Exhibit 10.9.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AMERICAN ECO CORPORATION
SUB ACQUISITION CORP.
AND
CHEMPOWER, INC.
Dated as of September 10, 1996
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TABLE OF CONTENTS
Section Page
ARTICLE I
THE MERGER
Section 1.01. The Merger . . . . . . . . . . . . . . . 1
Section 1.02. Effective Time . . . . . . . . . . . . . 1
Section 1.03. Effect of the Merger . . . . . . . . . . 1
Section 1.04. Articles of Incorporation; Code of
Regulations . . . . . . . . . . . . . . . 2
Section 1.05. Directors and Officers . . . . . . . . . 2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01. Conversion of Securities; Adjustment . . 2
Section 2.02. Conversion of Sub Common Stock . . . . . 2
Section 2.03. Exchange of Company Certificates and
Cash . . . . . . . . . . . . . . . . . . 3
Section 2.04. Stock Transfer Books . . . . . . . . . . 4
Section 2.05. Company Options . . . . . . . . . . . . . 4
Section 2.06. Dissenting Shares . . . . . . . . . . . . 4
Section 2.07. Closing . . . . . . . . . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01. Organization and Qualification . . . . . 5
Section 3.02. Capitalization . . . . . . . . . . . . . 6
Section 3.03. Subsidiaries . . . . . . . . . . . . . . 6
Section 3.04. Authorization . . . . . . . . . . . . . . 6
Section 3.05. SEC Filings . . . . . . . . . . . . . . . 7
Section 3.06. No Conflicts . . . . . . . . . . . . . . 7
Section 3.07. Consents and Approvals . . . . . . . . . 8
Section 3.08. Financial Statements . . . . . . . . . . 8
Section 3.09. Absence of Certain Changes or Events . . 8
Section 3.10. No Undisclosed Material Liabilities . . . 10
Section 3.11. Proxy Statement . . . . . . . . . . . . . 10
Section 3.12. Fairness Opinion . . . . . . . . . . . . 10
Section 3.13. Brokers and Finders . . . . . . . . . . . 11
Section 3.14. Environmental Matters . . . . . . . . . . 11
Section 3.15. Litigation . . . . . . . . . . . . . . . 11
Section 3.16. ERISA Compliance . . . . . . . . . . . . 12
Section 3.17. Tax Matters . . . . . . . . . . . . . . . 13
Section 3.18. Change in Control Payments . . . . . . . 14
Section 3.19. Properties . . . . . . . . . . . . . . . 14
Section 3.20. Intellectual Property . . . . . . . . . . 14
Section 3.21. Insurance Coverage . . . . . . . . . . . 15
Section 3.22. Inventory . . . . . . . . . . . . . . . . 15
Section 3.23. Related Party Transactions . . . . . . . 15
Section 3.24. Contracts . . . . . . . . . . . . . . . . 16
Section 3.25. Personnel . . . . . . . . . . . . . . . . 17
Section 3.26. Compliance with Laws . . . . . . . . . . 17
Section 3.27. Accounts Receivable . . . . . . . . . . . 18
Section 3.28. Books and Records . . . . . . . . . . . . 18
Section 3.29. Board Recommendation . . . . . . . . . . 18
Section 3.30. General Representation and Warranty . . . 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 4.01. Organization and Power . . . . . . . . . 19
Section 4.02. Authorization . . . . . . . . . . . . . . 19
Section 4.03. No Conflicts . . . . . . . . . . . . . . 19
Section 4.04. Consents and Approvals . . . . . . . . . 19
Section 4.05. Proxy Statement . . . . . . . . . . . . . 20
Section 4.06. Financing . . . . . . . . . . . . . . . . 20
Section 4.07. Brokers and Finders . . . . . . . . . . . 20
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.01. Conduct of Business Between Execution of
this Agreement and the Effective Time . . 20
Section 5.02. Mutual Covenants . . . . . . . . . . . . 22
Section 5.03. Access to Information; Confidentiality . 23
Section 5.04. Meeting of Shareholders . . . . . . . . . 23
Section 5.05. Proxy Statement . . . . . . . . . . . . . 23
Section 5.06. Public or Shareholder Communications . . 24
Section 5.07. Additional Agreements. . . . . . . . . . 24
Section 5.08. Closing Conditions . . . . . . . . . . . 24
Section 5.09. Parent Shareholder Approval . . . . . . . 24
Section 5.10. Director and Officer Liability . . . . . 24
Section 5.11. No Solicitation . . . . . . . . . . . . . 25
Section 5.12. Periodic Reports . . . . . . . . . . . . 26
Section 5.13. Financing . . . . . . . . . . . . . . . . 26
Section 5.14. Xxxx-Xxxxx-Xxxxxx Filing . . . . . . . . 26
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.01. Conditions to Each Party's Obligation to
Effect the Merger . . . . . . . . . . . . 27
Section 6.02. Additional Conditions to the Obligations
of the Company . . . . . . . . . . . . . 28
Section 6.03. Additional Conditions to the Obligations
of Parent and Sub . . . . . . . . . . . . 28
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 7.01. Termination . . . . . . . . . . . . . . . 30
Section 7.02. Effect of Termination and Abandonment . . 32
Section 7.03. Termination Payment . . . . . . . . . . . 32
Section 7.04. Amendment . . . . . . . . . . . . . . . . 32
Section 7.05. Waiver . . . . . . . . . . . . . . . . . 32
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Fees and Expenses . . . . . . . . . . . . 33
Section 8.02. Survival of Representations and
Warranties . . . . . . . . . . . . . . . 33
Section 8.03. Notices . . . . . . . . . . . . . . . . . 33
Section 8.04. Construction . . . . . . . . . . . . . . 34
Section 8.05. Exhibits, Schedules and Annexes . . . . . 34
Section 8.06. Counterparts . . . . . . . . . . . . . . 35
Section 8.07. Governing Law . . . . . . . . . . . . . . 35
Section 8.08. Pronouns . . . . . . . . . . . . . . . . 35
Section 8.09. Time Periods . . . . . . . . . . . . . . 35
Section 8.10. No Third Party Beneficiaries . . . . . . 35
Section 8.11. Enforcement of the Agreement . . . . . . 35
Section 8.12. Waiver of the Jury Trial . . . . . . . . 35
Section 8.13. Entire Agreement . . . . . . . . . . . . 35
Section 8.14. Severability . . . . . . . . . . . . . . 36
Section 8.15. Successors and Assigns . . . . . . . . . 36
LIST OF SCHEDULES AND ANNEXES
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SCHEDULES
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3.01 Jurisdictions in Which Qualified
3.02 Capitalization
3.03 Subsidiaries
3.05 SEC Filings
3.06 No Conflicts
3.07 Consents and Approvals
3.09 Certain Changes or Events
3.14 Environmental Matters
3.15 Litigation
3.16 ERISA Compliance
3.17 Tax Matters
3.18 Change in Control Payments
3.19 Properties
3.20 Intellectual Property Matters
3.21 Insurance Policies
3.23 Certain Transactions
3.24 Contracts
3.25 Personnel
3.26 Permits
3.27 Accounts Receivable
5.01 Conduct of Business between Execution of Agreement and
Effective Time
ANNEXES
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Annex A Form of Opinion of Counsel to Parent and Sub
Annex B Employment Agreement with Xxxxxx X. Xxxx
Annex C Employment Agreement with Xxxxxx X. Rochester
Annex D Form of Opinion of Counsel to the Company
AGREEMENT AND PLAN OF MERGER, dated as of September 10,
1996 ("Agreement"), by and among AMERICAN ECO CORPORATION, an
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Ontario, Canada corporation ("Parent"), SUB ACQUISITION CORP., an
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Ohio corporation and a wholly owned subsidiary of Parent ("Sub"),
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and CHEMPOWER, INC., an Ohio corporation (the "Company").
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WHEREAS, the parties hereto desire to merge Sub with
and into the Company (the "Merger"), whereupon the Company will
become a wholly owned subsidiary of Parent; and
WHEREAS, the Board of Directors of each of Parent, Sub
and the Company deems the Merger to be in the best interests of
each of Parent, Sub, the Company and their respective
shareholders;
NOW, THEREFORE, in consideration of the foregoing and
the respective representations, warranties, covenants and
agreements set forth in this Agreement, the parties hereto agree
as follows:
ARTICLE I
THE MERGER
Section 1.01. The Merger. At the Effective Time (as
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defined in Section 1.02), upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the Ohio General Corporation Law (the "Ohio Act"), Sub shall be
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merged with and into the Company, whereupon the Company will
become a wholly owned subsidiary of Parent. As a result of the
Merger, the separate corporate existence of Sub shall cease and
the Company shall continue as the surviving corporation in the
Merger (the "Surviving Corporation"). The name of the Surviving
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Corporation shall, by virtue of the Merger, remain "Chempower,
Inc."
Section 1.02. Effective Time. As promptly as
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reasonably practicable after the satisfaction or, if permissible
hereunder, waiver of all conditions set forth in Article VI, the
parties hereto shall cause the Merger to be consummated by filing
a certificate of merger (the "Certificate of Merger") with the
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Secretary of State of the State of Ohio, in such form as required
by, and executed in accordance with the relevant provisions of
the Ohio Act (the time of such filing being the "Effective
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Time").
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Section 1.03. Effect of the Merger. At the Effective
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Time, the effect of the Merger shall be as provided in the
applicable provisions of the Ohio Act. Without limiting the
generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all of the
property, rights, privileges, powers and franchises of Sub and
the Company shall vest in the Surviving Corporation, and all of
the debts, liabilities and duties of Sub and the Company shall
become the debts, liabilities and duties of the Surviving
Corporation.
Section 1.04. Articles of Incorporation; Code of
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Regulations. The Articles of Incorporation and Code of
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Regulations of the Company as in effect immediately prior to the
Effective Time shall be the Articles of Incorporation and Code of
Regulations of the Surviving Corporation, unless and until duly
amended, altered or repealed.
Section 1.05. Directors and Officers. The directors
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and officers of Sub immediately prior to the Effective Time shall
become the directors and officers of the Surviving Corporation at
the Effective Time, each to hold office in accordance with the
Articles of Incorporation and Code of Regulations of the
Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01. Conversion of Securities; Adjustment.
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(a) Each share of common stock, $0.10 par value, of
the Company (the "Shares") issued and outstanding immediately
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prior to the Effective Time, other than Shares owned by Parent,
Sub or any other wholly owned subsidiary of Parent or held in the
treasury of the Company, all of which shall be canceled
(collectively, the "Canceled Shares"), and Shares held by
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Dissenting Shareholders (as defined in Section 2.06 hereof)
(collectively, the "Dissenting Shares"), shall, by virtue of the
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Merger and without any action on the part of the holder thereof,
be converted into the right to receive $6.20 net to the holder in
cash (the "Merger Consideration"), payable to the holder thereof,
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without interest thereon, upon the surrender of the certificate
representing such Share.
(b) If between the date of this Agreement and the
Effective Time the outstanding Shares shall have been changed
into a different number of Shares or a different class by reason
of a stock dividend, subdivision, reclassification,
recapitalization, split-up or combination, the Merger
Consideration shall be appropriately adjusted.
