EXHIBIT 2.6
AGREEMENT OF MERGER
BY AND AMONG
AMERICAN HELICOPTER DRILLING INC.,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
AND
OMNI ENERGY SERVICES CORP.
DATED AS OF OCTOBER 31, 1997
AGREEMENT OF MERGER
BY AND AMONG
AMERICAN HELICOPTER DRILLING INC.,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
AND
OMNI ENERGY SERVICES CORP.
DATED AS OF OCTOBER 31, 1997
THIS AGREEMENT OF MERGER (the "Agreement") is made and entered into as of
the 31st day of October 1997 by and among OMNI ENERGY SERVICES CORP., a
Louisiana corporation ("Omni"), AMERICAN HELICOPTER DRILLING INC., a Montana
corporation ("American"), ▇▇▇▇▇ ▇▇▇▇, in her capacity as a shareholder of
American, and ▇▇▇▇▇ ▇▇▇▇, in his capacity as a shareholder and president of
American (Mr. and ▇▇. ▇▇▇▇ are collectively referred to herein as the
"Shareholders").
RECITALS
WHEREAS, the Shareholders collectively own 100% of the issued and
outstanding common stock of American, no par value per share (the "American
Common Stock");
WHEREAS, American is primarily engaged in the seismic rock drilling
business in the Rocky Mountain region (the "Business");
WHEREAS, Omni is an oilfield service company providing an integrated range
of onshore seismic drilling, helicopter support and survey services to
geophysical companies operating in logistically difficult and environmentally
sensitive terrain in the United States, primarily along the U.S. Gulf Coast;
WHEREAS, Omni is currently undertaking the initial public offering (the
"Initial Public Offering") of shares of Omni common stock (the "Omni Common
Stock") pursuant to a Registration Statement on Form S-1 filed with the
Securities and Exchange Commission on September 26, 1997 (the "Registration
Statement"); and
WHEREAS, subject to the terms and conditions set forth herein, the parties
hereto have agreed to effect a tax-free merger of American with and into Omni
pursuant to section 368(a)(1)(A) of the Internal Revenue Code of 1986, as
amended.
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants, and agreements set forth herein, each of
the parties hereto agrees as follows:
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SECTION 1
MERGER OF AMERICAN INTO OMNI
1.1 The Merger. At the Effective Time (as hereinafter defined), in
accordance with the terms and subject to the conditions of this Agreement, the
Louisiana Business Corporation Law (the "LBCL") and the Montana Business
Corporation Act (the "Montana Act"), American will merge with and into Omni (the
"Merger"), the separate corporate existence of American shall cease and Omni
shall continue as the surviving corporation (sometimes referred to herein as the
"Surviving Corporation").
1.2 The Closing.
1.2.1 Unless this Agreement shall have been terminated pursuant
to the provisions hereof, and subject in each case to the satisfaction or waiver
of the conditions to closing specified in Section 6 hereof, the closing of the
transactions contemplated by this Agreement (the "Closing") shall take place at
the offices of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ at FirstNBC
Center, New Orleans, Louisiana, commencing at 9:00 a.m. local time on the
earlier to occur of (i) December 31, 1997, (ii) ten days following satisfaction
or waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby (other than conditions with respect to actions
the respective parties will take at the Closing itself) or (iii) such other date
as the Parties may mutually determine (such date being referred to herein as the
"Closing Date").
1.2.2 If all conditions set forth in Section 6 hereof are
satisfied or duly waived, at the Closing, (i) American will deliver to Omni the
certificates, instruments, and documents referred to in Section 2.1 below, (ii)
Omni will deliver to American the certificates, instruments, and documents
referred to in Section 2.2 below, (iii) Omni and American shall execute, deliver
and acknowledge the Certificate of Merger in the form attached hereto as Exhibit
1.2 and in such other form as may be required by the Montana Act or the LBCL
(the "Certificate of Merger"), and (iv) Omni will deliver to the Shareholders
the consideration to be paid in the Merger as provided in Sections 1.4 and 1.6
hereof.
