; Non-contravention............................................. A-16
(c) Authorization for Parent Common Stock.................................... A-17
(d) SEC Documents............................................................ A-17
(e) Information Supplied..................................................... A-17
(f) Litigation............................................................... A-18
(g) Undisclosed Liabilities.................................................. A-18
(h) Brokers.................................................................. A-18
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS............................................ A-18
SECTION 4.1 Conduct of Business............................................... A-18
(a) Ordinary Course.......................................................... A-18
(b) Changes in Employment Arrangements....................................... A-20
(c) Severance................................................................ A-20
SECTION 4.2 Other Actions..................................................... A-20
SECTION 4.3 Advice of Changes................................................. A-20
ARTICLE V
ADDITIONAL AGREEMENTS................................................................ A-20
SECTION 5.1 Stockholder Approval; Preparation of Proxy Statement; Preparation
of Registration Statement...................................................... A-20
SECTION 5.2 Letter of the Company's Accountants............................... A-21
SECTION 5.3 Letter of Parent's Accountants.................................... A-21
SECTION 5.4 Access to Information............................................. A-21
SECTION 5.5 Reasonable Efforts; Notification.................................. A-22
SECTION 5.6 Stock Options..................................................... A-23
SECTION 5.7 Indemnification................................................... A-23
SECTION 5.8 Fees and Expenses................................................. A-23
SECTION 5.9 Public Announcements.............................................. A-23
SECTION 5.10 Stockholder Litigation............................................ A-23
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ARTICLE VI
CONDITIONS PRECEDENT................................................................. A-24
SECTION 6.1 Conditions to Each Party's Obligation to Effect the Merger........ A-24
(a) Company Stockholder Approval............................................. A-24
(b) HSR Act.................................................................. A-24
(c) No Injunctions or Restraints............................................. A-24
(d) Registration Statement Effectiveness..................................... A-24
(e) Exchange Listing......................................................... A-24
(f) Blue Sky Filings......................................................... A-24
SECTION 6.2 Conditions of Parent and Sub...................................... A-24
(a) Compliance............................................................... A-24
(b) Certifications and Opinion............................................... A-24
(c) Representations and Warranties True...................................... A-25
(d) Affiliate Letters........................................................ A-25
(e) Tax Opinion.............................................................. A-26
(f) Consents, etc............................................................ A-26
(g) No Litigation............................................................ A-26
(h) Dissenting Stockholders.................................................. A-26
(i) Satisfactory Due Diligence............................................... A-26
(j) No Material Adverse Change............................................... A-26
(k) Opinion of Financial Advisor............................................. A-26
(l) Employment Agreement..................................................... A-26
(m) Non-Competition Agreement................................................ A-26
(n) Lender Approval.......................................................... A-27
(o) Termination of Certain Agreements........................................ A-27
SECTION 6.3 Conditions of the Company......................................... A-27
(a) Compliance............................................................... A-27
(b) Certifications and Opinion............................................... A-27
(c) Representations and Warranties True...................................... A-27
(d) Tax Opinion.............................................................. A-28
(e) Assumption............................................................... A-28
(f) No Material Adverse Change............................................... A-28
(g) Opinion of Financial Advisor............................................. A-28
(h) Satisfactory Due Diligence............................................... A-28
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER.................................................... A-28
SECTION 7.1 Termination....................................................... A-28
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS............................................. A-29
SECTION 8.1 No Solicitation................................................... A-29
SECTION 8.2 Expense Reimbursements............................................ A-30
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ARTICLE IX
GENERAL PROVISIONS................................................................... A-31
SECTION 9.1 Nonsurvival of Representations and Warranties..................... A-31
SECTION 9.2 Notices........................................................... A-31
SECTION 9.3 Definitions....................................................... A-32
SECTION 9.4 Interpretation.................................................... A-32
SECTION 9.5 Counterparts...................................................... A-32
SECTION 9.6 Entire Agreement: No Third-Party Beneficiaries.................... A-32
SECTION 9.7 Governing Law..................................................... A-32
SECTION 9.8 Assignment........................................................ A-32
SECTION 9.9 Enforcement of the Agreement...................................... A-32
SECTION 9.10 Severability...................................................... A-33
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AGREEMENT AND PLAN OF MERGER dated as of November 20, 1995 (the
"Agreement"), by and among TESORO PETROLEUM CORPORATION, a Delaware corporation
("Parent"), CNRG ACQUISITION CORP., a Delaware corporation ("Sub") and a wholly
owned subsidiary of Parent, and COASTWIDE ENERGY SERVICES, INC., a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions of this Agreement;
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the merger of the Company with and into Sub (the "Merger"), upon
the terms and subject to the conditions of this Agreement, whereby each issued
and outstanding share (a "Share") of the Company's Common Stock, $.01 par value
("Common Stock"), not owned by the Company, Parent, Sub or any wholly-owned
subsidiary of the Company, Parent or Sub will be converted into the right to
receive .41 share of common stock, $.16 2/3 par value, of Parent, together with
any associated Preferred Stock Purchase Rights (the "Parent Shares") and cash in
lieu of any fraction thereof and $2.55 in cash; and
WHEREAS, for federal tax purposes, it is intended that the Merger shall
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
hereof and in accordance with the Delaware General Corporation Law (the "DGCL"),
the Company shall be merged with and into Sub at the Effective Time of the
Merger (as hereinafter defined). At the election of Parent, any direct
wholly-owned subsidiary (as defined in Section 9.3) of Parent may be substituted
for Sub as a constituent corporation in the Merger. In such event, the parties
agree to execute an appropriate amendment to this Agreement in order to reflect
the foregoing. Following the Merger, the separate corporate existence of the
Company shall cease and Sub shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all the rights and
obligations of the Company in accordance with the DGCL.
SECTION 1.2 Effective Time. As soon as practicable following the
satisfaction or, to the extent permitted hereunder, waiver of the conditions set
forth in Article VI, the Surviving Corporation shall file the certificate of
merger (the "Certificate of Merger") required by the DGCL with respect to the
Merger and other appropriate documents (the "Articles of Merger") executed in
accordance with the relevant provisions of the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Delaware Secretary of State, or at such other time as Sub and the Company shall
agree should be specified in the Articles of Merger and the Certificate of
Merger (the time the Merger becomes effective being the "Effective Time of the
Merger"). The closing of the Merger (the "Closing") shall take place at the
offices of Fulbright & Xxxxxxxx L.L.P., in Houston, Texas, on the date of the
meeting of stockholders of the Company contemplated by this Agreement to approve
the Merger (the "Stockholders Meeting"), or, if any of the conditions set forth
in Article VI have not been satisfied, then as soon as practicable thereafter,
or at such other time and place or such other date as Parent and the Company
shall agree (the "Closing Date").
SECTION 1.3 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL. If at any time after the Effective Time of the Merger, the
Surviving Corporation shall consider or be advised that any further assignments
or assurances in law or otherwise are necessary or desirable to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation, all rights, title
and interests in all real estate and other property and all privileges, powers
and franchises of the Company and Sub, the Surviving Corporation and its proper
officers and directors, in the name and on behalf of the Company and Sub, shall
execute and deliver all
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such proper deeds, assignments and assurances in law and do all things necessary
and proper to vest, perfect or confirm title to such property or rights in the
Surviving Corporation and otherwise to carry out the purpose of this Agreement,
and the proper officers and directors of the Surviving Corporation are fully
authorized in the name of the Company and Sub or otherwise to take any and all
such action.
SECTION 1.4 Certificate of Incorporation and By-laws. (a) The Certificate
of Incorporation of the Sub as in effect immediately prior to the Effective Time
of the Merger shall be amended as of the Effective Time of the Merger so that
Article First of Sub's Certificate of Incorporation reads in its entirety: "The
name of the corporation is Coastwide Marine Services, Inc." and, as so amended,
such Certificate of Incorporation shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
(b) The By-laws of Sub as in effect immediately prior to the Effective Time
of the Merger shall be the By-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
SECTION 1.5 Directors. The directors of Sub immediately prior to the
Effective Time of the Merger shall be the directors of the Surviving Corporation
and shall hold office in accordance with the Certificate of Incorporation and
By-laws of the Surviving Corporation from the Effective Time of the Merger until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.6 Officers. The officers of the Sub immediately prior to the
Effective Time of the Merger shall be the officers of the Surviving Corporation
and shall hold office in accordance with the Certificate of Incorporation and
By-laws of the Surviving Corporation from the Effective Time of the Merger until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.7 Vacancies. If at the Effective Time of the Merger a vacancy
shall exist in the Board of Directors or in any of the offices of the Surviving
Corporation, such vacancy may thereafter be filled in the manner provided by the
DGCL and the Certificate of Incorporation and By-laws of the Surviving
Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.1 Effect on Capital Stock. As of the Effective Time of the
Merger, by virtue of the Merger and without any action on the part of the holder
of any Shares:
(a) Capital Stock of Sub. Each issued and outstanding share of the
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Cancellation of Company and Parent Owned Stock and Rights. All
Shares and any rights (including the Class B Warrants and the Convertible
Debt as hereinafter defined) that are held in treasury by the Company or
are owned by any wholly-owned subsidiary of the Company and any Shares and
any rights (including the Class B Warrants and the Convertible Debt) to
acquire Shares owned by Parent, Sub or any other wholly-owned subsidiary of
Parent or Sub shall be canceled and no consideration shall be delivered in
exchange therefor.
(c) Conversion of Shares. Subject to Sections 2.1(b), (d) and (e),
each issued and outstanding Share shall be converted into the right to
receive $2.55 in cash plus .41 Parent Share, together with any associated
Preferred Stock Purchase Rights (and cash in lieu of fractional shares as
provided in Section 2.1(d)) upon the surrender of the certificate formerly
representing such Share pursuant to Section 2.2 (the "Merger
Consideration"). If the closing price of Parent Shares on the date
("Determination Date") which is two trading days prior to the effective
date of the Registration Statement (as
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defined in Section 5.1(b)) is no less than $8.25 per Parent Share nor no
more than $10.50 per Parent Share, the Merger Consideration shall be fixed
as stated in the preceding sentence. If the closing price on the
Determination Date is less than $8.25 per Parent Share or more than $10.50
per Parent Share the parties shall endeavor in good faith to negotiate
revised terms for the Merger Consideration, recognizing that there is no
obligation on the part of either party to reach agreement, and, if
successful, shall fix the adjusted Merger Consideration as of the
Determination Date. For purposes of this Agreement the term "Merger
Consideration" shall include any adjustment made thereto under this Section
2.1(c).
(d) No Fractional Shares. No fractional Parent Shares shall be issued
in the Merger. All fractional Parent Shares that a holder of Shares would
otherwise be entitled to receive as a result of the Merger shall be
aggregated and if a fractional Parent Share results from such aggregation,
such holder shall be entitled to receive, in lieu thereof, an amount in
cash determined by multiplying the average of the daily closing sale price
per Parent Share on the New York Stock Exchange for the ten trading days
next preceding the Effective Time of the Merger by the fraction of a Parent
Share to which such holder would otherwise have been entitled. No interest
shall be paid on such amount. Alternatively, Parent and Sub shall have the
option of instructing the Exchange Agent (as defined in Section 2.2(a)) to
aggregate all fractional Parent Shares, sell such Parent Shares in the
public market and distribute to holders of fractional Parent Shares a pro
rata portion of the proceeds of such sale. No such cash in lieu of
fractional Parent Shares shall be paid to any holder of fractional Parent
Shares until Certificates (as defined in Section 2.2(c)) representing such
Parent Shares are surrendered and exchanged in accordance with Section
2.2(c). None of Parent, Sub, the Company, the Surviving Corporation or
their transfer agents shall be liable to a holder of the Shares for any
amount paid to a public official pursuant to applicable property, escheat
or similar laws.
(e) Shares of Dissenting Stockholders. Notwithstanding anything in
this Agreement to the contrary, any holder of Shares outstanding
immediately prior to the Effective Time of the Merger who is entitled to
demand and elects to demand appraisal rights under sec. 262 of the DGCL and
who has fully complied with the provisions thereof and who has not
effectively withdrawn or lost such right (a "Dissenting Stockholder"),
shall not receive the Merger Consideration, but shall be entitled to
receive from the Surviving Corporation such consideration as may be
determined to be due to such Dissenting Stockholder in consideration for
such Dissenting Stockholder's Shares pursuant to sec. 262 of the DGCL;
provided, however, that each Share outstanding immediately prior to the
Effective Time of the Merger and held by a Dissenting Stockholder who,
after the Effective Time of the Merger, withdraws his demand for appraisal
under sec. 262 of the DGCL, in writing delivered to the Surviving
Corporation (subject to the written approval of the Surviving Corporation
to the extent required by sec. 262 of the DGCL) or otherwise loses his
right of appraisal, in either case pursuant to the DGCL, shall be deemed to
be converted, as of the Effective Time of the Merger, into the right to
receive the Merger Consideration and any cash in lieu of fractional shares
issuable and payable with respect to his Shares. The Company shall give
Parent (i) prompt notice of any written demands for appraisal received by
the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to any such demands. The Company shall not,
without the prior written consent of Parent, voluntarily make any payment
with respect to, or settle, offer to settle or otherwise negotiate, any
such demands.