Section 2.02. Conversion of Sub Common Stock. Each
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share of common stock, par value $0.10 per share, of Sub issued
and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into and exchangeable for one (1)
share of common stock of the Surviving Corporation and each
certificate evidencing ownership of any shares of capital stock
of Sub shall evidence ownership of the same number of shares of
common stock of the Surviving Corporation.
Section 2.03. Exchange of Company Certificates and
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Cash.
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(a) Deposit of Merger Consideration. As of the
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Effective Time, Parent or Sub shall deposit, or cause to be
deposited, with or for the account of an exchange agent (the
"Exchange Agent") selected by Parent prior to the Effective Time,
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for the benefit of the holders of the Shares (other than Canceled
Shares and Dissenting Shares), for exchange in accordance with
this Article II, through the Exchange Agent, cash in the
aggregate amount required to be exchanged for the Shares (other
than Canceled Shares and Dissenting Shares) pursuant to Section
2.01 (the "Exchange Fund"). The Exchange Agent shall, pursuant
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to irrevocable instructions, deliver the Exchange Fund to holders
of the Shares (other than Canceled Shares and Dissenting Shares)
in accordance with Section 2.01 hereof. The Exchange Fund shall
not be used for any other purpose. Any interest, dividends or
other income earned on the investment of the Exchange Fund while
held by the Exchange Agent shall be for the account of Parent.
(b) Exchange Procedures. As soon as reasonably
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practicable after the Effective Time, Parent will instruct the
Exchange Agent to mail to each holder of record of a certificate
or certificates which immediately prior to the Effective Time
evidenced outstanding Shares (other than Dissenting Shares) (the
"Certificates"), (i) a letter of transmittal (which shall specify
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that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and
have such other provisions as Parent may reasonably specify) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment in cash therefor. Upon
surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, and such
other customary documents as may be required pursuant to such
instructions, the holder of such Certificate shall be entitled to
receive in exchange therefor cash in an amount equal to the
product of the number of Shares represented by such Certificate
multiplied by the Merger Consideration, and the Certificate so
surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares which is not registered in the
transfer records of the Company, cash may be paid in accordance
with this Article II to a transferee if the Certificate
evidencing such Shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such
transfer and by all amounts required to pay applicable stock
transfer taxes or evidence that any applicable stock transfer
taxes have been paid. Until surrendered as contemplated by this
Section 2.03, each Certificate shall represent for all purposes
after the Effective Time only the right to receive upon such
surrender the Merger Consideration in cash multiplied by the
number of Shares evidenced by such Certificate, without any
interest thereon or, in the case of Dissenting Shares, such
consideration as may be determined to be due under the Ohio Act;
and all other rights of such holder as a shareholder of the
Company shall cease at the Effective Time, except as otherwise
required by the Ohio Act.
(c) Termination of Exchange Fund. Any portion of the
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Exchange Fund which remains undistributed to the holders of
Shares for 180 days after the Effective Time shall be delivered
to Parent, upon demand, and any holders of Shares who have not
theretofore complied with this Article II shall thereafter look
only to Parent for payment of their claim for the Merger
Consideration to which they are entitled pursuant to this
Agreement. Neither Parent nor the Company shall be liable to any
holder of the Shares for any cash from the Exchange Fund
delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(d) Withholding Rights. Parent shall be entitled to
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deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of Shares such
amounts as Parent is required to deduct and withhold with respect
to the making of such payment under the Internal Revenue Code of
1986, as amended (the "Code"), or any provision of state, local
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or foreign tax law. To the extent that amounts are so withheld
by Parent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of
the Shares in respect of which such deduction and withholding was
made by Parent.
(e) Lost Certificates. If any Certificate is lost,
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stolen, or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen,
or destroyed and, if required by the Surviving Corporation the
posting by such person of a bond in such reasonable amount as
Parent may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent
will pay the cash payable in respect of such Certificate pursuant
to this Agreement.
Section 2.04. Stock Transfer Books. At the Effective
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Time, the stock transfer books of the Company shall be closed and
there shall be no further registration of transfers of Shares
thereafter on the records of the Company. On or after the
Effective Time, any Certificates presented to the Exchange Agent,
the Surviving Corporation or Parent for any reason, other than
Dissenting Shares presented for endorsement in accordance with
the Ohio Act, shall be canceled and converted into the right to
receive the Merger Consideration in cash multiplied by the number
of Shares evidenced by such Certificate.
Section 2.05. Company Options. At the Effective Time
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(and subject to the effectiveness of the Merger), each option to
purchase Shares, whether or not exercisable, shall be canceled in
consideration of the payment by the Company out of funds provided
by Parent, if necessary, to each holder thereof of an amount in
cash equal to the extent (if any) by which the Merger
Consideration exceeds the exercise price per share payable under
such option, multiplied by the number of Shares subject to such
option. All incentive stock option plans and non-qualified stock
option plans maintained by the Company, and each option issued
under any of such plans, shall be amended, to the extent
necessary, to incorporate the terms of the preceding sentence and
to delete any inconsistent provisions thereof regarding the
treatment of such options as a consequence of the Merger. Parent
shall be entitled to cause the Company to withhold from amounts
otherwise payable pursuant to this Section 2.05 any amount
required to be withheld under applicable tax laws.
Section 2.06. Dissenting Shares. Notwithstanding
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anything in this Agreement to the contrary, any issued and
outstanding Shares held by a person (a "Dissenting Shareholder")
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who objects to the Merger and complies with all the provisions of
the Ohio Act concerning the right of shareholders of the Company
to dissent from the Merger and require the fair cash value of
their Shares shall not be converted as described in Section 2.01
hereof but shall become the right to receive such consideration
as may be determined to be due to such Dissenting Shareholder
pursuant to the Ohio Act. If after the Effective Time, such
Dissenting Shareholder withdraws his demand for the fair cash
value of his Shares or fails to perfect or otherwise loses his
right to the fair cash value of his Shares, in any case pursuant
to the Ohio Act, his Shares shall be deemed to be converted as of
the Effective Time into the right to receive the Merger
Consideration, without interest. The Company shall give Parent
(i) prompt notice of any demands for the fair cash value of
Shares received by the Company and (ii) the opportunity to
participate in and direct all negotiations and proceedings with
respect to any such demands. The Company shall not, without the
prior written consent of Parent, make any payment with respect
to, or settle, offer to settle or otherwise negotiate any such
demands.
Section 2.07. Closing. The closing of the Merger
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will take place at 10:00 a.m. not later than the second business
day after the day on which there shall have been satisfaction or
waiver of the conditions set forth in Article VI, at the offices
of Xxxxxxxx Xxxx & Xxxxx P.L.L., 0000 Xxx Xxxxxx, 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx, unless another date or place is agreed
to in writing by the parties hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub
as follows:
Section 3.01. Organization and Qualification.
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(a) Organization and Power. The Company is a
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corporation duly organized, validly existing and in good standing
under the laws of the State of Ohio. The Company has all
requisite corporate power and authority to carry on its business
as it is now being conducted and to own, lease and operate its
assets.
(b) Qualification. The Company is duly qualified or
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licensed to do business as a foreign corporation in good standing
in every jurisdiction where the character of its properties,
owned or leased, or the nature of its activities make such
qualification necessary, except where the failure to be so
qualified will not have an effect which is material and adverse
to the business, financial condition or results of operations of
the Company and its Subsidiaries (as hereinafter defined) taken
as a whole other than an effect resulting from this Agreement or
the transactions contemplated hereby (a "Company Material Adverse
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Effect"). Each of such jurisdictions is listed in Schedule 3.01
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hereto.
(c) Articles of Incorporation and Code of Regulations.
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The Company has heretofore delivered to Parent complete and
correct copies of the Company's Articles of Incorporation and
Code of Regulations, each as currently in effect.
Section 3.02. Capitalization. The authorized capital
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stock of the Company, together with a description of treasury
securities and a description of all securities issued and
outstanding as of the date hereof is as set forth on Schedule
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3.02 attached hereto. All securities identified on Schedule 3.02
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as being issued and outstanding securities are validly issued,
fully paid and nonassessable. Except as set forth on Schedule
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3.02, there is no outstanding option, warrant, right, call,
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subscription or other agreement or commitment to which the
Company is a party which (a) obligates the Company to sell,
pledge or otherwise dispose of any shares of capital stock of the
Company or any securities convertible or exchangeable into, or
other rights to acquire, any shares of capital stock of the
Company, (b) obligates the Company to make any payments with
respect to appreciation in shares of its capital stock, (c)
obligates the Company to grant, offer or enter into any of the
foregoing, or (d) relates to the voting, transfer or control of
such capital stock, securities or rights. Schedule 3.02 sets
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forth the exercise price of each stock option currently
outstanding.
Section 3.03. Subsidiaries. Each Subsidiary of the
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Company is listed on Schedule 3.03 hereto. Except as set forth
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in Schedule 3.03, each such Subsidiary is a corporation duly
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organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has the corporate power
to carry on its business substantially as it is now being
conducted. Each Subsidiary is duly qualified as a foreign
corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or
leased or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified will not
have a Company Material Adverse Effect. All of the outstanding
shares of capital stock of each Subsidiary are validly issued,
fully paid and nonassessable and owned directly or indirectly by
the Company free and clear of all liens, claims or encumbrances
and were not issued in violation of any preemptive right. There
are no existing options, calls or commitments of any character
relating to the issued or unissued capital stock of any
Subsidiary, or any securities convertible into, or exchangeable
or exercisable for, or otherwise evidencing the right to acquire,
any shares of capital stock of any Subsidiary. For purposes of
this Agreement, the term "Subsidiary" of the Company shall mean
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any corporation, limited partnership or other entity a majority
of whose outstanding voting stock or ownership interests entitled
to vote for the election of directors or other governing body is
at the time owned by the Company and/or one or more other
Subsidiaries. Except for the Subsidiaries listed on Schedule
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3.03 hereto, the Company does not have any direct or indirect
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record or beneficial ownership, voting or management interest in
any corporation, limited partnership or other entity.
Section 3.04. Authorization. The Company has all
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requisite corporate power to enter into this Agreement, and all
other documents and instruments to be executed and delivered by
it in connection herewith, and to carry out its obligations
hereunder and thereunder. Except with respect to the approval by
the shareholders of the Company of this Agreement and the Merger
(a) the execution and delivery of this Agreement and the due
consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action on the part of the Company and (b) this
Agreement constitutes (and each document and instrument
contemplated by this Agreement, when executed and delivered in
accordance with the provisions hereof, will constitute) a valid
and legally binding agreement of the Company enforceable in
accordance with its terms assuming the due authorization,
execution and delivery hereof by Parent, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, or other similar laws affecting the rights of
creditors generally, general principles of equity, and public
policy. The affirmative vote of the holders of a majority of the
Shares is the only vote of any class or series of capital stock
of the Company necessary to approve the Merger.
Section 3.05. SEC Filings.