1.3 The Effective Time; Effect of Merger.
1.3.1 The Merger shall be effective upon the filing of the
Certificate of Merger with the Secretary of State of Montana in accordance with
the Montana Act, or at such other time and date as is provided in the
Certificate of Merger pursuant to the mutual agreements of American and Omni
(hereinafter referred to as the "Effective Time"). Omni agrees that it shall
cause the Certificate of Merger to be filed in accordance with the Montana Act
and the LBCL as soon as practicable after the Closing. Upon the Effective Time
and by virtue of the Merger, the Surviving Corporation shall possess all the
rights, privileges and franchises possessed by American and shall be responsible
for all of the liabilities and obligations of American in the same manner as if
the Surviving Corporation had itself incurred such liabilities or obligations,
and the Merger shall have such other effects as may be specified in the
applicable provisions of the LBCL.
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1.3.2 Directors and Officers; Articles of Incorporation. After
the Effective Time and until their successors shall have been duly elected or
appointed, the directors and officers of Omni will be the directors and officers
of the Surviving Corporation. The Articles of Incorporation and By-laws of Omni,
as in effect immediately prior to the Effective Time, shall be the articles of
incorporation and by-laws of the Surviving Corporation after the Effective Time
until thereafter duly amended.
1.3.3 Financial Accounting Effect. For financial and tax
accounting and reporting purposes the Merger shall be effective as of October 1,
1997 and the respective financial, tax and accounting records and statements of
each party hereto shall be prepared as if such Merger were declared effective as
of October 1, 1997.
1.4 Conversion of American Shares. At and as of the Effective Date,
by reason of the Merger (a) all of the issued and outstanding shares of American
Common Stock, shall be converted into the right to receive that number of shares
of Omni Common Stock having an aggregate value of $2,500,000 based upon the
price at which such shares are sold to the public in the Initial Public Offering
and (b) all shares of American Common Stock, whether issued and outstanding or
held in treasury, shall be canceled. The shares of Omni Common Stock issued in
connection with the Merger shall be allocated between the Shareholders on a pro
rata basis based upon the number of shares of American Common Stock held by each
of them at the Effective Time as set forth in Schedule 1.4 hereof. Cash will be
issued in lieu of any fractional shares and will be similarly allocated between
the Shareholders.
1.5 Delivery and Exchange of Certificates. On the Closing Date, the
Shareholders shall deliver to Omni all certificates representing outstanding
shares of American Common Stock. Upon such delivery, Omni shall deliver to each
Shareholder a certificate representing the number of shares of Omni Common Stock
into which such shares will be converted at the Effective Time, as determined in
Section 1.4 hereof. Until so delivered, each certificate which represented
shares of American Common Stock before the Effective Time shall be deemed for
all purposes to represent the number of whole shares of Omni Common Stock into
which such shares shall have been converted in the Merger. Omni may, at its
option, refuse to pay any dividend or other distribution, if any, payable after
the Effective Time to the holders of shares of Omni Common Stock to the holders
of certificates evidencing undelivered shares of American Common Stock. Whether
or not a stock certificate representing shares of American Common Stock is
delivered as provided herein, from and after the Effective Time, such
certificate shall under no circumstances evidence, represent or otherwise
constitute any stock or interest in American or any person, firm or corporation
other than Omni.
1.6 Cash Consideration. In addition to the shares of Omni Common
Stock into which the outstanding shares of American Common Stock are convertible
as set forth in Section 1.4 hereof, at the Effective Time Omni will pay the
Shareholders by wire transfer according to their respective instructions an
aggregate of One Million Fifty Thousand and no/100 dollars ($1,050,000.00) cash,
which amount shall be allocated among the Shareholders on a pro rata based upon
the number of
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shares of American Common Stock held by each of them at the Effective Time as
set forth in Schedule 1.4 hereof.