SECTION 2.2 Exchange of Certificates. (a) Exchange Agent. Prior to the
Effective Time of the Merger, Parent shall select a bank or trust company to act
as exchange agent (the "Exchange Agent") for the issue of the Merger
Consideration upon surrender of certificates representing Shares.
(b) Payment of Merger Consideration. Parent shall take all steps
necessary to enable and cause there to be provided to the Exchange Agent on
a timely basis, as and when needed after the Effective Time of the Merger,
certificates for the Parent Shares to be issued upon the conversion of the
Shares pursuant to Section 2.1. Parent or the Surviving Corporation shall
timely make available to the Exchange Agent the cash component of the
Merger Consideration.
(c) Exchange Procedure. As soon as reasonably practicable after the
Effective Time of the Merger, the Exchange Agent shall mail to each holder
of record of a certificate or certificates that
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immediately prior to the Effective Time of the Merger represented
outstanding Shares (the "Certificates"), other than the Company, Parent,
Sub and any wholly owned subsidiary of the Company, Parent or Sub, (i) a
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in a form
and have such other provisions as Parent and Sub may reasonably specify)
and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by the Surviving Corporation, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration, and the Certificate so surrendered shall forthwith be
canceled. If the Merger Consideration is to be issued to a person other
than the person in whose name the Certificate so surrendered is registered,
it shall be a condition of exchange that such Certificate shall be properly
endorsed or otherwise in proper form for transfer and that the person
requesting such exchange shall pay any transfer or other taxes required by
reason of the exchange to a person other than the registered holder of such
Certificate or establish to the satisfaction of the Surviving Corporation
that such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any
time after the Effective Time of the Merger to represent only the right to
receive upon such surrender the Merger Consideration into which the Shares
theretofore represented by such Certificate shall have been converted
pursuant to Section 2.1. The Exchange Agent shall not be entitled to vote
or exercise any rights of ownership with respect to the Parent Shares held
by it from time to time hereunder, except that it shall receive and hold
all dividends or other distributions paid or distributed with respect
thereto for the account of persons entitled thereto.
(d) Distributions with Respect to Unexchanged Shares. None of the
Merger Consideration and no dividends or other distributions declared or
made after the Effective Time of the Merger with respect to the Parent
Shares with a record date after the Effective Time of the Merger shall be
paid to the holder of any Certificate with respect to the Parent Shares
represented thereby until the holder of record of such Certificate shall
surrender such Certificate. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the
record holder of the Certificates representing the Parent Shares issued in
exchange therefor, without interest, (i) at the time of such surrender, the
Merger Consideration with respect to such Parent Share and the amount of
dividends or other distributions, if any, with a record date after the
Effective Time of the Merger theretofore paid with respect to such whole
Parent Shares, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective
Time of the Merger but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole Parent Shares.
(e) No Further Ownership Rights in Shares. All Parent Shares issued
upon the surrender of Certificates in accordance with the terms of this
Article II, together with any dividends payable thereon to the extent
contemplated by this Section 2.2, shall be deemed to have been exchanged
and paid in full satisfaction of all rights pertaining to the Shares
theretofore represented by such Certificates and, at the Effective Time of
the Merger, there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the Shares that were
outstanding immediately prior to the Effective Time of the Merger. If,
after the Effective Time of the Merger, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged
as provided in this Article II.
(f) Merger Consideration for Unexchanged Shares. At any time more than
six months after the Effective Time, if the Exchange Agent holds any Merger
Consideration or any dividends or other distributions in respect of Parent
Shares with respect to which the holder of record of the Certificate
therefor has not surrendered such Certificate, the Surviving Company, on
written notice, may direct the Exchange Agent to deliver such Merger
Consideration and all such dividends and other distributions to the
Surviving Company. Upon receipt thereof, the Surviving Company shall have
no obligations to segregate any cash so received and the holder who has not
surrendered such Certificate shall look solely
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to the Surviving Company for payment of the Merger Consideration and any
applicable dividends or other distributions.
(g) Options Under Option Plans. At the Effective Time, each option
granted by the Company to purchase shares of Common Stock under the Option
Plans, as hereinafter defined, which is outstanding and unexercised
immediately prior thereto, shall be converted automatically into an option
to purchase the shares of Parent Shares in an amount and at an exercise
price determined as provided below (and otherwise having the same duration
and other terms as the original option):
(1) the number of shares of Parent Shares to be subject to the new
option shall be equal to the product of the number of shares of Common
Stock subject to the original option and .41, provided that any
fractional shares of Parent Shares resulting from such multiplication
shall be rounded to the nearest whole share; and
(2) the exercise price per share of Parent Shares to be subject to
the new option shall be equal to (i) the exercise price of the number of
shares of Common Stock under the original option divided by .41 minus
(ii) $6.2195 (rounded to the nearest cent), provided, that if such
amount is less than $0, the holder of such option shall, upon exercise,
receive, in cash, the amount by which such amount is less than $0.
(3) if the Merger Consideration is adjusted pursuant to Section
2.1(c), the terms of subsections (1) and (2) hereof shall be adjusted
accordingly to reflect the change in the fractional Parent Share and the
cash consideration comprising the Merger Consideration as adjusted.
(h) Convertible Debentures. The Coastwide 8% Convertible Subordinated
Debentures due July 1, 2004 (the "Convertible Debentures"), outstanding at
the Effective Time shall be assumed by Sub and remain outstanding
thereafter, and from and after the Effective Time, the holders of the
Convertible Debentures shall have the right to convert such Convertible
Debentures into such number of shares of Parent Shares and such amount of
cash received by a holder of the number of shares of Company Shares into
which such Convertible Debentures might have been converted immediately
prior to the Merger.
(i) Warrants. With regard to the Class B Warrants to purchase shares
of Common Stock ("Class B Warrants"), subject to the terms of the Warrant
Agreement dated as of September 30, 1993, by and between the Company and
Chemical Shareholder Services Group, Inc. (the "Warrant Agent"), Parent
shall enter into an amended Warrant Agreement with the Warrant Agent,
giving each holder of Class B Warrants, the right (prior to the expiration
date of the warrants), upon payment of the warrant price in effect
immediately prior to such action, to purchase upon exercise of each warrant
the number of shares of Parent Shares and cash that he would have been
entitled to receive at the Effective Date if the warrant had been exercised
immediately prior thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, Parent and Sub as follows:
(a) Organization, Standing and Power. Each of the Company and each of
its subsidiaries is a corporation duly organized, validly existing and in
good standing under the law of the jurisdiction in which it is incorporated
and has the requisite corporate power and authority to carry on its
business as now being conducted. Each of the Company and each of its
subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to
be so qualified or licensed to do business (individually or in the
aggregate) would not have a material adverse effect on the Company. The
Company has delivered to Parent complete and correct copies of its
Certificate of Incorporation and By-laws and the articles or certificates
of incorporation, by-laws or other similar organizational and governing
documents of its subsidiaries.
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(b) Subsidiaries. Section 3.1(b) of the Disclosure Schedule lists each
direct or indirect subsidiary of the Company. Each of the Company's
subsidiaries that is not a corporation is duly organized under the laws of
its jurisdiction of organization and has all requisite power and authority
to carry on its business as it is now being conducted, and to own, operate
and lease the assets that it now owns, operates or holds under lease. All
the outstanding shares of capital stock of the Company's subsidiaries that
are corporations have been duly authorized and validly issued and are fully
paid and non-assessable and were not issued in violation of any preemptive
rights or other preferential rights of subscription or purchase of any
person. All of the Company's direct or indirect ownership interests in the
Company's subsidiaries that are not corporations have been duly authorized
and validly issued or vested, were not issued in violation of any
preemptive rights or other preferential rights of subscription or purchase
of any person, are fully paid and, except as set forth in Section 3.1(b) of
the Disclosure Schedule, are non-assessable. Except as set forth in Section
3.1 (c) of the Disclosure Schedule, all such stock and ownership interests
are owned of record and beneficially by the Company or the Company's
subsidiary identified on such schedule as owning such interest, free and
clear of all liens, pledges, security interests, charges, claims and other
encumbrances of any kind or nature ("Liens"). Except as set forth in
Section 3.1(b) of the Disclosure Schedule no person other than the Company
or a subsidiary of the Company holds any equity interest of any kind in a
subsidiary of the Company. Except for the capital stock of its subsidiaries
and except for the ownership interests set forth in Section 3.1 (b) of the
Disclosure Schedule, the Company does not own, directly or indirectly, any
capital stock, equity interest or other ownership interest in any
corporation, partnership, association, joint venture, limited liability
company or other entity.
(c) Capital Structure. The authorized capital stock of the Company
consists of 15,000,000 Shares and 5,000,000 shares of Preferred Stock, $.01
par value ("Preferred Stock"). At the close of business on November 14,
1995, there were no shares of Preferred Stock Outstanding and (i) 1,821,648
Shares were issued and outstanding, (ii) 198,250 Shares were reserved for
issuance pursuant to options granted and currently outstanding under stock
option plans ("Option Plans") set forth in Section 3.1(c) of the Disclosure
Schedule, (iii) 360,137 Shares were reserved for issuance upon exercise of
the Class B Warrants and (iv) 1,004,706 Shares were reserved for issuance
upon conversion of the Subordinated Debenture. Except as set forth above or
as a result of exercises under the Option Plans, Class B Warrants, or
Convertible Debenture outstanding on November 14, 1995, no shares of
capital stock or other equity or voting securities of the Company are
reserved for issuance or are outstanding. All outstanding shares of capital
stock of the Company are, and all such shares issuable upon exercise under
the Option Plans, Class B Warrants and Convertible Debenture will, if and
when issued in accordance with the terms of their respective governing
agreements, be, validly issued, fully paid and nonassessable and not
subject to preemptive rights. No capital stock has been issued by the
Company since September 30, 1995, other than shares of Common Stock issued
under the Option Plans, Class B Warrants and Convertible Debenture, in
accordance with their terms at such date. Except for Option Plan options,
the Class B Warrants, and the Convertible Debenture outstanding as of
September 30, 1995, there were no outstanding or authorized securities,
options, warrants, calls, rights, commitments, preemptive rights,
agreements, arrangements or undertakings of any kind to which the Company
or any of its subsidiaries is a party, or by which any of them is bound,
obligating the Company or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, any shares of capital stock
or other equity or voting securities of the Company or of any of its
subsidiaries or obligating the Company or any of its subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. Neither the
Company nor any of its subsidiaries are parties to, and to the best
knowledge of the Company no other person is party to, any voting trust,
voting agreement, or similar voting agreement or arrangement relating to
any equity security of the Company or any subsidiary.
(d) Authority; Non-contravention. The Company has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to Stockholder
Approval (as defined in Section 3.1(h)). This Agreement has
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been duly and validly executed and delivered by the Company and constitutes
a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent transfer or similar laws
affecting the enforcement of creditors' rights generally and pursuant to
general equitable principles. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to loss of
a material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any of its subsidiaries under, any provision of (i) the
Certificate of Incorporation or By-Laws of the Company or any provision of
the comparable organizational documents of its subsidiaries, (ii) except as
set forth in Section 3.1(d) of the Disclosure Schedule, any loan or credit
agreement, note, bond, mortgage, indenture, lease, municipal contract or
other agreement, instrument, permit, concession, franchise or license
applicable to the Company or any of its subsidiaries or their respective
properties or assets or (iii) subject to governmental filing and other
matters referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation or arbitration award applicable
to the Company or any of its subsidiaries or their respective properties or
assets, other than, in the case of clause (ii), any such conflicts,
violations, defaults, rights or liens, security interests, charges or
encumbrances that individually or in the aggregate would not have a
material adverse effect on the Company and would not materially impair the
ability of the Company to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or agency, domestic or foreign, including local authorities (a
"Governmental Entity"), is required by or with respect to the Company or
any of its subsidiaries in connection with the execution and delivery of
this Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except for (i) the filing of a premerger
notification and report form by the Company under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), (xx) the filing with
the Securities and Exchange Commission (the "SEC") of (A) a proxy or
information statement relating to the Stockholder Approval (such proxy or
information statement as amended or supplemented from time to time, the
"Proxy Statement"), and (B) such reports under Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be
required in connection with this Agreement and the transactions
contemplated hereby, (iii) the filing of the Certificate of Merger with the
Delaware Secretary of State with respect to the Merger as provided in the
DGCL and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business and (iv) such other
consents, approvals, orders, authorizations, registrations, declarations,
filings and notices as are set forth in Section 3.1(d) of the Disclosure
Schedule.