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(a) Except as set forth on Schedule 3.05 attached
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hereto, the Company has filed with the Securities and Exchange
Commission (the "SEC") all required reports, schedules, forms,
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statements and other documents from January 1, 1993 through the
date hereof, including (i) the annual reports on Form 10-K for
all fiscal years ended during such period, (ii) the quarterly
reports on Form 10-Q required for all fiscal quarters during such
period, (iii) all proxy or information statements relating to
meetings of, or actions taken without a meeting by, the
shareholders of the Company held during such period, and (iv) all
other reports, statements, schedules and registration statements
required to be filed with the SEC during such period (the "SEC
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Documents") except where the failure to file any such SEC
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Document referred to in Subparagraph 3.05(a)(iv) is not likely to
have, individually or in the aggregate, a Company Material
Adverse Effect.
(b) As of its filing date or, if amended, as of the
date of its amendment, as the case may be, each such report,
proxy or information statement (as amended or supplemented, if
applicable), filed pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), did not contain any
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untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement (as amended or
supplemented, if applicable) filed pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), on the date such
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statement, amendment or supplement became effective did not
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.
Section 3.06. No Conflicts. Except as set forth on
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Schedule 3.06 attached hereto, the execution, delivery and
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performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby:
(a) will not constitute a conflict with, breach or
violation of or default (or an event which with notice or lapse
of time or both would become a default) under: (i) the Company's
Articles of Incorporation or Code of Regulations, as amended to
date, (ii) any material agreement, instrument, license, franchise
or permit to which the Company or any of its Subsidiaries is
subject or by which any of them is bound, (iii) any order, writ,
injunction or decree to which the Company or any of its
Subsidiaries are subject or by which any of them is bound, or
(iv) assuming that the consents and approvals referenced in
Section 3.07 hereof are obtained, any statute, law, rule or
regulation to which the Company or any of its Subsidiaries is
subject or by which any of them is bound, the violation of which
would have a Company Material Adverse Effect; and
(b) will not result in the creation of any lien,
charge or encumbrance on the properties or assets of the Company,
except those created or imposed by or through Parent or Sub and
except for such liens, charges, or encumbrances which would not
have a Company Material Adverse Effect.
Section 3.07. Consents and Approvals. Except: (a) for
----------------------
filings and approvals required by: (i) the Secretary of State of
the State of Ohio, (ii) the Exchange Act, (iii) the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
regulations promulgated thereunder (the "Xxxx-Xxxxx-Xxxxxx Act"),
---------------------
and (iv) such other statutes, rules or regulations which may
require registrations, authorizations, consents or approvals
relating to matters that, in the aggregate, are not material to
the Company and its Subsidiaries taken as a whole; (b) for the
approval by the shareholders of the Company of this Agreement and
the transactions contemplated hereby; and (c) as set forth on
Schedule 3.07 attached hereto, neither the Company nor any of its
-------------
Subsidiaries is required to submit any notice, report or other
filing with or obtain any consent or approval from any
governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity") or third party in connection with the
-------------------
execution and delivery by the Company of this Agreement or the
consummation of the transactions contemplated hereby. The
consents set forth on Schedule 3.07 that are marked with an
asterisk (*) are referred to herein as the "Material Consents."
Section 3.08. Financial Statements. The consolidated
--------------------
financial statements of the Company included in the annual
reports on Form 10-K filed by the Company with respect to the
three most recently completed fiscal years of the Company and the
quarterly reports on Form 10-Q filed by the Company with the SEC
with respect to the quarters ended March 31 and June 30, 1996,
comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with
generally accepted accounting principles, consistently applied
(except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Form 10-Q of the
SEC), and fairly present (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which are
anticipated to have a Company Material Adverse Effect) the
financial position, results of operations, shareholders' equity
and cash flow of the Company and its Subsidiaries as at the dates
and for the periods indicated.
Section 3.09. Absence of Certain Changes or Events.
------------------------------------
Except as set forth on Schedule 3.09 attached hereto, since
-------------
January 1, 1996, there has been no Company Material Adverse
Effect (whether or not covered by insurance), and there has not
been:
(a) any event, occurrence or development of a state of
circumstances or facts which has had or reasonably could be
expected to have a Company Material Adverse Effect;
(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of
capital stock of the Company or any Subsidiary or any repurchase,
redemption or other acquisition by the Company or any Subsidiary
of any outstanding shares of capital stock or other securities
of, or other ownership interests in, the Company or any
Subsidiary;
(c) any amendment of any material term of any
outstanding security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the
Company or any Subsidiary of any indebtedness for borrowed money
other than in the ordinary course of business and in amounts and
on terms consistent with past practices, but in no event in the
amount of more than $100,000 in the aggregate;
(e) any creation or assumption by the Company or any
Subsidiary of any lien, pledge, mortgage or other restriction on
any material asset other than in the ordinary course of business
consistent with past practices, but in no event in respect of any
obligation of more than $100,000 in the aggregate;
(f) any making of any loan, advance or capital
contributions to, or investment in any person other than
investments in cash equivalents made by the Company or any
Subsidiary except those made in the ordinary course of business
consistent with past practices;
(g) any transaction or commitment made, or any
contract or agreement entered into, by the Company or any
Subsidiary relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment
by the Company or any Subsidiary of any contract or other right,
in either case, involving an amount in excess of $100,000 other
than transactions and commitments in the ordinary course of
business consistent with past practice and those contemplated by
this Agreement;
(h) any forgiveness or cancellation of any debt or
claim, or any waiver of any right, in either case, involving an
amount in excess of $100,000;
(i) any change in any method of accounting or
accounting practice by the Company or any Subsidiary, except for
any such change required by reason of a concurrent change in
generally accepted accounting principles;
(j) any (i) grant of any severance or termination pay
to any director, officer or employee of the Company or any
Subsidiary, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any
such existing agreement) with any director, officer or employee
of the Company or any Subsidiary, (iii) increase in benefits
payable under any existing severance or termination pay policies
or employment agreements of the Company or any Subsidiary,
(iv) adoption or implementation of an employee benefit plan or
any amendment modification or termination of any plan in effect
at December 31, 1995, or (v) increase in compensation, bonus or
other benefits payable to directors, officers or employees of the
Company or any Subsidiary, other than in the ordinary course of
business consistent with past practice; or
(k) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company
or any Subsidiary, which employees were not subject to a
collective bargaining agreement at December 31, 1995, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof
by or with respect to such employees.
Section 3.10. No Undisclosed Material Liabilities.
-----------------------------------
There are no liabilities of the Company or its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than:
(a) liabilities disclosed in the Company's Form 10-Q for the
fiscal quarter ended June 30, 1996 (the "June 1996 Form 10-Q")
included in the SEC Documents; and (b) liabilities incurred in
the ordinary course of business consistent with past practice
since June 30, 1996, which individually or in the aggregate,
would not have a Company Material Adverse Effect.
Section 3.11. Proxy Statement. None of the
---------------
information to be supplied by the Company or any of its
accountants, counsel or other authorized representatives for
inclusion in the Proxy Statement (as defined in Section 5.05
hereof) to be distributed in connection with the Shareholders
Meeting (as defined in Section 5.04 hereof) will, at the time of
the mailing of the Proxy Statement and any amendments or
supplements thereto, contain any untrue statement of 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 are made, not misleading, or, at the time of the
Shareholders Meeting, omit to state any material fact necessary
to correct any statement that has become false or misleading, it
being understood and agreed that no representation or warranty is
made by the Company with respect to any information supplied by
Parent or Sub or their accountants, counsel or other authorized
representatives. If at any time prior to the Effective Time any
event with respect to the Company, its officers and directors or
any of its subsidiaries shall occur which is or should be
described in an amendment of, or a supplement to, the Proxy
Statement, such event shall be so described and the presentation
in such amendment or supplement of such information will not
contain any statement which, at the time and in light of the
circumstances under which it is made, is false or misleading in
any material respect or omits 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 were
made, not false or misleading. The Proxy Statement will comply
as to form in all material respects with all applicable laws,
including the provisions of the Exchange Act and the rules and
regulations promulgated thereunder.
Section 3.12. Fairness Opinion. The Company has
----------------
received the written opinion of XxXxxxxx & Company Securities,
Inc., financial advisor to the Company, that, as of the date of
the opinion, the Merger Consideration to be received by the
holders of Shares is fair, from a financial point of view, to
such holders, and such opinion has not been withdrawn as of the
date hereof. The Company has delivered a copy of such opinion to
Parent.
Section 3.13. Brokers and Finders. No broker, finder
-------------------
or investment banker is entitled to any brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf
of the Company.
Section 3.14. Environmental Matters. The operations
---------------------
of the Company and its Subsidiaries, including the
transportation, treatment, storage, handling, transfer,
disposition, recycling or receipt of materials are, and, to the
knowledge of the Company, at all times in the past have been, in
compliance with all applicable legal requirements, laws, rules,
orders and regulations related to environmental, natural
resource, health or safety matters ("Environmental Laws"),
including but not limited to those promulgated, adopted or
enforced by the United States Environmental Protection Agency and
by similar agencies in states in which the Company or its
Subsidiaries conduct their business. Except as set forth on
Schedule 3.14 attached hereto, neither the Company nor any of its
-------------
Subsidiaries is a party to any suit, action, claim or proceeding
now pending before any court, governmental agency or board or
other forum or, to the knowledge of the Company, threatened by
any person which (i) alleges noncompliance with any Environmental
Law, (ii) relates to the discharge or release into the
environment of any hazardous material, pollutant, or waste at or
on a site presently or formerly owned, leased or operated by the
Company or any Subsidiary, or (iii) involves the transportation,
treatment, storage, handling, transfer, disposition, recycling or
receipt of hazardous materials. There are no facts or
circumstances, to the actual knowledge of the officers of the
Company or any Subsidiary of the Company, upon which such a suit,
action, claim or proceeding reasonably could be based.
Section 3.15. Litigation. Except as set forth in the
----------
SEC Documents or as set forth on Schedule 3.15 attached hereto,
-------------
there is no suit, action, claim, arbitration, governmental
investigation or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of its
Subsidiaries, or any of their respective officers or directors in
their capacity as such, or any of their respective properties or
businesses, which, if adversely determined, individually or in
the aggregate with other such suits, actions, claims,
arbitrations, governmental investigations or proceedings, would
(i) have a Company Material Adverse Effect, (ii) materially and
adversely affect the Company's ability to perform its obligations
under this Agreement, or (iii) prevent the consummation of any of
the transactions contemplated by this Agreement. The Company has
provided to Parent all pleadings and discovery materials
possessed by the Company or its counsel regarding the facts and
circumstances that are the subject of the litigation and claims
listed on Schedule 3.15 (the "Company Litigation"). Neither the
------------- ------------------
Company nor any of its Subsidiaries is subject to any order,
judgment, decree, infraction, stipulation or consent order of any
court or Governmental Entity, other than orders of general
applicability.
Section 3.16. ERISA Compliance.