SECTION 2
EVENTS OCCURRING ON THE CLOSING DATE
2.1 Deliveries by American and the Shareholders. On the Closing Date,
American will deliver to Omni the following:
2.1.1 A copy of the Articles of Incorporation of American,
certified by the Secretary of State of the State of Montana as of a date within
thirty (30) days of the Closing Date;
2.1.2 A certificate from the Secretary of State of the State of
Montana as of a date within thirty (30) days of the Closing Date as to the good
standing of American in such state;
2.1.3 A certificate of the Secretary of American, attaching
thereto a true and complete copy of its By-laws in effect on the Closing Date
and attesting to the incumbency of the person executing this Agreement on behalf
of American;
2.1.4 A certificate from the president of American and each of
the Shareholders stating that its and their respective representations and
warranties are true, complete and accurate in all material respects at and as of
the Closing Date;
2.1.5 The executed counterpart copies of all consents, approvals,
authorizations and permits, if any, from third parties as referred to in Section
3.1.25 hereof;
2.1.6 An Employment and Non-Competition Agreement between ▇▇▇▇▇
▇▇▇▇ and Omni, which agreement shall be in the form set forth in Exhibit 2.1
hereto (the "Employment Agreement");
2.1.7 ▇▇. ▇▇▇▇ will execute and deliver the Lease Agreement (as
hereinafter defined);
2.1.8 An opinion of legal counsel to American and the
Shareholders as to the due incorporation, existence and good standing of
American, its qualification to do business in Montana and any Material
Jurisdictions (as defined in Section 3.1.8 hereof), its power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and such other matters as shall be reasonably requested by
Omni; and
2.1.9 All other previously undelivered items required to be
delivered by American at or prior to the Closing Date pursuant to the terms of
this Agreement.
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2.2 Deliveries by Omni. On the Closing Date, Omni will deliver the
following to the Shareholders:
2.2.1 The shares of Omni Common Stock as set forth in Section
1.4.
2.2.2 The cash consideration set forth in Section 1.6.
2.2.3 The Employment Agreement.
2.2.4 The Lease Agreement.
2.2.5 Any consents required by Section 6.3.1.
2.2.6 The legal opinion required by Section 6.3.5.
2.2.7 The officer's certificate required by Section 6.3.4.
2.2.8 The incumbency certificate required by
Section 6.3.2.
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of American and the Shareholders.
Each Shareholder, with respect to matters relating to themselves and their
respective American Common Stock, represents and warrants to and agrees with
Omni as set forth as follows in Sections 3.1.1 through 3.1.6 and the
Shareholders, acting jointly and severally, represent and warrant to and agree
with Omni as follows with respect to the matters set forth in Sections 3.1.7
through 3.1.30.
3.1.1 Ownership. Each Shareholder is, and at the Effective Time
will be, the record and beneficial owner of the number of shares of American
Common Stock, which are represented by the certificates bearing the numbers,
shown opposite their respective names in Schedule 1.4 hereof. Each Shareholder
has, and at the Effective Time, will have good and marketable title to all such
shares and the absolute right to deliver such shares in accordance with the
terms hereof, free and clear of all liens, pledges and encumbrances of any kind.
Each Shareholder has the power, authority and capacity necessary to approve the
Merger, execute and deliver this Agreement and perform its obligations under
this Agreement.
3.1.2 Pending Actions. As of the date hereof there are, and at
the Effective Time there will be, no actions, suits or proceedings pending or
threatened involving the ownership by the Shareholders of their respective
shares of American Common Stock or their ability to approve the Merger pursuant
to this Agreement.
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3.1.3 No Other Agreements. Except for this Agreement, the
Employment Agreement, the Lease Agreement, and certain agreements regarding
employee benefits and other matters ancillary to the Employment Agreement, there
are no contracts, agreements, arrangements or understandings between any
Shareholder and Omni relating to American or the transactions contemplated by
this Agreement. No Shareholder is a party to any agreement with respect to the
voting, sale or transfer of any of the American Common Stock or the issuance of
any additional shares of American capital stock or the redemption of any such
stock.