(e) SEC Documents. The Company has timely filed all required reports,
schedules, forms, statements and other documents with the SEC since October
31, 1993 and the Company has delivered or made available to Parent all
reports, schedules, forms, statements and other documents filed with the
SEC since such date (such documents, together with all exhibits and
schedules thereto and documents incorporated by reference therein,
collectively referred to herein as the "SEC Documents"). As of their
respective dates, the SEC Documents as they may have been amended complied
in all material respects with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act, as the case
may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that the foregoing representation and
warranty does not relate to any written information received from Parent or
any of its subsidiaries specifically for inclusion in the SEC Documents).
The consolidated financial statements of the Company included in the SEC
Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto, accurately reflect the books and records of the
Company, have been
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prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments and other
adjustments described therein). All material contracts of the Company and
its subsidiaries had been included in the SEC Documents, except for those
contracts not required to be filed pursuant to the rules and regulations of
the SEC.
(f) Information Supplied. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in (i)
the Registration Statement (as defined in Section 5.1 (b)) will, at the
time the Registration Statement is filed with the SEC, and at any time it
is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (ii) the Proxy Statement will,
at the date the Proxy Statement is first mailed to the Company's
stockholders and at the time of the 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
misleading. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder. For purposes of this Agreement, the parties agree
that the statements made and information in the Registration Statement and
the Proxy Statement (other than information provided by Parent or any
subsidiary of Parent in each case concerning Parent or such subsidiary
expressly for inclusion therein) relating to the Federal income tax
consequences of the transactions contemplated hereby to the holders of
Shares shall be deemed to be supplied by the Company and not by Parent or
Sub.
(g) Absence of Certain Changes or Events. Except as disclosed in the
SEC Documents or in Section 3.1(g) of the Disclosure Schedule, since
December 31, 1994, the Company has conducted its business only in the
ordinary course consistent with past practice, and there has not been (i)
any material adverse change with respect to the Company, (ii) any
declaration, setting aside or payment of any dividend (whether in cash,
stock or property) with respect to any of the Company's capital stock,
(iii) (A) any granting by the Company or any of its subsidiaries to any
executive officer of the Company or any of its subsidiaries of any increase
in compensation, (B) any granting by the Company or any of its subsidiaries
to any such executive officer of any increase in severance or termination
pay, or (C) any entry by the Company or any of its subsidiaries into any
employment, severance or termination agreement with any such executive
officer, (iv) any damage, destruction or loss, whether or not covered by
insurance, that has or could reasonably be expected to have a material
adverse effect on the Company, (v) any change in accounting methods,
principles or practices by the Company materially affecting its assets,
liabilities or business, except insofar as may have been required by a
change in generally accepted accounting principles, (vi) any condition,
event or occurrence which, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the Company or
give rise to a material adverse change with respect to the Company, (vii)
any event which, if it had taken place following the execution of this
Agreement, would not have been permitted by Article 4, or (viii) any
condition, event or occurrence which, individually or in the aggregate,
could reasonably be expected to prevent, hinder or materially delay the
ability of the Company to consummate the transactions contemplated by this
Agreement.
(h) Absence of Super Majority Provision. Except for the approval of
the Merger by the holders of a majority of the outstanding Shares
("Stockholder Approval"), no other stockholder action on the part of the
Company is required for approval of the Merger and the transactions
contemplated hereby. No provision of the Company's Certificate of
Incorporation or By-laws or other governing instruments of its subsidiaries
or the terms of any rights plan or other takeover defense mechanism of the
Company would, directly or indirectly, restrict or impair the ability of
Parent to vote, or otherwise to exercise the rights of a stockholder with
respect to, securities of the Company and its subsidiaries that may be
acquired or
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controlled by Parent or permit any stockholder to acquire securities of the
Company on a basis not available to Parent in the event that Parent were to
acquire securities of the Company.
(i) Brokers. Except for a fee of $450,000 payable to Xxxxxxx & Company
International for the opinion referred to in Section 6.3(g), whose fees are
to be paid by the Company or the Surviving Corporation pursuant to the fee
agreement previously provided to Parent, no broker, investment banker or
other person is entitled to receive from the Company or any of its
subsidiaries any investment banking, brokerage or finder's fees in
connection with this Agreement or the transactions contemplated hereby.
(j) Litigation. Except as disclosed in the SEC Documents, there is no
suit, action, proceeding or investigation pending or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of
its subsidiaries or any of their respective properties or employee benefit
plans or fiduciaries thereof that could reasonably be expected to have a
material adverse effect on the Company or prevent, hinder or materially
delay the ability of the Company to consummate the transactions
contemplated by this Agreement (and the Company is not aware of any basis
for any such suit, action, proceeding or investigation), nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its subsidiaries or
any of their respective properties or employee benefit plans or fiduciaries
thereof having, or which, insofar as reasonably can be foreseen, in the
future could have, any such effect.
(k) Absence of Changes in Benefit Plans. Except as disclosed in
Section 3.1(k) of the Disclosure Schedule, since December 31, 1994, there
has not been any adoption or amendment in any respect by the Company or any
of its subsidiaries of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical
dependent care, cafeteria, employee assistance, scholarship program or
other plan arrangement or understanding (whether or not legally binding)
providing benefits to any current or former employee or director of the
Company or any of its subsidiaries (collectively, "Benefit Plans").
Except as disclosed in Section 3.1(k) of the Disclosure Schedule, there
exist no employment, consulting, severance, termination or indemnification
agreements, arrangements or understandings between the Company or any of
its subsidiaries and any officer, director or employee of the Company or
any of its subsidiaries.
(l) ERISA Compliance.
(i) Section 3.1(l) of the Disclosure Schedule contains a list and
brief description of all "employee pension benefit plans" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") (sometimes referred to herein as "Pension Plans"),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
and all other Benefit Plans maintained, or contributed to, by the
Company or any of its subsidiaries for the benefit of any present or
former directors, officers or employees of the Company or any of its
subsidiaries under common control or affiliated pursuant to Sections
414(b), (c), (m) and (o) of the Code. The Company has delivered to
Parent true, complete and correct copies of (A) each Benefit Plan (or,
in the case of any unwritten Benefit Plans, descriptions thereof), (B)
the most recent two annual reports on Form 5500 filed with the United
States Internal Revenue Service (the "IRS") with respect to each Benefit
Plan, (if any such report was required), (C) the most recent IRS
determination letter and all rulings or determinations requested
subsequent to the date of that letter, (D) the most recent actuarial
report for each Benefit Plan for which an actuarial report is required,
(E) the most recent summary plan description for each Benefit Plan for
which such summary plan description is required and each summary of
material modifications prepared after the last summary plan description,
(F) each trust agreement and group annuity contract relating to any
Benefit Plan and (G) all material correspondence for the last three
years with the IRS or Department of Labor relating to plan
qualification, filing of required forms, or pending, contemplated and
announced plan audits.
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(ii) Except as disclosed in Section 3.1(l) of the Disclosure
Schedule, all Pension Plans which are intended to qualify under Section
401(A) of the Code have been submitted to, and approved as qualifying by
the IRS or the applicable remedial amendments period will not have ended
by the Closing Date. In addition, no facts have occurred which if known
by the IRS, could cause disqualification of those Pension Plans. The
Company has paid all premiums (including any applicable interest,
charges and penalties for late payment) due the Pension Benefit Guaranty
Corporation (the "PBGC") with respect to each Pension Plan for which
premiums are required. No Pension Plan maintained by the Company has
been terminated under circumstances which would result in liability to
the PBGC.
(iii) All Benefit Plans which have been or are sponsored by,
participated in by or contributed to by the Company or any of its
subsidiaries: (A) is in substantial compliance with all reporting and
disclosure requirements of Part 1 of Subtitle B of Title I of ERISA,
including compliance with the timely filing of all financial statements
and reports (B) has had the appropriate Form 5500 filed, timely, for
each year of its existence, (C) has at all times complied with the
bonding requirements of Section 412 of ERISA and (D) has no issue
pending (other than the payment of benefits in the normal course) nor
any issue resolved adversely to the Company or any of its subsidiaries
which may subject the Company or any of its subsidiaries to the payment
of a material penalty, interest, tax or other obligation and (E) can be
unilaterally terminated or amended on no more than ninety (90) days'
notice.
(iv) All voluntary employee benefit associations have been
submitted to and approved as exempt from Federal income tax under
Section 501(c)(9) of the Code by the IRS or the applicable submission
period will not have ended by the Closing Date.
(v) Except as disclosed in Section 3.1(l) of the Disclosure
Schedule, the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement will not give rise to any,
or trigger any, change of control, severance or other similar provision
in any Benefit Plan.
(vi) Neither the Company nor any of its subsidiaries provides
director or employee post-retirement medical or health coverage or
contributes to or maintains any employee welfare benefit plan which
provides for health benefit coverage following termination of employment
except as is required by Section 4980B(f) of the Code or other
applicable statute, nor has it made any representations, agreements,
covenants or commitments to provide that coverage.
(vii) No Pension Plan that the Company or any of its subsidiaries
maintains, or to which the Company or any of its subsidiaries is
obligated to contribute, other than any Pension Plan that is a
"multiemployer plan" (as such term is defined in Section 4001 (a)(3) of
ERISA, collectively, the "Multiemployer Pension Plans"), had, as of the
respective annual valuation date for each such Pension Plan, an
"unfunded benefit liability" (as such term is defined in Section
4001(a)(18) of ERISA), based on actuarial assumptions which have been
furnished to Parent. None of the Pension Plans has an "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA or
Section 412 of the Code), whether or not waived. To the best of the
Company's knowledge, none of the Company, any of its subsidiaries, any
director or officer of the Company or any of its subsidiaries or any of
the Benefit Plans which are subject to ERISA, including the Pension
Plans, or any trusts created thereunder, or any trustee or administrator
thereof, has engaged in a "prohibited transaction" (as such term is
defined in Section 406, 407 or 408 of ERISA or Section 4975 of the Code)
(unless exempt under Section 408 of ERISA or Section 4975 of the Code)
or any other breach of fiduciary responsibility that could subject the
Company, any of its subsidiaries or any director or officer of the
Company or any of its subsidiaries to the tax or penalty on prohibited
transactions imposed by such Section 4975 or to any liability under
Section 502(i) or (1) of ERISA which would have a material adverse
effect on the Company. Neither any of such Benefit Plans nor any of such
trusts have been terminated, nor has there been any "reportable event"
(as that term is defined in Section 4043 of ERISA) with respect to which
the 30-day notice requirement has not been waived and the Company is not
aware of any other reportable events with respect thereto during the
last five
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years. Neither the Company nor any of its subsidiaries has ceased
operations at a facility so as to become subject to the provisions of
Section 4062(e) of ERISA, withdrawn as a substantial employer so as to
become subject to the provisions of Section 4063 of ERISA or ceased
making contributions on or before the Closing Date to a Pension Plan
subject to Section 4064(a) of ERISA to which the Company made
contributions at any time during the six years prior to the Closing
Date. Neither the Company nor any of its subsidiaries has suffered or
otherwise caused a "complete withdrawal" or a "partial withdrawal" (as
such terms are defined in Section 4203 and Section 4205, respectively,
of ERISA) since the effective date of such Sections 4203 and 4205 with
respect to any of the Multiemployer Pension Plans.
(viii) With respect to any Benefit Plan that is an employee welfare
benefit plan, except as disclosed in Section 3.1(l) of the Disclosure
Schedule, (A) no such Benefit Plan is unfunded or funded through a
welfare benefits fund, as such term is defined in Section 419(e) of the
Code, (B) each such Benefit Plan that is a group health plan, as such
term is defined in Section 5000(b)(1) of the Code, complies in all
material respects with the applicable requirements of Section 4980B(f)
of the Code and (C) each such Benefit Plan (including any such Benefit
Plan covering retirees or other former directors or employees) may be
amended or terminated without material liability to the Company or any
of its subsidiaries on or at any time after the consummation of the
Merger.