----------------
(a) The Company has delivered to Parent correct and
complete copies of all "employee benefit plans" (as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), and all other bonus, deferred
-----
compensation, pension, profit-sharing, retirement, medical, group
life, disability income, stock purchase, stock option, incentive
or other employee-related plans, programs, contracts, agreements
and arrangements (sometimes referred to herein collectively as
"Benefit Plans") currently maintained, or contributed to, or
-------------
required to be maintained or contributed to, by the Company or
any other person or entity that, together with the Company, is
treated as a single employer under Sections 414(b), (c), (m) or
(o) of the Code (each a "Commonly Controlled Entity") for the
--------------------------
benefit of any current or former employees, officers or directors
of the Company or any Subsidiary. Except as disclosed on
Schedule 3.16 attached hereto, the Company also has delivered to
-------------
Parent complete and correct copies of (x) the most recent annual
report on Form 5500 filed with the Internal Revenue Service with
respect to each Benefit Plan (if any such report was required)
including all schedules thereto, (y) the most recent summary plan
description for each Benefit Plan for which such summary plan
description is required and (z) each currently effective trust
agreement and group annuity contract relating to any Benefit
Plan. Except as disclosed on Schedule 3.16 attached hereto, the
-------------
Company has no obligation or liability with respect to any
employee benefit plan (as defined under Section 3(3) of ERISA) or
any other bonus, deferred compensation, pension, profit sharing,
retirement, medical, group life, disability income, stock
purchase, stock option, incentive or other employee related
plans, programs, contracts, agreements or arrangements, other
than such Benefit Plans currently maintained, contributed to or
required to be maintained or contributed to by the Company or any
Company Controlled Entity.
(b) Each Benefit Plan has been administered in
accordance with its terms in all material respects except where
the failure to do so either singly or in the aggregate would not
have a Company Material Adverse Effect. Except as disclosed on
Schedule 3.16 attached hereto, the Company and each Benefit Plan
-------------
are in compliance with applicable provisions of ERISA and the
Code, except for any noncompliance that singly or in the
aggregate would not have a Company Material Adverse Effect.
Except as provided in Section 2.05 or pursuant to the plans or
agreements disclosed on Schedule 3.18 attached hereto, the
-------------
consummation of the transactions contemplated herein will not
directly or indirectly cause the payment, or the acceleration of
any payment, under any Benefit Plan of any amount to any person.
(c) All Benefit Plans intended to be qualified under
Section 401(a) of the Code have been the subjects of
determination letters from the Internal Revenue Service to the
effect that such Benefit Plans are qualified and exempt from
Federal income taxes under Section 401(a) and 501(a),
respectively, of the Code and no such determination letter has
been revoked nor, to the knowledge of the Company, has revocation
been threatened. Except as set forth on Schedule 3.16 attached
-------------
hereto, no such Benefit Plan has been amended since the date of
its most recent determination letter or application therefor in
any respect that, to the knowledge of the Company, would have a
Company Material Adverse Effect.
(d) Except as disclosed on Schedule 3.16, neither the
-------------
Company nor any Commonly Controlled Entity maintains, contributes
to, or at any time maintained, contributed to or was obligated to
contribute to, any Benefit Plan which is subject to Title IV of
ERISA or Section 412 of the Code.
(e) None of the Company, any Subsidiary, any officer
of the Company, or any Subsidiary or any other person or persons,
has engaged in a non-exempt "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975 of the
Code) or any other breach of fiduciary responsibility that could
subject the Company or any officer of the Company to direct or
indirect tax, penalty or liability under ERISA, the Code or other
applicable law which would have a Company Material Adverse
Effect.
(f) With respect to any Benefit Plan that is an
employee welfare benefit plan, (x) no such Benefit Plan is funded
through a "welfare benefit fund", as such term is defined in
Section 419(a) of the Code, and (y) 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
Part 6 of Title I of ERISA except where the failure to do so
would not individually or in the aggregate have a Company
Material Adverse Effect.
Section 3.17. Tax Matters.
-----------
(a) The Company, and if applicable each Subsidiary,
has filed all Federal income tax returns and all other tax
returns and reports required to be filed by them. All such
returns are complete and correct in all material respects and
were timely filed. The Company, and if applicable each
Subsidiary, has paid or has made provisions for payment for all
taxes and all material taxes for which no return was required to
be filed, the nonpayment of which would have a Company Material
Adverse Effect, and the most recent consolidated financial
statements of the Company contained in the SEC Reports reflect an
adequate reserve for all taxes payable for all taxable periods
and portions thereof through the date of such financial
statements, except where the failure to maintain such reserve
would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(b) Except as set forth on Schedule 3.17 attached
-------------
hereto, no audits concerning taxes of the Company and, if
applicable, any Subsidiary are currently being conducted and no
notice regarding commencement of such an audit has been received.
(c) Except as set forth on Schedule 3.17 attached
-------------
hereto, no proposed or assessed deficiencies for any taxes are
currently pending against the Company, or if applicable any
Subsidiary, and no requests for waivers of the time to assess any
such taxes are pending, in either case which, individually or in
the aggregate, would have a Company Material Adverse Effect.
(d) Except as set forth in Schedule 3.17, the Company
-------------
is not aware of any basis for the assertion of any deficiency
against the Company or, if applicable, any Subsidiaries for taxes
which, if adversely determined, either individually or in the
aggregate, would have a Company Material Adverse Effect with
respect to the tax return of the Company and its Subsidiaries for
the taxable years as to which the statute of limitations has not
expired.
(e) As used in this Agreement, "taxes" shall include
-----
all Federal, state, local and foreign income, property, sales,
excise, employment, payroll, custom duty and any other
governmental fee or assessment, and penalties, in addition to any
liability to a third party for such amounts, and interest of any
nature whatsoever.
Section 3.18. Change in Control Payments. Except as
--------------------------
set forth on Schedule 3.18 attached hereto, neither the Company
-------------
nor its Subsidiaries have any plans or agreements to which they
are parties, or to which they are bound, pursuant to which
payments or acceleration of benefits may be required upon a
"change of control" of the Company.
Section 3.19. Properties. Set forth on Schedule 3.19
---------- -------------
attached hereto is a correct and complete list of all real
property and all personal property of the Company and its
Subsidiaries (other than inventory) having a book value exceeding
$10,000. Except as set forth on Schedule 3.19 attached hereto,
-------------
the Company and its Subsidiaries have good and marketable title
to, and are the lawful owners of, all of the tangible and
intangible assets, properties and rights used in connection with
their respective businesses and individually or in the aggregate
material in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, including such tangible assets
and properties reflected in the consolidated balance sheet
included in the June 1996 Form 10-Q (the "June 1996 Balance
Sheet") (other than leased assets and assets disposed of in the
ordinary course of business since such date). Schedule 3.19 sets
-------------
forth a correct and complete list of all material leased assets.
Except as otherwise identified in Schedule 3.19, the material
-------------
tangible assets of the Company and its Subsidiaries taken as a
whole, are in all material respects in good condition and repair,
reasonable wear and tear excepted, and have been well maintained.
Section 3.20. Intellectual Property. Set forth on
---------------------
Schedule 3.20 attached hereto is a correct and complete list of
-------------
each patent, trademark, tradename, service xxxx, copyright and
other trade secret or proprietary intellectual property, whether
registered or unregistered (collectively, the "Intellectual
------------
Property"), owned or used by the Company and its Subsidiaries,
--------
and to the knowledge of the Company, the Company and each
Subsidiary has exclusive ownership of or rights to use such
Intellectual Property. To the knowledge of the Company, the
current use by the Company and each Subsidiary of such
Intellectual Property does not infringe the rights of any other
person. Except set forth on Schedule 3.20 attached hereto, to
-------------
the knowledge of the Company, no other person is infringing the
rights of the Company or any Subsidiary in any such Intellectual
Property, except for any such infringements, that do not,
individually or in the aggregate, have a Company Material Adverse
Effect.
Section 3.21. Insurance Coverage.
------------------
(a) Set forth on Schedule 3.21 attached hereto is a
-------------
correct and complete list of all insurance policies currently
owned by the Company (the "Company Insurance Policies"), setting
--------------------------
forth, for each such policy, the policy number, the date of
inception of the policy and the period of coverage, the insurer,
and a general description of the risks insured against under such
policy. The Company has heretofore delivered to Parent a correct
and complete copy of each of the Company Insurance Policies,
including all endorsements, amendments or supplements thereto.
Each of the Company Insurance Policies has been validly obtained,
all premiums required to be paid with respect thereto have been
paid in full, and each of the Company Insurance Policies is in
full force and effect. The Company Insurance Policies are in
amounts and coverage sufficient for compliance by the Company
with all requirements of law and all agreements to which the
Company and any of its Subsidiaries is a party, and customary in
its industry.
(b) Set forth on Schedule 3.21 attached hereto is a
-------------
correct and complete list of each and every claim made since
January 1, 1995 with respect to the Company Insurance Policies
where the amount of damage or potential liability exceeded
$10,000. The Company has given due and timely notice of any
claim and of any occurrence known to it which may be covered by
any such policies. To the Company's knowledge, no insurance
company has disclaimed coverage as to any claim made by the
Company.
Section 3.22. Inventory.
---------
(a) The values at which all inventories are carried on
the books of the Company and its Subsidiaries (copies of which
books previously have been provided by the Company to Parent),
including without limitation the reserves with respect thereto,
have been calculated in accordance with generally accepted
accounting principles consistent with past practices.
(b) Consistent with past practices, taking into
account the reserves for inventory, the inventories reflected on
the books of the Company and its Subsidiaries are: (i) in all
material respects in good and merchantable condition; (ii)
generally usable for the purposes for which they are intended, or
salable in the ordinary course of business; and (iii) not
excessive in material respects in kind or amount in the context
of the Company's business taken as a whole. The inventories
reflected on the books of the Company and its Subsidiaries
include any and all inventory held on consignment by third
parties.
Section 3.23. Related Party Transactions. Except as
--------------------------
set forth in the SEC Documents or as set forth on Schedule 3.23
-------------
attached hereto, none of the officers, directors or principal
shareholders of the Company or any of its Subsidiaries is
presently a party to any transaction with the Company or any of
its Subsidiaries (other than for services as employees, officers
and directors), including without limitation any contract,
agreement or other arrangement (i) providing for the furnishing
of services to or by, (ii) providing for rental of real or
personal property to or from, or (iii) otherwise requiring
payments to or from, any officer or director, any member of the
family of any officer or director or any corporation,
partnership, trust or other entity in which any officer or
director has a substantial interest or is an officer, director,
trustee or partner. All related party transactions described in
the SEC Documents or on Schedule 3.23 were on terms to the
-------------
Company or its Subsidiaries no less favorable than what the
Company or its Subsidiaries would have had with third parties.
Section 3.24. Contracts.