3.1.4 Restrictions on Resale; Investment Intent.
(i) Each Shareholder is acquiring the Omni Common Stock to
be received in connection with the Merger for investment for their own account
and has no present intention of reselling or otherwise distributing or
participating in a distribution of such stock. Each Shareholder understands that
the shares of Omni Common Stock to be issued in the Merger will not be
registered under the Securities Act of 1933, as amended (the "Securities Act"),
that such shares will be "restricted securities" as that term is defined in Rule
144 ("Rule 144") promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act, and that the Shareholder cannot transfer
any of such shares unless they are subsequently registered under the Securities
Act and under any applicable state securities law or are transferred in a
transfer that, in the opinion of counsel satisfactory to Omni, is exempt from
such registration. Each Shareholder further understands that Omni is not
obligated by this Agreement to register such shares under the Securities Act or
under any such state laws and that Omni will, as a condition to the transfer of
any such shares, require that the request for transfer be accompanied by an
opinion of counsel, in form and substance satisfactory to Omni, to the effect
that the proposed transfer does not result in a violation of the Securities Act
or any applicable state securities law, unless such transfer is covered by an
effective registration statement. Each Shareholder understands that such shares
of Omni Common Stock may not be sold publicly in reliance on the exemption from
registration under the Securities Act afforded by Rule 144 unless and until the
minimum holding period and other requirements of Rule 144 have been satisfied.
(ii) Each Shareholder has been represented by competent and
experienced legal counsel in connection with the negotiation and execution of
this Agreement, has been granted the opportunity to make a thorough
investigation of and to obtain information with respect to the affairs of Omni
and their acquisition of Omni Common Stock, and has availed himself or herself
of such opportunity either directly or through its legal counsel and other
authorized representatives.
(iii) Each Shareholder has been advised that the shares of Omni
Common Stock issued hereunder have not been and are not being registered under
the Securities Act and that Omni in issuing such shares is relying upon, among
other things, the representations and warranties of the Shareholders contained
in this Section in concluding that such issuance does not require compliance
with the registration provisions of the Securities Act.
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(iv) Each Shareholder understands and agrees that all
certificates evidencing the shares of Omni Common Stock issued hereunder will
bear restrictive legends in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or any applicable state law, and may not be transferred
without registration under the Act and any such state law or an
opinion of counsel satisfactory to the corporation that
registration is not required.
3.1.5 Information. The Shareholders acknowledge that (i) they have
received and have reviewed to their satisfaction this Agreement, the
Registration Statement and such additional material information with respect to
the Merger and Omni, if any, as each of them has requested and (ii) such
information is sufficient for them to determine objectively whether to approve
the Merger and enter into this Agreement.
3.1.6 Capitalization and Ownership. The authorized capital stock
of American consists of 50,000 shares of common stock, no par value per share,
of which 100 shares are issued and outstanding. All of the issued and
outstanding shares of such common stock have been duly authorized and are
validly issued fully paid and non-assessable. There are no outstanding
warrants, options, rights, calls or other commitments of any nature relating to
any share of capital stock of American, and there are no outstanding securities
or debt obligations of American convertible into shares of capital stock of
American. Other than the shares of American Common Stock listed in Schedule
1.4, there are no shares of American capital stock outstanding.
3.1.7 Organization.
(i) American is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Montana, with the corporate power
and authority to own, lease, and operate its properties and to carry on its
business as now being conducted.
(ii) The copy of the Articles of Incorporation and all amendments
thereto of American, as certified by the Secretary of State of the State of
Montana, and the By-laws, as amended to date, of American, as certified by its
Secretary and delivered to Omni, are true, complete, and correct copies of the
respective Articles of Incorporation and By-laws, as amended and currently in
effect, of American.
3.1.8 Qualification. American is licensed or qualified to do
business as a foreign corporation and is in good standing in the jurisdictions
in which it conducts its business, except where the failure to so qualify would
not have a material adverse effect on the business or financial condition of the
Business taken as a whole (the "Material Jurisdictions").