(m) Taxes. Except as set forth in Section 3.1 (m) of the Disclosure
Schedule, each of the Company and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for Tax (as defined
below) purposes of which the Company or any of its subsidiaries is or has
been a member, has timely filed all Tax Returns (as defined below) required
to be filed by it and has timely paid (or the Company has paid on its
behalf) all Taxes which are due (whether or not shown on a Tax Return).
Each of the Tax Returns filed by the Company or any of its subsidiaries is
accurate and complete in all material respects. The most recent
consolidated financial statements of the Company contained in the SEC
Documents reflect an adequate reserve for all Taxes payable by the Company
and its subsidiaries for all taxable periods and portions thereof through
the date of such financial statements and through the Closing Date whether
or not shown as being due on any Tax Returns. The consummation of the
Merger will not cause the Company to recognize any gain or income,
including, without limitation, recognition of income or gain resulting from
an excess loss account, deferred intercompany transaction or similar
transactions. Except as described in Section 3.1 (m) of the Disclosure
Schedule, no deficiencies for any Taxes have been proposed, asserted or
assessed against the Company or any of its subsidiaries, and no requests
for waivers of the time to assess any such Taxes have been granted or are
pending. None of the Federal income Tax Returns of the Company and its
subsidiaries consolidated in such Tax Returns have been examined by the
IRS. The applicable statute of limitations has run for all taxable years of
the Company ending on or before December 31, 1991, subject to the exception
that future uses of net operating losses may subject previously filed tax
returns to review. Except as set forth in Section 3.1(m) of the Disclosure
Schedule, there are no current examinations of any Tax Return of the
Company or any of its subsidiaries being conducted and there are no
settlements or any prior examinations which could adversely affect any
taxable period for which the statute of limitations has not run. As used
herein, "Tax" or "Taxes" shall mean all taxes of any kind, including,
without limitation, those on or measured by or referred to as income, gross
receipts, sales, use, ad valorem, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, value
added, property or windfall profits taxes, customs, duties or similar fees,
assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts imposed by any
Governmental Entity, domestic or foreign. As used herein, "Tax Return"
shall mean any return, report or statement required to be filed with any
governmental authority with respect to Taxes.
(n) No Excess Parachute Payments. Any amount that could be received
(whether in cash or property or the vesting of property) as a result of any
of the transactions contemplated by this Agreement by any employee, officer
or director of the Company or any of its affiliates who is a "disqualified
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individual" (as such term is defined in Section 280(G)(c) of the Code)
under any employment, severance or termination agreement, other
compensation arrangement or Benefit Plan currently in effect would not be
characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code).
(o) Environmental Matters.
(i) As used in this Section 3.1(o):
(A) "Contaminated Site List" means any list, registry, or other
compilation established by any Governmental Entity of sites that
require or potentially require investigation, removal actions,
remedial actions, or any other response under any Environmental Laws
or treaty covering environmental matters, as the result of the
Release or threatened Release of any Hazardous Materials.
(B) "Environmental Laws" means all laws, rules, regulations,
statutes, ordinances or orders of any Governmental Entity relating to
(1) the control of any potential pollutant or protection of the air,
water or land, (2) solid, gaseous or liquid waste generation,
handling, treatment, storage, disposal or transportation, and (3)
exposure to hazardous, toxic or other substances alleged to be
harmful, and includes without limitation, (x) the terms and
conditions of any license, permit, approval, or other authorization
by any Governmental Entity, and (y) judicial, administrative, or
other regulatory decrees, judgments, and orders of any Governmental
Entity. The term "Environmental Laws" shall include, but not be
limited to, the Clean Air Act, 42 U.S.C. sec. 7401 et seq., the Clean
Water Act, 33 U.S.C. sec. 1251 et seq., the Resource Conservation
Recovery Act ("RCRA"), 42 U.S.C. sec. 6901 et seq., the Superfund
Amendments and Reauthorization Act, 42 U.S.C. sec. 11011 et seq., the
Toxic Substances Control Act, 15 U.S.C. sec. 2601 et seq., the Water
Pollution Control Act, 33 U.S.C. sec. 1251, et seq., the Oil
Pollution Act of 1990, 33 U.S.C. sec. 2701, et. seq., the Safe
Drinking Water Act, 42 U.S.C. sec. 300f et seq., and the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), 42 U.S.C. sec. 9601 et seq., Subtitle B of the Texas
Health and Safety Code, V.T.C.A., Health & Safety Code sec. 361, et
seq., and Subtitle D of the Texas Water Code, V.T.C.A., Water Code
sec. 26, et. seq.
(C) "Environmental Liabilities" shall mean any and all
liabilities, responsibilities, claims, suits, losses, costs
(including remediation, removal, response, abatement, clean-up,
investigative, and/or monitoring costs and any other related costs
and expenses), other causes of action recognized now or at any later
time, damages, settlements, expenses, charges, assessments, liens,
penalties, fines, prejudgment and post-judgment interest, expert
fees, attorney fees and other legal fees (1) pursuant to any
agreement, order, notice, or responsibility, directive (including
directives embodied in Environmental Laws), injunction, judgment, or
similar documents (including settlements), or (2) pursuant to any
claim by a Governmental Entity or other person for personal injury,
property damage, damage to natural resources, remediation, or similar
costs or expenses incurred by such Governmental Entity or person
pursuant to common law or statute.
(D) "Environmental Remediation Costs" means all costs and
expenses of actions or activities to (1) cleanup or remove Hazardous
Materials from the environment, (2) to prevent or minimize the
further movement, leaching, or migration of Hazardous Materials in
the environment, (3) prevent, minimize or mitigate the Release or
threatened Release of Hazardous Materials into the environment, or
injury or damage from such Release, and (4) comply with the
requirements of any Environmental Laws. Environmental Remediation
Costs include, without limitation, costs and expenses payable in
connection with the foregoing for legal, engineering or other
consultant services, for investigation, testing, sampling, and
monitoring, for boring, excavation, and construction, for removal,
modification or replacement of equipment or facilities, for labor and
material, and for proper storage, treatment, and disposal of
Hazardous Materials.
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(E) "Hazardous Materials" means any toxic or hazardous materials
or substances, or solid wastes, including asbestos, buried
contaminants, chemicals, flammable or explosive materials,
radioactive materials, petroleum and petroleum products, and any
other chemical, pollutant, contaminant, substance, product or waste
that is regulated by any Governmental Entity under any Environmental
Law.
(F) "Material" or "Material Adverse Effect" shall mean any
matter, response action, remediation, or other item calling for the
payment or expenditure by the Company or any subsidiary thereof of
funds in excess of $50,000 per occurrence, or $250,000 in the
aggregate.
(G) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping, or disposing into the environment of any Hazardous
Materials.
(ii) Except as disclosed in Section 3.1(o) of the Disclosure
Schedule:
(A) With respect to permits and licenses, (1) all licenses,
permits, consents, or other approvals required under Environmental
Laws that are necessary to the operations of the Company or any of
its subsidiaries have been obtained and are in full force and effect
and the Company is unaware of any basis for revocation or suspension
of any such licenses, permits, consents or other approvals, (2) no
permit will expire before, nor within sixty days after, the Closing
Date, for which an application for extension or renewal has not been
filed, (3) no declaration, environmental impact statement, or other
filing or notice to any Governmental Entity is required under
Environmental Laws as a condition to or in connection with the
transactions contemplated by this Agreement, and (4) no Environmental
Laws impose any obligation upon the Company or any of its
subsidiaries, as a result of any transaction contemplated hereby,
requiring prior notification to any Governmental Entity of the
transfer of any permit, license, consent, or other approval.
(B) No Governmental Entity has given notice to the Company or
any of its subsidiaries of any intent to encumber or place a lien
under any Environmental Laws upon any property owned or operated by
the Company or any of its subsidiaries. No notice or restriction has
been, or is required to be placed in any deed or other public real
property record pursuant to any Environmental Laws with respect to
any properties owned or operated by the Company or any of its
subsidiaries.
(C) Except as would not have a Material Adverse Effect, (1) no
oral or written notification of any Release of any Hazardous
Materials has been given to any Governmental Entity by or on behalf
of the Company or any of its subsidiaries, (2) no property currently
or previously owned or operated by the Company or any of its
subsidiaries (or their respective predecessors with respect to
property owned or operated during or prior to the Company's or the
subsidiary's ownership or operation thereof) is listed on (nor has
the Company or any of its subsidiaries received any notice from any
Governmental Entity that such property is being considered or
proposed for listing on) any Contaminated Site List, (3) no property
currently owned or operated by the Company, nor previously owned or
operated by the Company or any of its subsidiaries (or their
respective predecessors with respect to property owned or operated
during or prior to the Company's or the subsidiary's ownership or
operation thereof) is the subject of any judgment, decree or order of
any Governmental Entity requiring any investigation, removal,
remediation or similar action, or other response under any
Environmental Laws, (4) neither the Company nor any of its
subsidiaries has received any notice that it is liable or
responsible, or potentially liable or responsible, in any respect for
any removal, remedial, or other similar type action under any
Environmental Laws as the result of the Release or threatened Release
of Hazardous Materials at any location and (5) no notice of claim,
complaint, investigation, litigation, or administrative proceeding
has been received or threatened before any Governmental Entity (and
neither the Company nor any of its subsidiaries know of any
threatened claim, complaint, investigation, litigation, or
administrative
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proceeding) in which it is asserted by any Governmental Entity or any
other person that the Company or any of its subsidiaries (x) has
violated or is not in compliance with any Environmental Laws, (y) is
liable for or should be ordered or compelled to undertake any
removal, remediation, or other response action as the result of the
Release or threatened Release of any Hazardous Materials at any
location or (z) is liable for damages (including without limitation,
damages to natural resources), fines, penalties, or other relief as
the result of the violation or noncompliance of any Environmental
Laws or as the result of the Release or threatened Release of any
Hazardous Materials at or from any property currently or previously
owned or operated by the Company or any of its subsidiaries, or at
any other location.
(D) With respect to Environmental Remediation Costs, the Company
has reserved funds for all Material Environmental Remediation Costs
of which it is aware or has notice in connection with which the
Company and any of its subsidiaries reasonably anticipates payment or
accrual.
(E) Except where the failure to have such permits and
authorizations would not have a Material Adverse Effect, all
Hazardous Materials, garbage, refuse, and similar waste materials
have been transported by the Company and each of its subsidiaries
(and their respective predecessors during or prior to the Company's
or the subsidiary's ownership thereof) only to sites which have
proper permits or other authorization from Governmental Entities for
the disposal of such materials. The Company has received no notice
that any site to which Hazardous Materials, garbage, refuse, or
similar waste materials have been transported for disposal by the
Company or any subsidiary (or their respective predecessors during or
prior to the Company's or the subsidiary's ownership thereof) is on
any Contaminated Site List or requires the expenditure of any
Environmental Remediation Costs nor, has been placed on such a list
or the requirement that such costs be incurred been threatened.
(F) Except as would not have a Material Adverse Effect, all
operations of the Company and its subsidiaries, and the properties
owned or operated by the Company or any of its subsidiaries, are in
compliance with all permits and Environmental Laws, including without
limitation compliance with Subtitle D of RCRA and all regulations
promulgated thereunder as if it were in effect on the date hereof.
(G) Except as would not have a Material Adverse Effect, to the
best of the Company's knowledge, no facts or circumstances exist
which could reasonably be expected to result in any Environmental
Liabilities to the Company, or any of the Company's directors,
officers, stockholders or controlling persons, including Parent
following the Merger, which have not been otherwise disclosed herein
or in Section 3.1(o) of the Disclosure Schedule or in the SEC
Documents, with respect to (1) any properties currently or previously
owned or operated by the Company or any subsidiary (or their
respective predecessors with respect to property owned or operated
during or prior to the Company's or the subsidiary's ownership or
operation thereof) thereof, or (2) the current or past business or
operations of the Company or any of its subsidiaries.
(iii) The Company and its subsidiaries do not own, lease or
otherwise operate any disposal sites.
(iv) The Company has previously provided to Parent a schedule which
sets forth to the best knowledge of the Company all disposal sites
(including dumps, landfills and other disposal facilities) utilized by
the Company, any of its subsidiaries or any of their respective
predecessors, which schedule identified (A) the name and address of such
disposal site and (B) the type or types of Hazardous Materials delivered
to such site and the approximate date thereof.