---------
(a) Except for the contracts, agreements, commitments,
instruments, bids and proposals to which the Company or any of
its Subsidiaries is a party listed on Schedule 3.24, neither the
-------------
Company nor any of its Subsidiaries is a party to or otherwise
bound by any written or oral (i) mortgage, indenture, note,
installment obligation or other instrument relating to the
borrowing of money, (ii) guarantee of any obligation (excluding
endorsements of instruments for collection in the ordinary course
of business of the Company or any Subsidiary), (iii) letter of
credit, bond or other indemnity, (iv) joint venture, partnership
or other agreement involving the sharing of profits and losses,
(v) agreement requiring the performance of services or delivery
of goods in an amount exceeding $50,000 or which would not be
completed within six (6) months, (vi) agreement for the sale or
lease to any person of any material amount of assets other than
the retirement or other disposition of assets no longer useful to
the Company or any of its Subsidiaries or the sale of assets in
the ordinary course of business, (vii) agreement requiring the
payment of more than $50,000 in any 6-month period for the
purchase or lease of any machinery, equipment or other capital
assets, (viii) agreement providing for the lease or sublease (as
lessor, sublessor, lessees or sublessee) of any real property,
(ix) distributor, sales representative, broker or agent
agreement, (x) collective bargaining agreement, employment or
consulting agreement or agreement providing for severance
payments or other additional rights or benefits (whether or not
optional) in the event of the sale of the Company or any of its
Subsidiaries, (xi) agreement requiring the payment to any person
of more than $50,000 in any 6-month period for the purchase of
goods or services, (xii) material warranties relating to products
sold or distributed or services performed or provided by the
Company or any of its Subsidiaries in the last six (6) years,
(xiii) license or sublicense agreement (whether as licensor,
licensee, sublicensor or sublicensee) with respect to any
material item of Intellectual Property owned or licensed by the
Company or any of its Subsidiaries, or (xiv) agreement imposing
non-competition, confidentiality or exclusive dealing obligations
on the Company or any of its Subsidiaries, except for
confidentiality agreements entered into with respect to this
transaction.
(b) The Company has delivered or made available to
Parent complete and correct copies of each written agreement
listed on Schedule 3.24, each as amended to date, and a summary
-------------
of the terms of each oral agreement listed on Schedule 3.24.
-------------
Each agreement listed on Schedule 3.24 is a valid, binding and
-------------
enforceable obligation of the Company or any of its Subsidiaries
and, to the Company's knowledge, the other party or parties
thereto and is in full force and effect. Except as set forth on
Schedule 3.24 (i) neither the Company or any of its Subsidiaries
-------------
nor, to the Company's knowledge, any other party thereto is in
material breach of any material term of any such agreement or has
repudiated any material term of any such agreement, (ii) no
event, occurrence or condition exists (including the transactions
contemplated under this Agreement) which, with the lapse of time
or the giving of notice or both, would become a default under any
such agreement by the Company or any of its Subsidiaries or, to
the Company's knowledge, any other party thereto, and (iii) the
Company or any of its Subsidiaries has not released or waived any
material right under any contract. Except as disclosed on
Schedule 3.07, the Company is not required to give notice to any
-------------
other person who is a party to an agreement listed on Schedule
________
3.24 regarding this Agreement or the Merger.
----
(c) Schedule 3.24 sets forth a correct and complete
-------------
list of the ten largest customers of the Company and its
Subsidiaries in terms of net revenues during each of the 1994 and
1995 fiscal years and the first six months of fiscal 1996,
showing the total net revenue received in each such period from
each such customer. Except to the extent set forth on Schedule
--------
3.24, since June 30, 1996, there has not been any adverse change
----
in the business relationship between the Company or any of its
Subsidiaries and any customer listed on such Schedule.
Section 3.25. Personnel. Set forth on Schedule 3.25
--------- -------------
attached hereto is a correct and complete list of: (i) all full
time and part time employees including their respective
positions, dates of hire and salary; (ii) all employment,
severance, bonus, profit sharing, percentage compensation and
pension or retirement plans; stock purchase and stock option
plans; contracts or agreements with present or former directors,
officers or employees that are not terminable on 60 days' or less
notice without penalty to the Company; and all consulting
agreements, to which the Company or any of its Subsidiaries is a
party or to which they are bound as of the date of this
Agreement; (iii) all group insurance programs in effect for
employees of the Company and its Subsidiaries; and (iv) all
accrued but unused vacation, holiday and sick-time on the account
of each employee of the Company and its Subsidiaries. Neither
the Company nor any of its Subsidiaries is in default with
respect to any of its obligations listed above.
Section 3.26. Compliance with Laws. Except as
--------------------
disclosed in this Agreement or in the Schedules hereto, the
operations of the business of the Company and its Subsidiaries as
currently conducted are not, and as heretofore conducted, to the
knowledge of the Company, were not in violation of, nor is the
Company or any of its Subsidiaries in default under, or violation
of, any federal, state, local or foreign law, statute or
regulation or any order, judgment or decree of any federal,
state, local or foreign governmental authority, regulatory or
administrative agency, commission, court or tribunal to which the
Company or any of its Subsidiaries are bound, except for such
violations or defaults as have not had a Company Material Adverse
Effect. The Company and its Subsidiaries have been duly granted
all permits, licenses, variances, exemptions, orders, approvals
and authorizations ("Permits") necessary for the conduct of their
businesses as currently conducted and are in compliance with the
terms of each such Permit, except where the failure to obtain
such Permits or to comply with such Permits would not have a
Company Material Adverse Effect. Set forth on Schedule 3.26
-------------
attached hereto is a correct and complete list of all such
Permits. Except as set forth on Schedule 3.26, the entry into
-------------
this Agreement and the consummation of the Merger will not
require any modification, re-application, approval or other
consent as to any Permit.
Section 3.27. Accounts Receivable. Set forth on
-------------------
Schedule 3.27 attached hereto is a correct and complete list of
-------------
the work-in-process and accounts receivable of the Company and
its Subsidiaries as set forth on the June 1996 Balance Sheet,
including the degree of completion for each project and the
amounts expended thereon as of June 30, 1996. All accounts
receivable which have arisen subsequent to the June 1996 Balance
Sheet represent sales made or work performed in the ordinary
course of business, are current and collectable and, to the
Company's knowledge, the same will be collected in full (net of
reserve for bad debts) in the ordinary course of business and are
not subject to any claims, offsets, allowances or adjustments.
Section 3.28. Books and Records. The Company has
-----------------
maintained and preserved complete and accurate books and records
for its material transactions. The minute books of the Company
and its Subsidiaries include complete and correct minutes of all
meetings of their respective directors committees and
stockholders.
Section 3.29. Board Recommendation. The Board of
--------------------
Directors of the Company has duly adopted, at a special meeting
of such Board duly held on September 3, 1996, resolutions
approving this Agreement, the Merger and the other transactions
contemplated hereby on the terms and conditions set forth herein,
has taken all actions so that the restrictions of Chapter 1704 of
the Ohio Act applicable to a "Chapter 1704 transaction" (as
defined in said Chapter 1704) will not apply to the execution,
delivery or performance of this Agreement or the consummation of
the Merger or the other transactions contemplated by this
Agreement, and has determined to recommend that the stockholders
of the Company approve this Agreement and the Merger (subject to
the fiduciary duty of the Board of Directors under applicable
law). The Board of Directors of the Company has been advised by
Xxxxxx X. Xxxx and Xxxx X. Rochester, the principal shareholders
of the Company, that they intend to vote their Shares in favor of
this Agreement and the Merger.
Section 3.30. General Representation and
--------------------------
Warranty. Neither this Agreement nor any schedule attached
--------
hereto or other documents and written information furnished by or
on behalf of the Company, its attorneys, auditors or insurance
agents to Parent in connection with this Agreement contains any
untrue statement of material fact or omits to state any material
fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they were made,
not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub, jointly and severally, hereby represent
and warrant to the Company as follows:
Section 4.01. Organization and Power.
----------------------
(a) Parent is a corporation duly organized, validly
existing and in good standing under the laws of Ontario, Canada.
Parent has all requisite corporate power to enter into this
Agreement, and all other documents and instruments to be executed
and delivered by it in connection herewith, and to carry out its
obligations hereunder and thereunder.
(b) Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Ohio. Sub has all requisite corporate power to enter into this
Agreement, and all other documents and instruments to be executed
and delivered by it in connection herewith, and to carry out its
obligations hereunder and thereunder. Sub is a wholly-owned
subsidiary of Parent, has been organized solely for the purpose
of consummating the Merger and has conducted no business or
operations of any nature.
Section 4.02. Authorization. The execution and
-------------
delivery of this Agreement and the due consummation by Parent and
Sub of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part
of Parent and Sub. This Agreement constitutes (and each document
and instrument contemplated by this Agreement, when executed and
delivered in accordance with the provisions hereof, will
constitute) a valid and legally binding agreement of each of
Parent and Sub, enforceable against them in accordance with its
terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium, or other similar laws
affecting the rights of creditors generally, general principles
of equity, and public policy.
Section 4.03. No Conflicts. The execution, delivery
------------
and performance of this Agreement by Parent and Sub and the
consummation of the transactions contemplated hereby will not
constitute a conflict with, breach or violation of or default (or
an event which with notice or lapse of time or both would become
a default) under (a) Parent's Charter or By-Laws, as amended to
date; (b) Sub's Articles of Incorporation or Code of Regulations,
as amended to date; (c) any material agreement, instrument,
license, franchise or permit to which Parent or Sub is subject or
by which Parent or Sub is bound; (e) any order, writ, injunction
or decree to which Parent or Sub is subject or by which Parent or
Sub is bound; or (f) any law, rule or regulation to which Parent
or Sub is subject or to which it is bound.
Section 4.04. Consents and Approvals. Except for
----------------------
filings, approvals or consents required by (a) the Secretary of
State of the State of Ohio; (b) the Xxxx-Xxxxx-Xxxxxx Act; and
(c) such other statutes, rules or regulations which may require
registrations, authorizations, consents or approvals relating to
matters that, in the aggregate, are not material to Parent,
neither Parent nor Sub is required to submit any notice, report
or other filing with or obtain any consent or approval from any
governmental authority or third party in connection with the
execution and delivery by Parent or Sub of this Agreement or the
consummation of the transactions contemplated hereby.
Section 4.05. Proxy Statement. None of the
---------------
information to be supplied by Parent or Sub or any of their
accountants, counsel or other authorized representatives for
inclusion in the Proxy Statement will, at the time of the mailing
of the Proxy Statement and any amendments or supplements thereto,
and at the time of the Shareholders Meeting contain any untrue
statement of 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 are made, not misleading. If
at any time prior to the Effective Time any event with respect to
Parent or Sub, or their officers and directors or any of the
subsidiaries of Parent shall occur which is or should be
described in an amendment of, or a supplement to, the Proxy
Statement, Parent will notify the Company in writing of such
event.
Section 4.06. Financing. Xxxxxx Capital has indicated
---------
its willingness to raise such funds as will be sufficient to pay
the Merger Consideration and all related fees and expenses of
Parent. Parent will promptly provide to the Company a true and
complete copy of a commitment letter (the "Commitment Letter")
and all final documentation relating thereto and received by
Parent after the date hereof. The financing required to effect
the Merger and pay related fees and expenses as set forth in the
Commitment Letter is hereinafter referred to as the "Financing."