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3.1.9 Authority. American has the corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by American of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors and shareholders of American; no other
corporate proceedings on the part of American or any other person or entity,
whether pursuant to the Articles of Incorporation or By-laws of American or by
law or otherwise, are necessary to authorize American to enter into this
Agreement, or to consummate the transactions contemplated hereby; and this
Agreement is the legal, valid, and binding obligation of American (and the
Shareholders, as the case may be). This Agreement has been duly executed and
delivered by American and the Shareholders and constitutes a valid and binding
obligation of American and the Shareholders, enforceable against each of them in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights
generally, (ii) the remedy of specific performance and injunctive relief are
subject to certain equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought, and (iii) rights to
indemnification hereunder may be limited under applicable securities laws.
3.1.10 No Conflict. Except as set forth in Schedule 3.1.10 hereof
(the items listed in such Schedule being referred to herein as "Permitted
Encumbrances"), neither the execution and the delivery of this Agreement by
American and the Shareholders, nor the consummation of the transactions
contemplated hereby do or will (i) violate, conflict with, or result in a breach
of any provisions of, (ii) constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, (iii) result in the
termination of or accelerate the performance required by, (iv) result in the
creation of any lien, security interest, charge, claim, mortgage or encumbrance
(collectively referred to hereafter as "Encumbrances") upon any of American's
properties or assets under any of the terms, conditions or provisions of
American's Articles of Incorporation or By-laws or any note, bond, mortgage,
indenture, deed of trust, lease, license, loan agreement or other instrument or
obligation to or by which American, the Shareholders or any of its or their
assets are bound, or (v) violate any order, writ, injunction, decree, statute,
rule or regulation of any governmental entity applicable to either American, the
Shareholders or any of their respective assets, except for any such conflict,
breach, termination, acceleration, default or Encumbrance which would not have a
material adverse effect on (A) the business, assets or financial condition of
American or (B) American's or the Shareholder's ability to consummate any of the
transactions contemplated hereby.
3.1.11 Financial Statements. American has heretofore delivered to
Omni its balance sheet as of March 31, 1997 (the "Balance Sheet"), and the
related statement of operations for the three months ended March 31, 1997,
together with its balance sheet as of December 31, 1996 and the related
statement of operations for the year then ended. The financial statements
referred to in the preceding sentence are hereinafter collectively referred to
as the "Financial Statements." Each of the Financial Statements was prepared
from the books and records of American in conformity with generally accepted
accounting principles consistently applied, and fairly present the financial
condition and results of operations of American for the period and as of the
dates stated therein.
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Except to the extent reflected in the Financial Statements, American has no
liabilities or obligations required to be reflected in the Financial Statements
(or the notes thereto) in accordance with generally accepted accounting
principles other than current liabilities incurred in the ordinary course of
business, consistent with past practice subsequent to March 31, 1997.
3.1.12 Absence of Certain Changes or Events. Except as set forth
in Schedule 3.1.l2 hereto, since March 31, 1997 (the "Balance Sheet Date"),
American has operated the Business in the ordinary course consistent with past
practice, and neither American nor the Business has:
(i) Suffered any material adverse change in its business or any event
or condition of any character, which individually or in the aggregate, has had
or might reasonably be expected to have a material adverse effect on the
business or financial condition of the Business taken as a whole;
(ii) Incurred any obligations or liabilities (absolute, accrued,
contingent, or otherwise) or entered into any transactions, commitments or
agreements other than in the ordinary course of business and consistent with
past practice;
(iii) Paid, discharged, or satisfied any claims, obligations, or
liabilities (absolute, accrued, contingent, or otherwise), except the payment,
discharge, or satisfaction in the ordinary course of business and consistent
with past practice of any claims, obligations, and liabilities (i) which are
reflected or reserved against in the Financial Statements or (ii) which were
incurred in the ordinary course of business and consistent with past practice
since the Balance Sheet Date;
(iv) Permitted or allowed any of its properties or assets, whether
tangible or intangible, to be subjected to any Encumbrances or other liabilities
and obligations;
(v) Written off as uncollectible, or canceled or waived, any accounts
receivable or any portion thereof, or any debts or claims, except in the