(p) Compliance with Laws. The Company and its subsidiaries hold all
required, necessary or applicable permits, licenses, variances, exemptions,
orders, franchises and approvals of all Governmental Entities to own, lease
and operate all of their properties and assets and to conduct their
business as now
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being conducted, except where the failure to so hold would not have a
material adverse effect on the Company (the "Company Permits"). The Company
and its subsidiaries are in compliance with the terms of the Company
Permits except where the failure to so comply would not have a material
adverse effect on the Company. Neither the Company nor any of its
subsidiaries has violated or failed to comply with any statute, law,
ordinance, regulation, rule, permit or order of any Federal, state or local
government, domestic or foreign, or any Governmental Entity, any
arbitration award or any judgment, decree or order of any court or other
Governmental Entity, applicable to the Company or any of its subsidiaries
or their respective businesses, assets or operations, except for violations
and failures to comply that could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the Company.
(q) Material Contracts and Agreements. The Company has provided or
made available to Parent copies, and has provided a true and correct list
to Parent, of all contracts and agreements with Governmental Entities and
of all other material contracts, agreements, commitments, arrangements,
leases, policies or other instruments to which it or any of its
subsidiaries is a party or by which it or any such subsidiary is bound
("Material Contracts"). Neither the Company nor any of its subsidiaries is,
or has received any notice or has any knowledge that any other party is, in
default in any respect under any such Material Contract, 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, except for those defaults which could
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect with respect to the Company.
(r) Insurance. Section 3.1(r) of the Disclosure Schedule sets forth
all policies of insurance currently in effect relating to the business,
operations, properties or assets of the Company and its subsidiaries.
(s) Title to Properties, etc.
(i) Each of the Company and each of its subsidiaries has good and
indefeasible title to, or valid leasehold interests in, all its
properties and assets except for such as are no longer used or useful in
the conduct of its businesses or as have been disposed of in the
ordinary course of business and except for minor defects in title,
easements, restrictive covenants and similar encumbrances or impediments
that, in the aggregate, do not and will not materially interfere with
its ability to conduct its business as currently conducted or as
reasonably expected to be conducted. All such assets and properties,
other than assets and properties in which the Company or any of the
subsidiaries has leasehold interests, are free and clear of all Liens,
other than those set forth in Section 3.1(s) of the Disclosure Schedule
and except for minor liens, that, in the aggregate, do not and will not
materially interfere with the ability of the Company or any of its
subsidiaries to conduct business as currently conducted or as reasonably
expected to be conducted. The Company has delivered to Parent true and
correct copies of all title insurance policies and surveys in its or one
of its subsidiaries' possession or otherwise available to any of them
covering real property owned by the Company.
(ii) Except as set forth in Section 3.1(s) of the Disclosure
Schedule, each of the Company and each of its subsidiaries has complied
in all material respects with the terms of all leases to which it is a
party and under which it is in occupancy, and all such leases are in
full force and effect. Each of the Company and each of its subsidiaries
enjoys peaceful and undisturbed possession under all such leases.
(t) Intellectual Property. The Company and its subsidiaries own, or
are licensed or otherwise have the right to use, all patents, patent
rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service xxxx rights, copyrights, software rights and
licenses technology, know how, processes and other proprietary intellectual
property rights and computer programs which are material to the condition
(financial or otherwise) or conduct of the business and operations of the
Company and its subsidiaries taken as a whole. To the best of the Company's
knowledge, (i) the use of such patents, patent rights, trademarks,
trademark rights, service marks, service xxxx rights, trade names,
copyrights, technology, know-how, processes and other proprietary
intellectual property rights and computer programs by the Company and its
subsidiaries does not infringe on the rights of any person, subject to
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such claims and infringements as do not, in the aggregate, give rise to any
liability on the part of the Company and its subsidiaries with respect to
any such patents, patent rights, trademarks, trademark rights, service
marks, service xxxx rights, trade names, copyrights, technology, know-how,
processes and other proprietary intellectual property rights and computer
programs. No claims are pending or, to the best of the Company's knowledge,
threatened that the Company or any of its subsidiaries is infringing or
otherwise adversely affecting the rights of any person with regard to any
patent, license, trademark, trade name, service xxxx, copyright or other
intellectual property right.
(u) Labor Matters. Except as set forth in Section 3.1(u) of the
Disclosure Schedule, there are no collective bargaining agreements or other
labor union agreements or understandings to which the Company or any of its
subsidiaries is a party or by which any of them is bound, nor is it or any
of its subsidiaries the subject of any proceeding asserting that it or any
subsidiary has committed an unfair labor practice or seeking to compel it
to bargain with any labor organization as to wages or conditions. Except as
set forth in Section 3.1(u) of the Disclosure Schedule, since October 31,
1993, neither the Company nor any of its subsidiaries has encountered any
labor union organizing activity, or had any actual or threatened employee
strikes, work stoppages, slowdowns or lockouts and no such actions are
threatened at present.
(v) Undisclosed Liabilities. Except as set forth in the SEC
Documents, neither the Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) or which, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the Company;
except those incurred in the ordinary course of business since September
30, 1995, consistent with past operations and not related to the borrowing
of money.
(w) Transactions with Affiliates. Except for compensation and
employee benefit arrangements, or as set forth in Section 3.1(w) of the
Disclosure Schedule, no affiliate, officer or director of the Company has
had or has any interest in any person which has had transactions with the
Company or a subsidiary within the past three years.
SECTION 3.2 Representations and Warranties of Parent and Sub. Parent and
Sub represent and warrant to, and agree with, the Company as follows:
(a) Organization; Standing and Power. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated and has the requisite
corporate power and authority to carry on its business as now being
conducted. Each of Parent and each of its subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed to do
business (individually or in the aggregate) would not have a material
adverse effect on Parent.
(b) Authority; Non-contravention. Each of Parent and Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Parent and Sub and the consummation by Parent and Sub
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Parent and Sub, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer or similar laws affecting the enforcement of creditors' rights
generally and pursuant to general equitable principles. This Agreement has
been duly executed and delivered by Parent and Sub and constitutes a valid
and binding obligation of Parent and Sub, enforceable against Parent and
Sub in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, conflict with,
or result in any violation of, or default (with or without notice or lapse
of time, or both) under, (i) any provision of the Certificate of
Incorporation or By-laws of Sub or the Certificate of Incorporation or By-
laws of Parent, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Parent or Sub or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in
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the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation or arbitration account applicable to Parent
or Sub or their respective properties or assets, other than, in the case of
clause (ii), any such conflicts, violations or defaults that individually
or in the aggregate would not materially impair the ability of Parent and
Sub to perform their respective obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to Parent or
Sub in connection with the execution and delivery of this Agreement by
Parent and Sub or the consummation by Parent and Sub of the transactions
contemplated hereby, except for (i) the filing by Parent of a premerger
notification and report form under the HSR Act, (ii) the filing with the
SEC of such reports under Section 13(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated hereby, (iii) the filing and effectiveness of the Registration
Statement under the Securities Act and (iv) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under the "takeover" or "blue sky" laws of various states.
(c) Authorization for Parent Common Stock. Prior to the Effective
Time of the Merger, Parent shall have taken all necessary action to permit
it to issue the number of Parent Shares required to be issued pursuant to
terms of this Agreement. The Parent Shares issued pursuant to the terms of
this Agreement will, when issued, be validly issued, fully paid and
nonassessable and not subject to preemptive rights. Such Parent Shares
will, when issued, be registered under the Securities Act and the Exchange
Act.
(d) SEC Documents. Parent has timely filed all required reports,
schedules, forms, statements and other documents with the SEC since October
31, 1993 and Parent has delivered or made available to the Company all
reports, schedules, forms, statements and other documents filed by it with
the SEC since such date (such documents, together with all exhibits and
schedules thereto and documents incorporated by reference therein,
collectively referred to herein as the "Parent SEC Documents"). As of their
respective dates, the Parent SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Parent SEC Documents, and none of the Parent
SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements
of Parent included in the Parent SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared
in accordance with generally accepted accounting principles (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of Parent and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and other adjustments
described therein).
(e) Information Supplied. None of the information supplied or to be
supplied by Parent for inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration Statement is
filed with the SEC, and at any time it is amended or supplemented or at the
time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and (ii) the Proxy Statement will, at the date the Proxy
Statement is first mailed to the Company's stockholders and at the time of
the 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 misleading. For purposes of
this Agreement, the parties agree that the statements made and information
in the Registration Statement and the Proxy Statement (other than
information provided by Parent or any subsidiary of Parent in each case
concerning Parent or such subsidiary expressly for inclusion therein)
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relating to the Federal income tax consequences of the transactions
contemplated hereby to the holders of Shares shall be deemed to be supplied
by the Company and not by Parent or Sub.
(f) Litigation. Except as disclosed in the Parent SEC Documents,
there is no suit, action, proceeding or investigation pending or, to the
knowledge of Parent, threatened against or affecting Parent or any of its
subsidiaries that could reasonably be expected to have a material adverse
effect on Parent or prevent, hinder or materially delay the ability of
Parent to consummate the transactions contemplated by this Agreement (and
Parent is not aware of any basis for any such suit, action, proceeding or
investigation), nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against Parent
or any of its subsidiaries having, or which, insofar as reasonably can be
foreseen, in the future could have, any such effect.
(g) Undisclosed Liabilities. Except as set forth in the Parent SEC
Documents and prior to the date of this Agreement, at the date of the most
recent audited financial statements of Parent included in the Parent SEC
Documents, neither Parent nor any of its subsidiaries had, and since such
date neither Parent nor any of such subsidiaries has incurred, any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise), required by generally accepted accounting
principles to be set forth on a financial statement or in the notes thereto
or which, individually or in the aggregate, could reasonably be expected to
have a material adverse effect on Parent.
(h) Brokers. Except for a $250,000 fee to be paid to Xxxxxx Brothers,
Inc. by Parent, no broker, investment banker or other person is entitled to
any broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1 Conduct of Business.
(a) Ordinary Course. During the period from the date of this
Agreement to the Effective Time of the Merger (except as otherwise
specifically required by the terms of this Agreement), the Company shall
and shall cause its subsidiaries to carry on their respective businesses in
the usual, regular and ordinary course in substantially the same manner as
heretofore conducted and, to the extent consistent therewith, use all
reasonable efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and
preserve their relationships with customers, Governmental Entities,
suppliers, insurers, licensors, licensees, distributors and others having
business dealings with them, in each case consistent with past practice, to
the end that their goodwill and ongoing businesses shall be unimpaired to
the fullest extent reasonably possible at the Effective Time of the Merger.
Without limiting the generality of the foregoing, and except as otherwise
expressly set forth in this Agreement, during such period, the Company
shall not, and shall not permit any of its subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than
dividends and distributions by any direct or indirect wholly owned
subsidiary of the Company to the Company or a wholly-owned subsidiary of
the Company, (B) split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock or (C)
purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its subsidiaries or any other securities thereof or
any rights, warrants or options to acquire any such shares or other
securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares
of its capital stock, any other voting securities or any securities
convertible into any such shares; or issue, deliver, sell or grant any
rights, warrants or options to acquire any such shares, voting
securities or convertible securities; or issue, deliver, sell or grant
any stock appreciation rights, phantom stock or similar rights or enter
into
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any agreement to do any of the foregoing, except for the issuance of
Shares upon the exercise of Option Plan options or the Class B Warrants,
or the conversion of the Convertible Debt, all as outstanding on the
date of this Agreement in accordance with their current terms;
(iii) amend its Certificate of Incorporation, By-laws or other
comparable charter or organizational document;
(iv) acquire or agree to acquire (A) by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of,
or by any other manner, any business or any corporation, partnership,
association, joint venture, limited liability company or other entity or
division thereof or (B) any assets that would be material, individually
or in the aggregate, to the Company and its subsidiaries taken as a
whole, except purchases of supplies and inventory in the ordinary course
of business consistent with past practice;
(v) sell, lease, mortgage, pledge, xxxxx x Xxxx on or otherwise
encumber or otherwise dispose of any of its properties or assets, except
sales of inventory in the ordinary course of business consistent with
past practice;
(vi) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities
or warrants or other rights to acquire any debt securities of the
Company or any of its subsidiaries, guarantee any debt securities of
another person, or (B) make any loans, advances or capital contributions
to, or investments in, any other person, other than to the Company or
any direct or indirect wholly owned subsidiary of the Company;
(vii) make or incur any new capital expenditure or expenditures not
set forth in the Company's capital budget for fiscal 1995, or in an
amount in excess of that set forth for any such item in such capital
budgets (a true and correct copy of which budget has been previously
furnished to Parent), except for capital expenditures not in excess of
$50,000 as to any single item and $100,000 in the aggregate;
(viii) make any election relating to Taxes or settle or compromise
any Tax liability;
(ix) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in the SEC
Documents or incurred in the ordinary course of business consistent with
past practice;
(x) waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the Company or
any of its subsidiaries is a party;
(xi) terminate or amend in any material respect any contract or
agreement material to the Company;
(xii) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(xiii) except as expressly permitted by this Agreement, enter into
any new collective bargaining agreement or any successor collective
bargaining agreement to any collective bargaining agreement disclosed in
Section 3.1(u) of the Disclosure Schedule;
(xiv) change any material accounting principle used by it, except
insofar as any such change is required by generally accepted accounting
principles or by the rules and regulations of the SEC;
(xv) settle or compromise any litigation (whether or not commenced
prior to the date of this Agreement) other than settlements or
compromises: (A) of litigation where the amount paid in
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settlement or compromise does not exceed $10,000, or (B) in consultation
and cooperation with Parent, and, with respect to any such settlement,
with the prior written consent of Parent;
(xvi) authorize any of, or commit or agree to take any of, the
foregoing actions; or
(xvii) excluding inventory purchased for resale in the ordinary
course of business, the company will not enter into any contracts or
other material business obligations or commitments in excess of
$100,000, or for a term longer than one year.