Section 4.07. Brokers and Finders. No broker, finder
-------------------
or investment banker is entitled to any brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated hereby based upon arrangements made by Parent or
Sub.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.01. Conduct of Business Between Execution of
----------------------------------------
this Agreement and the Effective Time. During the period
-------------------------------------
commencing on the date of this Agreement and continuing until the
Effective Time, the Company covenants and agrees that the
business of the Company and the Company's Subsidiaries shall be
conducted only in the regular and ordinary course of business,
consistent with past practice; and that it shall use all
reasonable efforts to (i) preserve intact its business, (ii) keep
available the services of its current officers and employees, and
(iii) preserve its relationships with desirable customers,
suppliers, licensors, licensees, distributors and others having
business dealings with it. Without limiting the generality of
the foregoing, except as set forth on Schedule 5.01 attached
-------------
hereto, neither the Company nor any of its Subsidiaries shall,
without the prior written consent of Parent:
(a) adjust, split, combine or reclassify any shares of
capital stock;
(b) make, declare, set aside or pay any dividend or
make any other distribution on, or directly or indirectly issue,
sell, pledge, grant, redeem, repurchase or otherwise acquire, any
shares of its or any Subsidiary's capital stock, any securities
or obligations convertible into or exchangeable for any shares of
its capital stock, or any options, warrants or other rights to
acquire any shares of its capital stock except the issuance of
stock pursuant to the exercise of employee stock options
outstanding on the date hereof;
(c) grant any stock option or appreciation rights or
other rights to share in the equity value of the Company or any
Subsidiary;
(d) make any changes in the Articles of Incorporation,
Code of Regulations or By-laws, as amended to date, of the
Company or any Subsidiary;
(e) acquire, sell, lease, encumber, transfer or
dispose of any assets, or make any capital expenditures, in
either case, in excess of $10,000 individually or $100,000 in the
aggregate, outside the ordinary course of business, except
pursuant to obligations in effect on the date hereof;
(f) incur any indebtedness for borrowed money or
guarantee any indebtedness or issue or sell securities or
warrants or rights to acquire any debt securities or guarantee
(or become liable for) any debt of others or make any loans,
advances or capital contributions or mortgage, pledge or
otherwise encumber any assets or create or suffer any material
lien thereupon, except pursuant to obligations or any guarantees
thereof which in the aggregate do not exceed $100,000;
(g) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than any payment, discharge or
satisfaction (i) in the ordinary course of business consistent
with past practice, or (ii) in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by,
the financial statements (or the notes thereto) of the Company.
(h) notwithstanding any provision of clause (g) of
this Section 5.01, pay, discharge or satisfy any claims,
liabilities or obligations in connection with the Company
Litigation, other than attorneys' fees and other expenses of
defending such actions, it being understood and agreed that the
Company shall keep Parent fully informed of all material
developments in connection with the Company Litigation, and that
Parent shall have the right to participate in all decisions with
respect to the management, defense and settlement of the Company
Litigation;
(i) change any of the accounting principles or
practices used by it (except as required by generally accepted
accounting principles);
(j) except as required by law or contemplated by this
Agreement (i) enter into, adopt, amend or terminate any employee
benefit plan or any agreement, arrangement, plan or policy
between the Company and one or more of its directors or executive
officers, (ii) increase in any manner the compensation or fringe
benefits of any director, officer or employee or (iii) grant any
bonus to any of its executive officers or pay any termination,
severance or other benefit not required by any plan and
arrangement as in effect on the date hereof;
(k) make or enter into any agreement, commitment or
contract, except those in the ordinary course of business, for
the purchase or sale of products in amounts not exceeding $50,000
in any instance and not giving rise to obligations extending
beyond 90 days from the date hereof, or modify, amend or
terminate any material contract (other than as required by the
terms thereof), or pay any amount not required by law or by any
contract in an amount exceeding $50,000;
(l) make or enter into any lease of real property or
extend or amend any existing lease of real property;
(m) intentionally take, or enter into an agreement to
take, any action that would result in any of the conditions to
the Merger set forth in Article VI not being satisfied;
(n) make any material Tax election or settle or
compromise any material federal, state, local or foreign income
Tax liability, or waive or extend the statute of limitations in
respect of any such Taxes; or
(o) agree to, or make any commitment to take any of
the actions prohibited by this Section 5.01; or take any action,
or agree or commit to take any action that would make any
representation or warranty of the Company hereunder inaccurate in
any material respect at, or as of any time prior to the Effective
Time, or omit or agree or commit to omit to take any action
necessary to prevent any such representation or warranty from
being inaccurate in any material respect at any such time.
Section 5.02. Mutual Covenants.
----------------
(a) Compliance with Laws. Each party covenants and
--------------------
agrees to use its reasonable best efforts to comply promptly with
(and furnish information to the other parties in connection with)
any and all requirements that federal or state law may impose on
it or them, as the case may be, with respect to the Merger.
(b) Cooperation in Connection with Proceedings. Each
------------------------------------------
party covenants and agrees that if any action, suit, proceeding
or investigation of the nature specified in Section 6.01(c)
hereof is commenced, it shall cooperate with the others and shall
use its reasonable best efforts to defend against the same and
respond thereto.
(c) Notification of Certain Events. Each party
------------------------------
covenants and agrees to give prompt written notice to the others
of (i) the occurrence (or non-occurrence) of any event the
occurrence (or non-occurrence) of which would be likely to cause
(A) any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect or (B) any
covenant, agreement or condition in this Agreement not to be
complied with or satisfied in any material respect; and (ii) any
failure by such first party to comply with or satisfy any
covenant, agreement or condition contained in this Agreement in
any material respect.
Section 5.03. Access to Information; Confidentiality.
--------------------------------------
(a) Information of the Company. The Company covenants
--------------------------
and agrees to afford Parent and Parent's accountants, counsel and
other representatives, full access, during normal business hours
during the period prior to the Effective Time or the earlier
termination of this Agreement, to all of the properties, books,
contracts, commitments and records of the Company and its
Subsidiaries, and, during such period, shall furnish promptly to
Parent a copy of each report, schedule and other document filed
or received thereby during such period pursuant to the
requirements of federal and state securities laws.
(b) Confidentiality Covenants of Parent. Parent
-----------------------------------
covenants and agrees that until the Effective Time, it shall
continue to be bound by the terms of the Confidentiality
Agreement, dated August 21, 1996.
Section 5.04. Meeting of Shareholders. The Company
-----------------------
shall, promptly after the date of this Agreement, take all action
necessary in accordance with the Ohio Act and its Articles of
Incorporation and Code of Regulations to convene a meeting of the
Company's shareholders to act on this Agreement and the Merger
(the "Shareholders Meeting"), and the Company shall consult with
--------------------
Parent in connection therewith. The Company shall use its
reasonable best efforts to solicit from shareholders of the
Company proxies in favor of the approval and adoption of the
Merger Agreement and to secure the vote or consent of
shareholders required by the Ohio Act to approve and adopt the
Merger Agreement, unless otherwise required by the applicable
fiduciary duties of the directors of Company, as determined by
such directors in good faith after consultation with independent
legal counsel (which may include the Company's regularly engaged
legal counsel).
Section 5.05. Proxy Statement. As promptly as
---------------
practicable after the execution of this Agreement, the Company
shall prepare and file with the SEC a proxy statement and a form
of proxy, in connection with the vote of the Company's
shareholders at the Shareholders Meeting with respect to the
Merger (such proxy statement, together with any amendments
thereof or supplements thereto, in each case in the form or forms
mailed to the Company's shareholders, being the "Proxy
-----
Statement"), and use all reasonable efforts to obtain SEC
---------
clearance of the Proxy Statement. Each of Parent and the Company
shall furnish all information concerning it and the holders of
its capital stock as may be required by the Exchange Act or the
regulations promulgated thereunder, or as the other may
reasonably request in connection with such actions. As promptly
as practicable after clearance of the Proxy Statement, the
Company shall mail the Proxy Statement to its shareholders. The
Proxy Statement shall include the recommendation of the Company's
Board of Directors in favor of the Merger unless otherwise
required by the applicable fiduciary duties of the Board of
Directors of the Company, as determined by such directors in good
faith after consultation with legal counsel.
Section 5.06. Public or Shareholder Communications.
------------------------------------
From and after the date of this Agreement, except as required by
law, the Company, Parent and Sub will not, with respect to the
transactions contemplated hereby, issue any press release or make
any public statements or, in the case of the Company, mail any
communications or letters to its shareholders generally, except
with the prior written approval of the other party or as required
by law. With respect to any communication required by law, the
party making such communication agrees to use its best efforts to
provide a copy of the text of such communication to the other
party prior to its release together with an explanation as to the
legal necessity for the communication.
Section 5.07. Additional Agreements. Subject to the
---------------------
terms and conditions herein provided, each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective
the transactions contemplated by the Merger and this Agreement,
including, but not limited to, using its best efforts to obtain
all necessary waivers, consents, authorizations and approvals of
or exemptions by any governmental authority or third party, and
effecting all necessary registrations and filings. In case at
any time after the Effective Time any further action is necessary
or desirable to carry out the purposes of this Agreement, the
proper officers and directors of each party shall take all such
necessary action.
Section 5.08. Closing Conditions. Each of the Company
------------------
and Parent will use its reasonable best efforts to cause the
conditions set forth in Article VI to be satisfied; provided,
--------
however, this provision shall not require any party to waive any
-------
condition.
Section 5.09. Parent Shareholder Approval. Parent
---------------------------
covenants and agrees to vote the shares of capital stock of Sub
held by Parent to approve and adopt this Agreement and the
transactions contemplated hereby, and (i) cause Sub to take any
and all actions as may be necessary or appropriate to consummate
the Merger in accordance with the terms of this Agreement.
Section 5.10. Director and Officer Liability.
------------------------------
(a) The Regulations of the Surviving Corporation with
respect to indemnification of directors and officers shall not be
amended, repealed, or otherwise modified in any manner that would
adversely affect the rights thereunder of individuals who at the
Effective Time were directors and officers of the Company for a
period of five (5) years after the Effective Time, unless such
modification is required by law.
(b) Assuming consummation of the Merger, from and
after the Effective Time, Parent shall cause the Surviving
Corporation to indemnify, defend and hold harmless the present
and former directors and officers of the Company and its
Subsidiaries against all losses, claims, damages and liability
and amounts paid in settlement (with the approval of Parent,
which approval shall not be unreasonably withheld) in connection
with any claim, action, suit, proceeding, or investigation,
whether civil, criminal, administrative, or investigative, (x) in
respect of acts or omissions occurring at or prior to the
Effective Time to the fullest extent that the Company or such
Subsidiary would have been permitted to indemnify such person
under applicable law and the Articles of Incorporation and Code
of Regulations of the Company or such Subsidiary in effect on the
date hereof or (y) except for a claim arising or based upon the
gross negligence or willful misconduct of the indemnified party,
in any event arising out of or pertaining to the transactions
contemplated by this Agreement. Any person wishing to claim
indemnification under this Section 5.10, upon learning of any
such claim, action, suit, proceeding or investigation, shall
notify the Surviving Corporation (but the failure to so notify
the Surviving Corporation shall not relieve the Surviving
Corporation from any liability which it may have under this
Section 5.10, except to the extent such failure prejudices the
Surviving Corporation), and shall, to the extent required by the
Ohio Act, deliver to the Surviving corporation any undertaking
required prior to payment of expenses in advance of final
disposition. For at least five (5) years after the Effective
Time, Parent will use its best efforts to cause the Surviving
Corporation, without any lapse in coverage, to provide officers'
and directors' liability insurance in respect of acts or
omissions occurring prior to the Effective Time covering each
such person currently covered by the Company's officers' and
directors' liability policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on
the date hereof.
Section 5.11. No Solicitation.