(b) Changes in Employment Arrangements. Except as set forth in Section
4.1(b) of the Disclosure Schedule, neither the Company nor any of its
subsidiaries shall (except as may be required in order to give effect to
the requirements of Section 5.6) adopt or amend (except as may be required
by law, rule or regulation) any bonus, profit sharing, compensation, stock
option, pension, retirement, deferred compensation, employment or other
employee benefit plan, agreement, trust, fund or other arrangement
(including any Benefit Plan) for the benefit or welfare of any employee,
director or former director or employee or, other than increases for
individuals (other than officers and directors) in the ordinary course of
business consistent with past practice, increase the compensation or fringe
benefits of any director, employee or former director or employee or pay
any benefit not required by any existing plan, arrangement or agreement by
more than $10,000 for any individual and $50,000 in the aggregate for all
such individuals. The Company will maintain the employment of its chief
executive officer, Xxxxxxx X. Xxxxx and its chief financial officer, Xxxxx
Xxxxxx through the Closing Date.
(c) Severance. Except as reflected in Section 4.1(b) of the Disclosure
Schedule, neither the Company nor any of its subsidiaries shall grant any
new or modified severance or termination arrangement or increase or
accelerate any benefits payable under its severance or termination pay
policies in effect on the date hereof.
SECTION 4.2 Other Actions. The Company shall not, and shall not permit any
of its subsidiaries to, take any action that would, or that could reasonably be
expected to, result in any of the representations and warranties of the Company
set forth in this Agreement that are qualified as to materiality becoming untrue
or inaccurate in any respect or in any of the representations and warranties set
forth in this Agreement that are not so qualified becoming untrue in any
material respect.
SECTION 4.3 Advice of Changes. The Company shall promptly advise Parent
orally and in writing of any change or event having, or which, insofar as can
reasonably be foreseen, could have, a material adverse effect on the Company.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Stockholder Approval; Preparation of Proxy Statement;
Preparation of Registration Statement. (a) The Company shall, as soon as
practicable following the execution and delivery of this Agreement on a date to
be agreed upon between Parent and the Company, which date shall be set taking
into account the status of pending regulatory matters pertaining to the
transactions contemplated hereby, duly call, give notice of, convene and hold
the Stockholders Meeting for the purpose of approving the Merger and the
transactions contemplated thereby. The Company will, through its Board of
Directors, recommend to its stockholders the approval and adoption of the
Merger.
(b) Promptly following the date of this Agreement, the Company and Parent
shall prepare and file with the SEC the Proxy Statement, and Parent shall
prepare and file with the SEC a registration statement on Form S-4 (the
"Registration Statement"), in which the Proxy Statement will be included as a
prospectus. Each of the Company and Parent shall use its reasonable efforts to
have the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing, subject to the setting of the date
for the Stockholders Meeting as provided in Section 5.1(a). The Company will use
its reasonable efforts to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after the Registration
Statement is declared effective under the Securities Act. Parent shall also take
such reasonable
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actions (other than qualifying to do business in any jurisdiction in which it is
not now so qualified) as may be required to be taken under any applicable state
securities laws in connection with the issuance of Parent Shares in the Merger,
and the Company shall furnish all information concerning the Company and the
holders of the Shares and rights to acquire Shares pursuant to the Option Plans
as may be reasonably requested in connection with any such action. The Company
will notify Parent promptly of the receipt of any written or oral comments from
the SEC or its staff and of any request by the SEC or its staff for amendments
or supplements to the Proxy Statement or for additional information and will
supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement or the Merger. Parent will notify the
Company promptly of the receipt of any written or oral comments from the SEC or
its staff and of any request by the SEC or its staff for amendments or
supplements to the Registration Statement or for additional information and will
supply the Company with copies of all correspondence between Parent or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Registration Statement or the Merger.
(c) The Company will cause its transfer agent to make stock transfer
records relating to the Company available to the extent reasonably necessary to
effectuate the intent of this Agreement.
SECTION 5.2 Letter of the Company's Accountants. The Company shall use its
best efforts to cause to be delivered to Parent a letter of Xxxxxx Xxxxxxxx LLP,
the Company's independent public accountants, dated a date within two business
days before the date on which the Registration Statement shall become effective
and addressed to Parent and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement. In connection with the
Company's efforts to obtain such letter, if requested by Xxxxxx Xxxxxxxx LLP,
Parent shall provide a representation letter to Xxxxxx Xxxxxxxx LLP, complying
with Statements on Auditing Standards ("SAS") 72 and 76, if then required.
SECTION 5.3 Letter of Parent's Accountants. Parent shall use its best
efforts to cause to be delivered to the Company a letter of Deloitte & Touche
LLP, Parent's independent public accountants, dated a date within two business
days before the date on which the Registration Statement shall become effective
and addressed to the Company and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement. In connection with Parent's
efforts to obtain such letter, if requested by Deloitte & Touche LLP, the
Company shall provide a representation letter to Deloitte & Touche LLP complying
with SAS 72 and 76, if then required.
SECTION 5.4 Access to Information.
(a) The Company shall, and shall cause each of its subsidiaries, officers,
employees, counsel, financial advisors and other representatives to, afford to
Parent, and to Parent's accountants, counsel, financial advisors and other
representatives, reasonable access during the period from the date hereof to the
Effective Time of the Merger to the Company's and its subsidiaries' respective
officers, employees, representatives, properties, books, contracts, commitments
and records and, during such period, the Company shall, and shall cause each of
its subsidiaries, officers, employees, counsel, financial advisors and other
representatives to, furnish promptly to Parent (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws and (ii)
all other information concerning its business, properties, financial condition,
operations and personnel as such party may from time to time reasonably request.
The Company agrees to advise Parent of all material developments with respect to
the Company, its subsidiaries and their respective assets and liabilities from
the date hereof to the Effective Time of the Merger.
(b) Parent agrees to advise the Company of all material developments with
respect to Parent, its assets and liabilities during the period from the date
hereof to the Effective Time of the Merger.
(c) Except as required by law, each of the Company and Parent shall hold,
and cause its respective directors, officers, employees, accountants, counsel,
financial advisors and representatives and affiliates to hold, any nonpublic
information in confidence. Any investigation by any party of the assets and
business of the other party and its subsidiaries shall not affect any
representations and warranties hereunder.
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(d) The Company agrees to permit members of Parent's audit team to review
and examine the work papers of Xxxxxx Xxxxxxxx LLP with respect to the Company
and its subsidiaries.
(e) The Company shall also promptly notify Parent of any notices from or
investigations of which the Company is aware by Governmental Entities that could
materially affect the Company's business or assets. Parent will promptly notify
the Company of any notices from or investigations by Governmental Entities that
could materially affect the consummation of the Merger. In the event of the
termination of this Agreement, each party promptly will deliver to the other
party (and destroy all electronic data reflecting the same) all documents, work
papers and other material (and any reproductions or extracts thereof and any
notes or summaries thereto) obtained by such party or on its behalf from such
other party or its subsidiaries as a result of this Agreement or in connection
therewith so obtained before or after the execution hereof.
SECTION 5.5 Reasonable Efforts; Notification. (a) Upon the terms and
subject to the conditions set forth in this Agreement, except to the extent
otherwise provided in this Section 5.5, each of the parties agrees to use
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger, and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings (including
filings with Governmental Entities, if any) and the taking of all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the defending
of any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and (iv)
the execution and delivery of any additional instruments (including any required
supplemental indentures) necessary to consummate the transactions contemplated
by this Agreement. In connection with and without limiting the foregoing, the
Company and its Board of Directors shall (i) take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to the Merger, (ii) if any state takeover statute or similar statute
or regulation becomes applicable to the Merger, take all action necessary to
ensure that the Merger may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect of
such statute or regulation on the Merger and (iii) cooperate with Parent and Sub
in the arrangements for refinancing any indebtedness of, or obtaining any
necessary new financing for, the Company and the Surviving Corporation, it being
understood that the failure to obtain any such financing or refinancing shall
not be a basis for terminating this Agreement.
(b) The Company shall give prompt notice to Parent, and Parent or Sub shall
give prompt notice to the Company, of (i) any representation or warranty made by
it contained in this Agreement that is qualified as to materiality becoming
untrue or inaccurate in any respect or any such representation or warranty that
is not so qualified becoming untrue or inaccurate in any material respect or
(ii) the failure by it to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; provided, however, that no such notification shall affect the
representations or warranties or covenants or agreements of the parties or the
conditions to the obligations of the parties hereunder.
(c) (i) The Company and Parent shall file a premerger notification and
report form under the HSR Act with respect to the Merger as promptly as
reasonably possible following execution and delivery of this Agreement. Each of
the parties agrees to use reasonable efforts to promptly respond to any request
for additional information pursuant to Section (e)(1) of the HSR Act. The cost
of such filings shall be borne by Parent.
(ii) The Company will furnish to Parent and Sub copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between the Company, or any of its respective
representatives, on the one hand, and any Governmental Entity, or members of the
staff of such agency or authority, on the other hand, with respect to this
Agreement or the Merger; Parent and Sub will furnish to the
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Company copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between Parent, Sub or any of their
respective representatives, on the one hand, and any governmental agency or
authority, on the other hand, with respect to this Agreement or the Merger.
(iii) At the election of Parent, the Company and Parent shall, at Parent's
expense, use reasonable efforts to defend all litigation under the Federal or
state antitrust laws of the United States which if adversely determined would,
in the reasonable opinion of Parent (based on the advice of outside counsel), be
likely to result in the condition set forth in Section 6.2(g) not being
satisfied, and to appeal any order, judgment or decree, which if not reversed,
would result in such failure. Notwithstanding the foregoing, nothing contained
in this Agreement shall be construed to require Parent, Sub or the Company, or
any of their respective subsidiaries or affiliates, to sell, license, dispose
of, or hold separate, or to operate in any specified manner, any assets or
businesses of Parent, Sub, the Company or the Surviving Corporation (or to
require Parent, Sub, the Company or any of their respective subsidiaries or
affiliates to agree to any of the foregoing). The obligations of each party
under Section 5.5(a) to use reasonable efforts with respect to antitrust matters
shall be limited to compliance with the reporting provisions of the HSR Act and
with its obligations under this Section 5.5(c).
SECTION 5.6 Stock Options. (a) As soon as practicable following the date
of this Agreement, the Board of Directors of the Company (or, if appropriate,
any committee thereof) shall adopt such resolutions or take such other actions
as are required, if any, to adjust the terms of all outstanding employee stock
options to purchase Shares ("Employee Stock Options") heretofore granted, to
provide that each Employee Stock Option outstanding shall at the Effective Time
of the Merger represents the right to purchase the Merger Consideration for each
Share previously purchasable thereunder at a price equal to the price per whole
Share under the Option Plans.
(b) The Company shall use reasonable efforts to obtain all consents of the
holders of the Employee Stock Options as shall be necessary to effectuate the
foregoing.
(c) Except as provided herein or as otherwise agreed to by the parties, the
Stock Plans and any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any subsidiary shall terminate as of the Effective Time of the
Merger, and the Company shall ensure that following the Effective Time of the
Merger no holder of an Employee Stock Option or any participant in any Option
Plan or other Benefit Plan shall have any right thereunder to acquire any
capital stock of the Company or the Surviving Corporation.
SECTION 5.7 Indemnification. Parent and Sub agree that all rights to
indemnification for acts or omissions occurring prior to the Effective Time of
the Merger now existing in favor of the current or former directors or officers
of the Company and its subsidiaries as provided in their respective Certificate
of Incorporation or By-laws, as in effect on the date hereof, shall survive the
Merger.
SECTION 5.8 Fees and Expenses. Except as provided in Article VIII, all
fees and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees
or expenses, whether or not the Merger is consummated, provided, however, that
nothing herein contained shall relieve any party hereto for any liability for
breach of this Agreement.
SECTION 5.9 Public Announcements. Parent and Sub, on the one hand, and
the Company, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation, except
that each party may respond to questions from stockholders and Parent may
respond to inquiries from financial analysts and media representatives in a
manner consistent with its past practice and each party may make such disclosure
as may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange or association without prior
consultation to the extent such consultation is not reasonably practicable. The
parties agree that the initial press release or releases to be issued in
connection with the execution of this Agreement shall be mutually agreed upon
prior to the issuance thereof.
SECTION 5.10 Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to the
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transactions contemplated by this Agreement until the Effective Time of the
Merger, and thereafter, the Surviving Corporation shall give Parent the
opportunity to direct the defense of such litigation and, if Parent so chooses
to direct such litigation, Parent shall give the directors of the Company an
opportunity to participate in such litigation; provided, however, that no
settlement of litigation under which Parent or the Surviving Corporation shall
have any liability shall be agreed to without Parent's consent, which shall not
be unreasonably withheld.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver by each party on or prior to the Closing Date of
the following conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger shall be in effect; provided, however, that
the parties hereto shall, subject to Section 5.5, use reasonable efforts to
have any such injunction, order, restraint or prohibition vacated.
(d) Registration Statement Effectiveness. The Registration Statement
shall be effective under the Securities Act on the Closing Date, and all
post-effective amendments filed shall have been declared effective or shall
have been withdrawn; and no stop-order suspending the effectiveness thereof
shall have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the parties, threatened by the SEC.
(e) Exchange Listing. The Parent Shares to be issued as Merger
Consideration shall have been approved for listing on the New York Stock
Exchange and the Pacific Stock Exchange.
(f) Blue Sky Filings. There shall have been obtained any and all
material permits, approvals and consents of securities or "blue sky"
authorities of any jurisdiction that are necessary so that the consummation
of the Merger and the transactions contemplated thereby will be in
compliance with applicable laws, the failure to comply with which would
have a material adverse effect on Parent or the free transferability of the
Shares (other than Shares of holders who were "affiliates", within the
meaning of Rules 144 and 145(c) under the Securities Act, of the Company or
who are "affiliates" of Parent).
SECTION 6.2 Conditions of Parent and Sub. Subject to waiver by the Parent
and Sub, the obligation of Parent and Sub to consummate the Merger are further
subject to the satisfaction at the Effective Time of the Merger, of the
following conditions:
(a) Compliance. The agreements and covenants of the Company to be
complied with or performed on or before the Closing Date pursuant to the
terms hereof shall have been duly complied with or performed in all
material respects and Parent shall have received a certificate dated the
Closing Date and executed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.
(b) Certifications and Opinion. The Company shall have furnished
Parent with:
(i) a certified copy of a resolution or resolutions duly adopted by
the Board of Directors of the Company approving this Agreement and
consummation of the Merger and the transactions
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contemplated hereby and directing the submission of the Merger to a vote
of the stockholders of the Company;
(ii) a certified copy of a resolution or resolutions duly adopted
by the holders of a majority of the outstanding Shares approving the
Merger and the transactions contemplated hereby;
(iii) a favorable opinion dated the Closing Date, in customary form
and substance, of Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx, counsel for the
Company, dated the Closing Date to the effect that:
(A) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has corporate power to own its properties and assets and to carry
on its business as presently conducted and as described in the Proxy
Statement;
(B) The Company has the requisite corporate power to effect the
Merger as contemplated by this Agreement; the execution and delivery
of this Agreement did not, and the consummation of the Merger will
not, violate any provision of the Company's Articles of Incorporation
or By-Laws; and upon the filing by the Surviving Corporation of the
Articles of Merger, the Merger shall become effective;
(C) Each of the Company's subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation, and has corporate power to own its
properties and assets and to carry on its business as presently
conducted and all of the outstanding capital stock of each subsidiary
is owned of record and, to the best of such counsel's knowledge,
beneficially by the Company and/or another subsidiary, free and clear
of all liens, security interests and other encumbrances; and
(D) The Board of Directors of the Company has taken all action
required by the DGCL and its Articles of Incorporation or its By-Laws
to approve the Merger and to authorize the execution and delivery of
this Agreement and the transactions contemplated thereby; the Board
of Directors and the stockholders of the Company have taken all
action required by the DGCL and its Articles of Incorporation and
By-Laws to authorize the Merger in accordance with the terms of this
Agreement; and this Agreement is a valid and binding Agreement of the
Company enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer or similar laws affecting the enforcement of creditors'
rights generally and pursuant to general equitable principles.
(c) Representations and Warranties True. The representations and
warranties of the Company contained in this Agreement (other than any
representations and warranties made as of a specific date) that are
qualified as to materiality shall be true in all respects and the
representations and warranties of the Company contained in this Agreement
(other than any representations and warranties made as of a specific date)
that are not so qualified shall be true in all material respects, in each
case on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, the
representations and warranties of the Company contained in the Agreement
made as of a specific date shall remain true as of such date, and Parent
shall have received a certificate to that effect dated the Closing Date and
executed on behalf of the Company by the chief executive officer and the
chief financial officer of the Company.
(d) Affiliate Letters. Parent shall have received from the Company a
list of such persons, if any, as counsel for the Company state may be
"affiliates" of the Company, within the meaning of Rules 144 and 145(c)
under the Securities Act, and shall have received from such persons
undertakings in writing to the effect that no disposition will be made by
such persons of any Shares received or to be received pursuant to the
Merger except in compliance with the applicable provisions of the
Securities Act and the rules and regulations thereunder. Parent shall not
be required to maintain the effectiveness of the Registration Statement for
the purpose of resale by stockholders of the Company who may be
"affiliates" pursuant to Rule 145 under the Securities Act and Parent may
require that the certificate for any Parent Shares to be received by such
affiliates as Merger Consideration contain a legend that such Parent Shares
may not be
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transferred except in compliance with such undertaking. Such affiliates
shall also furnish to the Parent a letter that they have no present
intention to dispose of any shares of Parent Stock received by them as
Merger Consideration.
(e) Tax Opinion. Parent shall have received an opinion of Fulbright &
Xxxxxxxx in form and substance satisfactory to Parent, to the effect that,
for federal income tax purposes and conditioned upon certain
representations of managements of the Company and Parent as to certain
customary facts and circumstances regarding the Merger, the Merger will
qualify as a "reorganization" within the meaning of Section 368(a) of the
Code.
(f) Consents, etc. Parent shall have received evidence, in form and
substance reasonably satisfactory to it, that such licenses, permits,
consents, approvals, authorizations, qualifications and orders of
governmental authorities and other third parties as are necessary in
connection with the transactions contemplated hereby have been obtained,
except such licenses, permits, consents, approvals, authorizations,
qualifications and orders which are not, individually or in the aggregate,
material to Parent or the Company or the failure of which to have received
would not (as compared to the situation in which such license, permit,
consent, approval, authorization, qualification or order had been obtained)
materially detract from the aggregate benefits to Parent of the
transactions reasonably contemplated hereby.
(g) No Litigation. There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding (or by any other person
any suit, action or proceeding which has a reasonable likelihood of
success) (i) challenging or seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions contemplated by
this Agreement or seeking to obtain from Parent or any of its subsidiaries
any damages that are material in relation to Parent and its subsidiaries
taken as a whole, (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of their respective subsidiaries of
any material portion of the business or assets of the Company, Parent or
any of their respective subsidiaries, to dispose of or hold separate any
material portion of the business or assets of the Company, Parent or any of
their respective subsidiaries, as a result of the Merger or any of the
other transactions contemplated by this Agreement, (iii) seeking to impose
limitations on the ability of Parent or Sub to acquire or hold, or exercise
full rights of ownership as to any shares of Common Stock of the Surviving
Corporation, including, without limitation, the right to vote the Common
Stock of the Surviving Corporation on all matters properly presented to the
stockholders of the Surviving Corporation or (iv) seeking to prohibit
Parent or any of its subsidiaries from effectively controlling in any
material respect the business or operations of the Company or its
subsidiaries.
(h) Dissenting Stockholders. The holders of not more than 5% of the
outstanding Shares shall have given proper notice of their intent to
exercise appraisal rights to require the purchase of their Shares as
contemplated by Section 2.1(e) (in calculating the foregoing, holders of
Shares who give notice but subsequently waive their rights in accordance
with sec. 262 of the DGCL to require purchase of their Shares, shall not be
included).
(i) Satisfactory Due Diligence. The results of due diligence conducted
by Parent with respect to the Company shall be satisfactory to Parent.
(j) No Material Adverse Change. There shall not have occurred any
material adverse change with respect to the Company since September 14,
1995.
(k) Opinion of Financial Advisor. Company shall have received the
opinion of Xxxxxxx & Company International, prior to the mailing of the
Proxy Statement, to the effect that the terms of the Merger are fair to the
holders of the Company Shares from a financial point of view.
(l) Employment Agreement. An employment agreement between the
Surviving Corporation and Xxxxxxx X. Xxxxx, satisfactory to Parent and
effective on the Closing Date shall have been executed by all parties
thereto.
(m) Non-Competition Agreement. A non-competition agreement with
Xxxxxxx X. Xxxxx, effective on the Closing Date shall have been executed
and delivered requiring that he will not, for a period of
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three (3) years after the Closing Date, conduct any business now being
conducted by Tesoro Petroleum Distributing Company or by the Coastwide
Marine Services, Inc. subsidiary of the Company in the Texas and Louisiana
Gulf Coast, including but not limited to, shore base support services, the
purchase or sale of diesel fuels, oil, lubricants or the brokerage of such
products.
(n) Lender Approval. All lenders to Parent shall have approved the
consummation of the Merger or shall have waived any objection or right to
object with respect thereto.
(o) Termination of Certain Agreements. All employment or consulting
agreements between the Company and Xx. Xxxxxx and Xx. Xxxxxx, respectively,
shall have been terminated effective as of the Closing Date on terms
acceptable to Parent.
SECTION 6.3 Conditions of the Company. Subject to waiver by the Company,
the obligations of the Company to consummate the Merger are further subject to
the satisfaction at the Effective Time of the Merger of the following
conditions:
(a) Compliance. The agreements and covenants of Parent to be complied
with or performed on or before the Closing Date pursuant to the terms
hereof shall have been duly complied with or performed in all material
respects and the Company shall have received a certificate dated the
Closing Date on behalf of Parent by the President, any Vice President or
the Treasurer of Parent to such effect.
(b) Certifications and Opinion. Parent shall have furnished the
Company with:
(i) a certified copy of a resolution or resolutions duly adopted by
the Board of Directors or a duly authorized committee thereof of Parent
approving this Agreement and consummation of the Merger and the
transactions contemplated hereby, including the issuance, listing and
delivery of the Parent Shares pursuant hereto;
(ii) a favorable opinion, dated the Closing Date, in customary form
and substance, of Fulbright & Xxxxxxxx L.L.P., counsel for Parent to the
effect that:
(A) Parent and the Sub are corporations duly organized, validly
existing and in good standing under the laws of the State of Delaware
and have corporate power to own their properties and assets and to
carry on their business as presently conducted and as described in
the Proxy Statement. Sub has the requisite corporate power to merge
with the Company as contemplated by this Agreement and Parent has the
requisite corporate power to carry out its obligations under this
Agreement. The execution and delivery of this Agreement did not, and
the consummation of the Merger will not, violate any provision of
Parent's or Sub's Certificate of Incorporation or By-Laws;
(B) Parent and Sub have taken all action required by the DGCL,
their Certificates of Incorporation or their By-Laws to authorize
such execution and delivery and the transactions contemplated by this
Agreement, including the Merger in accordance with the terms of this
Agreement; and this Agreement is a valid and binding agreement of
Parent and Sub enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer or similar laws affecting the enforcement of creditors'
rights generally or pursuant to general equitable principles; and
(C) The Parent Shares to be issued pursuant to the Merger have
been duly authorized and, when issued and delivered as contemplated
hereby, will have been legally and validly issued and will be fully
paid and non-assessable and no stockholder of Parent will have any
preemptive right of subscription or purchase in respect thereof under
Delaware law or Parent's Certificate of Incorporation or By-laws.