---------------
(a) The Company agrees that it will not, after the
date hereof and prior to the Effective Time, seek, directly or
through its agents, representatives, Subsidiaries or affiliates,
or permit any of its officers or directors to seek (whether in
their capacities as officers or directors or in their individual
capacities) or otherwise solicit or encourage the initiation of
inquiries or proposals from any person or persons (other than
Parent), to acquire or purchase all or a substantial part of its
assets or all or a substantial part of its capital stock or the
capital stock of any of its Subsidiaries, or for the Company or
its Subsidiaries to acquire or purchase in one or more related
transactions the capital stock or assets of persons (other than
Parent) whereby the Company would issue (or commit to issue)
shares of its capital stock constituting more than a majority of
its outstanding voting securities, or to effect a consolidation
or merger (other than the Merger) or other business combination
or recapitalization (an "Acquisition Proposal"). The Company
shall immediately cease and cause to be terminated all existing
discussions and negotiations, if any, with any parties conducted
heretofore with respect to any Acquisition Proposal (other than
Parent). Nothing contained in this Section 5.11 shall prevent
the Board of Directors of the Company from considering,
negotiating, approving and recommending to the shareholders of
the Company, a bona fide Acquisition Proposal not solicited,
directly or indirectly, in violation of this Agreement, provided
the Board of Directors of the Company determines in good faith
(upon advice of counsel) that it is required to do so in order to
discharge properly its fiduciary duties.
(b) The Company shall immediately notify Parent after
receipt of any Acquisition Proposal (whether written or oral), or
any modification of or amendment to any Acquisition Proposal, or
any request for nonpublic information relating to the Company or
any Subsidiary in connection with an Acquisition Proposal or for
access to the properties, books or records of the Company or any
Subsidiary by any person or entity that informs the Board of
Directors of the Company or such Subsidiary that it is
considering making, or has made, an Acquisition Proposal. Such
notice to Parent shall be made orally and in writing, and shall
indicate whether the Company is providing or intends to provide
the person making the Acquisition Proposal with access to
information concerning the Company as provided in Section
5.11(c), the identity of the party making the Acquisition
Proposal and the terms and conditions of the transaction
constituting the Acquisition Proposal.
(c) If the Board of the Company receives a request for
commercial nonpublic information by a person who makes a bona
fide Acquisition Proposal, and the Board of Directors determines
in good faith and upon the advice of counsel that it is required
to cause the Company to act as provided in this Section 5.11(c)
in order to discharge properly its fiduciary duties, then,
provided the person making the Acquisition Proposal has executed
a confidentiality agreement substantially similar to the one then
in effect between the Company and Parent, the Company may provide
such person with access to information regarding the Company.
Section 5.12. Periodic Reports. Until the Effective
----------------
Time, the Company and Parent each will, subject to the
requirements of applicable laws, furnish to the other all filings
to be made with the SEC and all materials to be mailed to their
respective stockholders and will solicit comments with respect
thereto from the other, in each case at least 48 hours (or as
soon thereafter as is practicable) prior to the time of such
filings and the time of such mailings.
Section 5.13. Financing. Parent covenants and agrees
---------
to use its best efforts to obtain the Financing pursuant to the
Commitment Letter. If the Financing pursuant to the Commitment
Letter, or any alternative Financing obtained in lieu thereof
pursuant to this Section 5.13, is not obtainable, then Parent
covenants and agrees to use its best efforts to obtain, within
thirty (30) days after being notified that the Financing pursuant
to the Commitment Letter is not obtainable, alternative Financing
on terms which in the aggregate are no less advantageous to
Parent than the terms provided for in the Commitment Letter.
Parent shall give the Company prompt notice when any Financing
becomes unobtainable and when any such alternative Financing is
obtained, including a full description of the terms thereof.
Section 5.14. Xxxx-Xxxxx-Xxxxxx Filing. To the extent
------------------------
required by law, the Company and Parent shall file Notification
and Report Forms under the Xxxx-Xxxxx-Xxxxxx Act with the Federal
Trade Commission and the Antitrust Division of the Department of
Justice. The parties shall cooperate and consult with each other
with respect to the preparation of the Notification and Report
Forms and any other submissions, including, but not limited to,
responses to written or oral comments or requests for additional
information or documenting material by the Federal Trade
Commission or the Antitrust Division of the Department of
Justice, required to be made pursuant to the Xxxx-Xxxxx-Xxxxxx
Act in connection with the transactions contemplated hereby. The
filing fee associated with such filings shall be borne equally by
Parent and the Company.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.01. Conditions to Each Party's Obligation to
----------------------------------------
Effect the Merger. The respective obligations of each party to
-----------------
effect the Merger shall be subject to the fulfillment at or prior
to the Effective Time of the following conditions:
(a) This Agreement and the transactions contemplated
hereby shall have been approved and adopted by the requisite vote
of the shareholders of the Company required by applicable law or
by the Company's Articles of Incorporation or Code of
Regulations;
(b) The waiting period, and any extensions thereof,
applicable to the consummation of the Merger under the Xxxx-
Xxxxx-Xxxxxx Act shall have expired;
(c) No preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission nor any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority shall be in effect, which would prevent the
consummation of the Merger;
(d) All actions by or in respect of or filing with any
governmental regulatory or administrative agency or commission
required to consummate the Merger shall have been obtained or
made;
(e) The fairness opinion delivered in accordance with
Section 3.12 hereof shall not have been modified or withdrawn and
the Company shall have received a fairness opinion, substantially
in the form of the fairness opinion delivered in accordance with
Section 3.12 hereof, to be included in the Proxy Statement mailed
to the Company's shareholders, and such fairness opinion shall
not have been withdrawn or modified; and
(f) By not later than immediately prior to the
Effective Time, Xxxxxx X. Xxxx and Xxxxxx X. Rochester shall each
have entered into Employment Agreements with the Company and
Parent, substantially in the forms of Annexes B and C hereto;
Section 6.02. Additional Conditions to the Obligations
----------------------------------------
of the Company. The obligation of the Company to effect the
--------------
Merger is also subject to each of the following conditions:
(a) Each of Parent and Sub shall have performed in all
material respects each obligation and covenant to be performed by
it hereunder at or prior to the Effective Time;
(b) The representations and warranties of Parent and
Sub set forth in this Agreement shall be true and correct in all
material respects at and as of the Effective Time as if made at
and as of such time, except as affected by transactions
contemplated or permitted by this Agreement and except to the
extent that any such representation or warranty is made as of a
specified date, in which case such representation or warranty
shall have been true and correct in all material respects as of
such date;
(c) Parent shall have delivered to the Company
certificates issued by appropriate governmental authorities
evidencing the good standing of Parent in the Province of Ontario
and of Sub in the State of Ohio;
(d) Parent and Sub shall have delivered to the Company
copies, certified by the Secretary or an Assistant Secretary, of
the resolutions adopted by the Boards of Directors of Parent and
Sub, authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, and by Parent
as the sole shareholder of Sub, approving this Agreement and the
Merger;
(e) Parent shall have delivered to the Company a
certificate of its Chief Executive and Chief Financial Officers,
certifying as to the fulfillment of the conditions to the
obligations of the Company set forth in this Article VI; and
----------
(f) The Company shall have received the opinion of
counsel to Parent and Sub, substantially in the form of Annex A
hereto.
Section 6.03. Additional Conditions to the Obligations
----------------------------------------
of Parent and Sub. The obligations of Parent and Sub to effect
-----------------
the Merger are also subject to each of the following conditions:
(a) The Company shall have performed in all material
respects each obligation and covenant to be performed by it
hereunder at or prior to the Effective Time;
(b) The representations and warranties of the Company
set forth in this Agreement shall be true and correct in all
material respects at and as of the Effective Time as if made at
and as of such time, except as affected by transactions
contemplated or permitted by this Agreement and except to the
extent that any of such representation or warranty is made as of
a specified date, in which case such representation or warranty
shall have been true and correct in all material respects as of
such date;
(c) The Material Consents set forth on Schedule 3.07
attached hereto, required to consummate the transactions
contemplated hereby, shall have been obtained;
(d) The Company shall have delivered to Parent
certificates issued by appropriate governmental authorities (i)
evidencing the good standing of the Company in the State of Ohio
and as a foreign corporation in each jurisdiction in which it has
qualified to do business as a foreign corporation, and (ii)
evidencing the good standing of each Subsidiary of the Company in
its jurisdiction of organization or incorporation and as a
foreign corporation in which it has qualified to do business as a
foreign corporation;
(e) The Company shall have delivered to Parent copies,
certified by the Secretary or Assistant Secretary, of the
resolutions adopted by the Board of Directors of the Company
authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, and by the
shareholders of the Company approving this Agreement and the
Merger;
(f) Parent shall have received sufficient funding
pursuant to the Commitment Letter to enable Sub to consummate the
Merger and to pay related fees and expenses;
(g) No Company Material Adverse Effect shall have
occurred;
(h) All incentive stock option and non-qualified stock
option plans of the Company, and each option issued under any of
such plans, shall have been amended, to the extent necessary in
accordance with Section 2.05 hereof;
(i) Appraisal rights under the Ohio Act shall have
been perfected by the holders of not more than five percent (5%)
of the outstanding shares;
(j) The Company shall have delivered to Parent and Sub
the certificate of its Chief Executive and Chief Financial
Officers, certifying as to the fulfillment of the conditions to
the obligations of Parent and Sub set forth in this Article VI;
----------
(k) Parent and Sub shall have received the opinion of
Xxxxxxxx Xxxx & Xxxxx P.L.L., counsel to the Company,
substantially in the form of Annex D hereto; and
(l) The officers and directors of the Company and its
Subsidiaries specified by Parent shall have resigned their
respective positions as of the Effective Time.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 7.01. Termination. This Agreement may be
-----------
terminated and the Merger may be abandoned at any time prior to
the Effective Time, whether before or after approval by the
shareholders of the Company:
(a) by mutual written consent of the Board of
Directors of the Company and the Board of Directors of Parent;
(b) by either the Company or Parent, by written notice
to the other, if (i) the Effective Time shall not have occurred
on or before January 31, 1997, (ii) the requisite vote of the
shareholders of the Company to approve this Agreement and the
transactions contemplated hereby shall not be obtained at the
Shareholders Meeting, or any adjournments thereof, called
therefor, or (iii) any court of competent jurisdiction in the
United States or any state or in Canada or any province shall
have issued an order, judgement or decree (other than a temporary
restraining order) restraining, enjoining or otherwise
prohibiting the Merger and such order, judgement or decree shall
have become final and non-appealable; provided, however, that the
right to terminate this Agreement (x) under clause (i) shall not
be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date or
(y) under clause (iii) shall not be available to any party unless
such party shall have used all reasonable efforts to remove such
order, judgement or decree;
(c) by Parent, by written notice to the Company, if:
(i) there shall have been any breach of any
representation, warranty, covenant or agreement of the
Company hereunder which, if not remedied prior to the
Effective Time, would have a Company Material Adverse Effect
and such breach shall not have been remedied, or the Company
shall not have provided Parent with reasonable assurance
that such breach will be remedied prior to the Effective
Time, within ten (10) days after receipt by the Company of
notice in writing from Parent specifying the nature of such
breach and requesting that it be remedied; or
(ii) the Board of Directors of the Company or any
committee thereof shall withdraw or modify in any manner
adverse to Parent its approval or recommendation of this
Agreement or the Merger contemplated hereby; or
(iii) the Board of Directors of the Company or any
committee thereof (A) at any time after the Company or any
of its Subsidiaries has become aware of any event which
would require that notice be given to Parent pursuant to
Section 5.11 hereof, shall withdraw or modify in any manner
adverse to Parent its approval or recommendation of this
Agreement or the Merger contemplated hereby, or (B) shall
approve or recommend any Acquisition Proposal (including
approving of, expressing no opinion or remaining neutral as
to a third party tender offer for Shares when expressing the
position of the Company to any such tender offer in
complying with Rule 14e-2 promulgated under the Exchange
Act) involving the Company or any of its Subsidiaries, in
each case by a party other than Parent or any of its
affiliates, or (C) shall resolve to take any of the actions
specified in clauses (A) or (B); or
(iv) The Company or any of its Subsidiaries shall
enter into a definitive agreement (or a letter of intent)
for an Acquisition Proposal (other than with Parent or any
of its affiliates) or the Board of Directors of the Company
or any committee thereof shall resolve to take such action;
or
(v) any person or group (within the meaning of Section
13(d)(3) of the Exchange Act) other than Parent or a person
or group approved by Parent shall acquire a number of shares
of capital stock of the Company entitled to cast twenty
(20%) percent of the total number of votes entitled to be
cast in an election of directors of the Company, or the
directors of the Company currently in office shall cease to
represent a majority of the directors of the Company.