(c) Representations and Warranties True. The representations and
warranties of Parent contained in this Agreement (other than any
representations and warranties made as of a specific date) that are
qualified as to materiality shall be true in all respects and the
representations and warranties of Parent contained in this Agreement (other
than any representations and warranties made as of a specific date)
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that are not so qualified shall be true in all material respects, in each
case on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, except
as contemplated or permitted by this Agreement, and the Company shall have
received a certificate to that effect dated the Closing Date and executed
on behalf of Parent by the President, any Vice President or the Treasurer
of Parent.
(d) Tax Opinion. The Company shall have received an opinion of Xxxxx
Xxxx Xxxxx Constant & Xxxxxxxx in form and substance satisfactory to the
Company, to the effect that for federal income tax purposes and conditioned
upon certain representations of managements of the Company and Parent as to
certain customary facts and circumstances regarding the Merger; (i) the
Merger will qualify as a "reorganization" within the meaning of Section
368(a) of the Code; (ii) no gain or loss will be recognized by the Company
as a result of the Merger; (iii) no realized loss will be recognized by a
stockholder of the Company upon the receipt by them of the Merger
Consideration in exchange for their Shares pursuant to the Merger; (iv) any
realized gain will be recognized by a stockholder of the Company to the
extent of the cash portion of the Merger Consideration received pursuant to
the Merger; (v) the aggregate tax bases of Parent Shares received by the
stockholders of the Company (including any fractional share interests
treated as received) will be the same as the aggregate tax bases of the
Shares surrendered in exchange therefor decreased by the cash portion of
the Merger Consideration and increased by the gain recognized on the
Merger; and (vi) the holding period of Parent Shares received by the
stockholders of the Company (including any fractional share interests
treated as received) will include the period during which the Shares
surrendered in exchange therefor were held, provided the Parent Shares were
held as a capital asset at the Effective Time of the Merger.
(e) Assumption. Parent shall have executed all documents required to
evidence its assumption of the Employee Stock Options, the Class B Warrants
and the Convertible Debt outstanding at the Closing (other than those owned
by the Company, Parent, Sub or any wholly-owned subsidiary of the Company,
Parent or Sub).
(f) No Material Adverse Change. There shall not have occurred any
material adverse change with respect to Parent since September 14, 1995.
(g) Opinion of Financial Advisor. The Company shall have received the
opinion of Xxxxxxx & Company International, immediately prior to the
mailing of the Proxy Statement, to the effect that the Merger Consideration
is fair to the holders of the Shares (other than Parent) from a financial
point of view, a signed copy of which opinion shall have been delivered to
Parent.
(h) Satisfactory Due Diligence. The results of due diligence conducted
by the Company with respect to Parent shall be satisfactory to the Company.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, whether before or after approval of
matters presented in connection with the Merger by the stockholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the stockholders of the Company fail to give any required
approval of the Merger and the transactions contemplated hereby upon a
vote at a duly held meeting of stockholders of the Company or at any
adjournment thereof;
(ii) if any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have issued
an order, decree or ruling or taken any other action
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permanently enjoining, restraining or otherwise prohibiting the Merger
and such order, decree, ruling or other action shall have become final
and nonappealable; or
(iii) if the Merger shall not have been consummated on or before
March 1, 1996 unless the failure to consummate the Merger is the result
of a material breach of this Agreement by the party seeking to terminate
this Agreement;
(iv) by Parent or the Company, as the case may be based upon the
material breach of any representation, warranty, covenant or agreement
contained in the Agreement by the other party; a material adverse change
with respect to the Company or the failure to satisfy all conditions
precedent unless such failure is waived by the party whose performance
is conditioned thereon;
(c) by the Company pursuant to a sale submitted under Article VIII
hereof; or
(d) by the Parent pursuant to Section 8.1(c).
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS
SECTION 8.1 No Solicitation. (a) The Company shall not, nor shall it
permit any of its subsidiaries to, nor shall it authorize or permit any officer,
director or employee of or any investment banker, attorney or other advisor,
agent or representative of the Company or any of its subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage the submission of any takeover
proposal, (ii) enter into any agreement (other than confidentiality and
standstill agreements in accordance with the immediately following proviso) with
respect to any takeover proposal, or (iii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
takeover proposal; provided, however, in the case of this clause (iii), that
prior to the vote of stockholders of the Company for approval of the Merger (and
not thereafter if the Merger is approved thereby) to the extent required by the
fiduciary obligations of the Board of Directors of the Company, determined in
good faith by a majority of the disinterested members thereof based on the
advice of outside counsel, the Company may, in response to an unsolicited
request therefor, furnish information to any person or "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) pursuant to a confidentiality
and standstill agreement reasonably satisfactory to Parent. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding sentence by any officer, director or employee of the Company or
any of its subsidiaries or any investment banker, attorney or other advisor,
agent or representative of the Company, whether or not such person is purporting
to act on behalf of the Company or otherwise, shall be deemed to be a material
breach of this Agreement by the Company. For purposes of this Agreement,
"takeover proposal" means (i) any proposal, other than a proposal by Parent or
any of its affiliates, for a merger or other business combination involving the
Company, (ii) any proposal or offer, other than a proposal or offer by Parent or
any of its affiliates, to acquire from the Company or any of its affiliates in
any manner, directly or indirectly, an equity interest in the Company or any
subsidiary, any voting securities of the Company or any subsidiary or a material
amount of the assets of the Company and its subsidiaries, taken as a whole, or
(iii) any proposal or offer, other than a proposal or offer by Parent or any of
its affiliates, to acquire from the stockholders of the Company by tender offer,
exchange offer or otherwise more than 10% of the outstanding Shares.
(b) Neither the Board of Directors of the Company nor any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Parent or Sub the approval or recommendation by the Board of
Directors of the Company or any such committee of this Agreement or the Merger
or take any action having such effect or (ii) approve or recommend, or propose
to approve or recommend, any takeover proposal. Notwithstanding the foregoing,
in the event the Board of Directors of the Company receives a takeover proposal
that, in the exercise of its fiduciary obligations (as determined in good faith
by a majority of the disinterested members thereof based on the advice of
outside counsel), it determines to be a superior proposal, the Board of
Directors may withdraw or modify its approval or recommendation of this
Agreement or the Merger and may (subject to the following sentence) terminate
this Agreement, in each
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case at any time after the fifth business day following Parent's receipt of
written notice (a "Notice of Superior Proposal") advising Parent that the Board
of Directors has received a takeover proposal which it has determined to be a
superior proposal, specifying the material terms and conditions of such superior
proposal (including the proposed financing for such proposal and a copy of any
documents conveying such proposal) and identifying the person making such
superior proposal. The Company may terminate this Agreement pursuant to the
preceding sentence only if the stockholders of the Company shall not yet have
voted upon the Merger and the Company shall have paid the amounts provided for
in Section 8.2(a). Nothing contained herein shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) prior to the sixth business day following Parent's receipt of a Notice
of Superior Proposal provided that the Company does not withdraw or modify its
position with respect to the Merger or take any action having such effect or
approve or recommend a takeover proposal.
(c) In the event that the Board of Directors of the Company or any
committee thereof shall in full compliance with Sections 8.1(a) and (b), (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Sub, the approval or recommendation by the Board of Directors of the
Company or any such committee of this Agreement or the Merger or take any action
having such effect or (ii) approve or recommend, or propose to approve or
recommend, any takeover proposal, Parent may terminate this Agreement.
(d) For purposes of this Agreement, a "superior proposal" means any bona
fide takeover proposal to acquire, directly or indirectly, all of the Shares
then outstanding or all or substantially all the assets of the Company, and
otherwise on terms which a majority of the disinterested members of the Board of
Directors of the Company determines in its good faith reasonable judgment (based
on the written advice of a financial advisor of nationally recognized
reputation, a copy of which shall be provided to Parent) to be more favorable to
the Company's stockholders than the Merger.
(e) In addition to the obligations of the Company set forth in paragraph
(b), the Company shall promptly advise Parent orally and in writing of any
takeover proposal or any inquiry with respect to or which could lead to any
takeover proposal, the material terms and conditions of such inquiry or takeover
proposal (including the financing for such proposal and a copy of such documents
conveying such proposal), and the identity of the person making any such
takeover proposal or inquiry. The Company will keep Parent fully informed of the
status and details of any such takeover proposal or inquiry.
SECTION 8.2 Expense Reimbursements.
(a) In the event this Agreement is terminated by the failure of the
Company's stockholders to approve the Merger after the Merger Consideration has
been fixed as provided in Section 2.1(c) or in the event that this Agreement is
terminated pursuant to Section 7.1(c) or 7.1(d), the Company shall pay to Parent
the sum of $400,000 as liquidated damages and not as a penalty.
(b) In the event that this Agreement is terminated by the Company or
Parent, other than (i) by reason of failure of the Company's stockholders to
approve the Merger after the Merger Consideration has been fixed as provided in
Section 2.1(c), (ii) as a result of a breach of this Agreement by the Company,
(iii) pursuant to Section 7.1(c) or 7.1(d), (iv) by reason of failure to fix the
Merger Consideration as provided in Section 2.1(c), (v) by reason of Section
7.1(b)(ii) hereof (unless such order or injunction results from an action
brought by stockholders of Parent), or (vi) by reason of Section 7.1(b)(iii)
hereof, Parent shall assume and pay, or reimburse the Company for, all
reasonable fees and expenses incurred by the Company solely with respect to the
issuance of a tax opinion by Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx, compliance
with the HSR Act and the preparation and filing of the combined proxy statement
of the Company and Registration Statement. Such expenses shall include
reasonable fees and reasonable expenses of its counsel and accountants, but only
insofar as they were incurred directly in connection with the above.
Notwithstanding the foregoing, in the event that the parties are unable to fix
the Merger Consideration as provided in Section 2.1 (c) and (i) the Parent is
unwilling to use as a basis for fixing the Merger Consideration the closing
price of Tesoro Common Stock on the second trading day preceding the date on
which the Registration Statement could have been declared effective and (ii)
such price is less than $8.25, Parent shall pay the above fees, but only to the
extent of $75,000.
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(c) Except as set forth in this Section 8.2, neither Parent nor the Company
shall have any obligation or liability to the other as a result of the
termination of this Agreement pursuant to Section 7.1, except that (i) the
provisions of Section 5.4(c), 5.8, 5.9 and 8.2 shall survive termination and
(ii) nothing herein and no termination pursuant to Article VII shall relieve any
party from liability for breach of this Agreement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
by the Company or Parent or Sub pursuant to this Agreement shall survive the
Effective Time of the Merger. This Section 9.1 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time of the Merger.
SECTION 9.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by facsimile
or sent by overnight courier to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Tesoro Petroleum Corporation
0000 Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Attention: Xxxxxxx X. Xxx Xxxxx, Senior Vice President and
Chief Financial Officer
Xxxxx X. Xxxx, Xx., Executive Vice President,
General Counsel and Secretary
with copies (which shall not constitute notice) to:
Fulbright & Xxxxxxxx L.L.P.
Market Square
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
(b) if to the Company, to
Coastwide Energy Services, Inc.
00000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, President
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with a copy (which shall not constitute notice) to:
Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
SECTION 9.3 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by
or is under common control with, such first person;
(b) "material adverse effect" or "material adverse change" means, when
used in connection with any person, any change or effect (or any
development that, insofar as can reasonably be foreseen, could reasonably
be expected to result in any change or effect) that is materially adverse
to the business, properties, assets, condition (financial or otherwise),
results of operations or prospects of that person and its subsidiaries,
taken as a whole;
(c) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization or other entity;
(d) a "subsidiary" of any person means any corporation, partnership,
association, joint venture, limited liability company or other entity in
which such person has an ownership interest.
SECTION 9.4 Interpretation. When a reference is made in this Agreement to
a Section, Exhibit or Schedule, such reference shall be to a Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents 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".
SECTION 9.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 9.6 Entire Agreement: No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) except for the provisions of Section 5.7, is not
intended to confer upon any person other than the parties any rights or remedies
hereunder.
SECTION 9.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 9.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations hereunder. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
SECTION 9.9 Enforcement of the Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
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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 located in the State of Texas or in any other Texas
state court, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto agrees
that it will not bring any action relating to this Agreement in any court other
than a Federal or state court sitting in the Southern District of Texas.
SECTION 9.10 Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
TESORO PETROLEUM CORPORATION
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive
Officer
CNRG ACQUISITION CORP.
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive
Officer
COASTWIDE ENERGY SERVICES, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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