(d) by the Company, by written notice to Parent, if:
(i) there shall have been any breach of any
representation, warranty, covenant or agreement of Parent
hereunder which, if not remedied prior to the Effective
Time, would have an effect which is material and adverse to
the business, financial condition or results of operations
of Parent and such breach shall not have been remedied or
Parent shall not have provided the Company with reasonable
assurance that such breach will be remedied prior to the
Effective Time, within ten (10) days after receipt by Parent
of notice in writing from the Company, specifying the nature
of such breach and requesting that it be remedied; or
(ii) the Board of Directors of the Company or any
committee thereof determines to enter into a definitive
agreement (or a letter of intent) for an Acquisition
Proposal (other than with Parent or any of its affiliates);
or
(iii) the Board of Directors of Parent or any
committee thereof shall withdraw or modify in any manner
adverse to the Company its approval or recommendation of
this Agreement or the Merger contemplated hereby; or
(iv) the Financing pursuant to the Commitment Letter,
or any alternative Financing as contemplated by Section 5.13
obtained in lieu thereof, shall have become unobtainable and
Parent shall not have given the Company reasonable evidence
within thirty (30) days thereafter that alternative
Financing as contemplated by Section 5.13 hereof has been
obtained.
Section 7.02. Effect of Termination and
-------------------------
Abandonment. In the event of termination of this Agreement and
-----------
abandonment of the Merger pursuant to this Article VII, this
Agreement shall forthwith become void and no party hereto (or any
of its directors or officers) shall have any liability or further
obligation to any other party to this Agreement, except for
termination payments provided in Section 7.03 hereof and except
that nothing herein will relieve any party from liability for any
breach of its representations, warranties or covenants in this
Agreement.
Section 7.03. Termination Payment. If Parent shall
-------------------
terminate this Agreement pursuant to Section 7.01(b)(ii) hereof
or pursuant to Section 7.01(c)(ii), (iii), (iv) or (v) hereof, or
if the Company shall terminate this Agreement pursuant to
Section 7.01(b)(ii) hereof, or pursuant to Section 7.01(d)(ii)
hereof, the Company shall pay $1,000,000 plus an amount equal to
Parent's actual expenses, including third party costs, such as
attorneys and financial advisors, incurred in connection with
this Agreement and the proposed transaction to Parent not later
than ten (10) days after notice of termination from Parent or the
Company, as the case may be. If the Company shall terminate this
Agreement pursuant to Section 7.01(d)(iv) hereof, Parent shall
pay the Company's actual expenses incurred in connection with
this Agreement and the proposed transaction to the Company,
including third party costs, such as attorneys and financial
advisors, not later than ten (10) days after termination of the
Agreement. Each party agrees that if it fails to pay timely the
termination payment due by it pursuant to this Section, the
amount not timely paid shall bear interest at the rate of 12% per
annum accruing from the termination date and continuing until the
termination payment is paid in full. In the event that it is
necessary for a party to institute proceedings to seek collection
of the termination payment due to it and it is entitled to
receive any of the amounts sought in the collection proceeding,
in addition to paying such amount the party failing to make such
termination payment shall reimburse the other party for the
attorneys' fees and other reasonable costs and expenses incurred
in connection with such collection.
Section 7.04. Amendment. This Agreement may be
---------
amended by the parties hereto by action taken by or on behalf of
their respective Boards of Directors at any time before or after
approval hereof by the shareholders of the Company, but, after
such approval, no amendment shall be made which reduces the
amount or changes the form of the Merger Consideration or in any
way adversely affects the rights of holders of the Shares without
the further approval of such holders. This Agreement may not be
amended except by an instrument in writing signed by or on behalf
of each of the parties hereto.
Section 7.05. Waiver. At any time prior to the
------
Effective Time, the parties hereto, by action taken by their
respective Boards of Directors, may (a) extend the time for the
performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations
and warranties of the other parties contained herein or in any
document delivered pursuant hereto, and (c) waive compliance with
any of the agreements or satisfaction of any of the conditions
contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. No
waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach in
other instances or a waiver of any other condition or breach of
any other term, covenant, representation or warranty.
Notwithstanding anything to the contrary set forth herein, the
following conditions precedent to the consummation of the Merger
may not be waived by either party hereto: (i) the approval of the
Merger and this Agreement by the shareholders of the Company
pursuant to the Ohio Act; (ii) the expiration or earlier
termination of all applicable waiting periods under the Xxxx-
Xxxxx Xxxxxx Act, with no outstanding requests for additional
information or clarification or notices indicating that further
action will be taken by the Federal Trade Commission or the
Antitrust Division of the Department of Justice with respect to
the Merger; and (iii) the execution by all necessary parties of
the Certificate of Merger to be filed with the Ohio Secretary of
State.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Fees and Expenses. Except as otherwise
-----------------
expressly provided in this Agreement, all costs and expenses
incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 8.02. Survival of Representations and
-------------------------------
Warranties. Except as set forth in the last sentence of this
----------
Section 8.02, the representations and warranties made by each
party contained in this Agreement or in any exhibit, disclosure
schedule, certificate or other instrument delivered pursuant to
this Agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
the other party, whether prior to or after the execution of this
Agreement. No representations and warranties contained in this
Agreement or in any exhibit, disclosure schedule, certificate or
other instrument delivered pursuant to this Agreement shall
survive the consummation of the Merger at the Effective Time.
Section 8.03. Notices. All notices and other
-------
communications required or permitted hereunder shall be in
writing and delivered as follows:
if to Parent or Sub:
American Eco Corporation
00000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, President
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Company:
CHEMPOWER, INC.
000 Xxxx Xxxxxxxxxx Xxxx Xxxx
Xxxxx, Xxxx 00000
Attention: X.X. Xxxx, President
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxxxx Xxxx & Xxxxx P.L.L.
0000 Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
or to such other address as may have been designated in a prior
notice. Notices sent by registered or certified mail, postage
prepaid and with return receipt requested, shall be deemed to
have been given two (2) business days after being mailed, and
otherwise notices shall be deemed to have been given when
received.
Section 8.04. Construction. The headings in this
------------
Agreement are intended solely for convenience of reference and
shall be given no effect in the construction or interpretation of
this Agreement. Prior drafts of this Agreement shall not be
considered in interpreting the rights and obligations of the
parties hereunder. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction will be
applied against any party.
Section 8.05. Exhibits, Schedules and Annexes. The
-------------------------------
Exhibits, Schedules and Annexes referred to in this Agreement
shall be deemed to be an integral part of this Agreement as if
fully rewritten herein. To the extent applicable, a disclosure
set forth on any one such document will serve as a disclosure for
purposes of all other such documents.
Section 8.06. Counterparts. This Agreement may be
------------
executed in multiple counterparts, each of which shall be deemed
an original, and all of which together shall constitute one and
the same document.
Section 8.07. Governing Law. This Agreement,
-------------
including all matters of construction, validity and performance,
shall be governed by and construed and enforced in accordance
with the laws of the State of Ohio, as applied to contracts made,
executed and to be fully performed in such state by citizens of
such state, without regard to conflict of laws principles.
Section 8.08. Pronouns. The use of a particular
--------
pronoun herein shall not be restrictive as to gender or number
but shall be interpreted in all cases as the context may require.
Section 8.09. Time Periods. Unless otherwise provided
------------
herein, any action required hereunder to be taken within a
certain number of days shall be taken within that number of
calendar days; provided, however, that if the last day for taking
-------- -------- -------
such action falls on a weekend or a holiday, the period during
which such action may be taken shall be automatically extended to
the next business day.
Section 8.10. No Third Party Beneficiaries. This
----------------------------
Agreement is solely for the benefit of the parties hereto and, to
the extent provided herein, their respective directors, officers,
employees, agents and representatives, and no provision of this
Agreement shall be deemed to confer upon other third parties any
remedy, claim, liability, reimbursement, cause of action or other
right.
Section 8.11. Enforcement of the Agreement. The
----------------------------
parties hereto agree that irreparable damage would result in the
event that any provision of this Agreement is not performed in
accordance with specific terms or is otherwise breached. It is
accordingly agreed that the parties hereto will be entitled to
equitable relief including an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof.
Section 8.12. Waiver of the Jury Trial. Each party
------------------------
hereto waives the right to a trial by jury in any dispute in
connection with the transactions contemplated by this Agreement,
and agrees to take any and all action necessary or appropriate to
effect such waiver.
Section 8.13. Entire Agreement. This Agreement and
----------------
the agreements and documents referred to in this Agreement or
delivered hereunder are the exclusive statement of the agreement
between the parties concerning the subject matter hereof. All
negotiations and prior agreements between the parties are merged
into this Agreement, except that the Confidentiality Agreements,
dated August 21, 1996, shall remain in full force and effect
until the Effective Time, and there are no representations,
warranties, covenants, understandings, or agreements, oral or
otherwise, in relation thereto among the parties other than those
incorporated herein and to be delivered hereunder.
Section 8.14. Severability. Whenever possible, each
------------
provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by, or
invalid or unenforceable under, applicable law, such provision
will be ineffective only to the extent of such prohibition or
invalidity or unenforceability, without invalidating the
remainder of this Agreement.
Section 8.15. Successors and Assigns. The provisions
----------------------
of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
assigns, provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto. Except as
otherwise provided in this Agreement, nothing in this Agreement
is intended or shall be construed to confer on any person other
than the parties hereto any rights or benefits hereunder.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto
duly authorized, all as of the day and year first above written.
AMERICAN ECO CORPORATION
By: /s/ Xxxxxxx X. XxXxxxxx
________________________
Name:
Title:
SUB ACQUISITION CORP.
By: /s/ Xxxxxxx X. XxXxxxxx
________________________
Name:
Title:
CHEMPOWER, INC.
By: /s/ Xxxxxx X. Xxxx
________________________
Name: X.X. Xxxx
Title: President & CEO