ordinary course of business and consistent with past practice;
(vi) Sold, conveyed, or otherwise disposed of any properties or
assets, except for fair consideration in the ordinary course of business and
consistent with past practice;
(vii) Disposed of or permitted to lapse any item of intangible
property, or any license, permit, or other form of authorization to use any
intangible property;
(viii) Except for normal increases that are not material and are
consistent with past practice, granted or agreed to grant any increase in the
compensation of any employee (including any such increase pursuant to any bonus,
pension, profit sharing or other plan or commitment), or become a party to or
instituted any new benefit programs for any employee;
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(ix) Made any change in any method of accounting or accounting
practice or in any Tax (as such term is defined in Section 8.2 of this
Agreement) procedures or elections;
(x) Terminated or suffered a termination of (excluding a termination
in accordance with its terms) or amended, any material contract, agreement,
license, or lease;
(xi) Declared, paid, or made, or set aside for payment or making, any
dividend or other distribution in respect of the capital stock of American or,
directly or indirectly, redeemed, purchased, or otherwise acquired any of the
capital stock of American;
(xii) Suffered any damage, destruction or casualty loss to the
physical properties of American (whether or not covered by insurance),
materially and adversely affecting the business, operations, prospects or
financial condition of American; or
(xiii) Agreed, whether in writing or otherwise, or made any
arrangement, whether or not legally binding, to take any action which, if taken
prior to the date hereof, would have served to make false any of the statements
contained in clauses (i) through (xiii) of this Section 3.1.12.
3.1.13 Certain Tax Matters.
(i) All income taxes, unemployment, social security, franchise, real
property, personal property and all other taxes levied, assessed or imposed upon
American in connection with American's operation of the Business by the United
States, or any state, or governmental subdivision of either, to the extent due
and payable, have been duly paid to date or are being contested through
appropriate administrative or judicial procedures, and no liability for
deficiencies with respect thereto exists. There are no tax audits pending nor
any outstanding agreements or waivers extending the statutory period of
limitations applicable to any federal, state or local income tax return for any
period in connection with American's operation of the Business. No tax
deficiencies have been determined nor proposed tax assessments charged against
American (nor is there any basis therefor) in connection with American's
operation of the Business. American has filed all federal, state, local, sales,
franchise, withholding, real and personal property tax returns required to be
filed in connection with American's operation of the Business. No penalties or
other charges are, or will become, due with respect to the late filing of any
return by American in connection with American's operation of the Business.
True, correct and complete copies of the state and local real property and
personal property tax returns of American in connection with American's
operation of the Business for American's last three fiscal years have been
delivered to Purchaser.
(ii) American:
(x) Is not subject to any liens for Taxes on its assets;
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(y) Is not currently under any contractual obligation to pay the
Tax obligations of, or with respect to transactions relating to, any other
person or to indemnify any other person with respect to any Tax;
(z) Is not subject to any (A) claims, audits, actions, suits,
proceedings, or investigations with respect to any Tax or assessment for which
the Purchaser could be liable, which would be material to the Business, and (B)
requests for rulings in respect of any Tax or any proposed transaction pending
before any Taxing Authority (as defined in Section 8.2 of this Agreement).
(iii) Neither of the Shareholders is aware of any facts that could
give rise to any claim, audit, action, suit, proceeding, or investigation with
respect to any material Tax or assessment for which Omni could be liable and
which would be material.
(iv) No Tax or assessment will be assessed on or after the Effective
Time against or pertaining to American or any assets of the Business for any tax
period ending on or prior to the Effective Date, or for any period ending after
the Effective Date with respect to any portion of such tax period that includes
or is prior to the Effective Date, other than Taxes disclosed in the Financial
Statements.
3.1.14 Condition of Facilities. The facilities and other property
owned or leased by American, including equipment, furniture, vehicles and other
tangible personal property owned or held or used in the conduct of the Business
(collectively, the "Assets"), are in good operating condition and repair,
ordinary wear and tear excepted, and are in adequate working order for the
continued conduct of the Business as it is currently conducted. Other than as
disclosed herein, neither of the Shareholders has knowledge of any condition or
defect, in any of the Assets which would materially affect the fair market
value, use or operation of the Business.
3.1.15 Receivables; Payables.
(i) Schedule 3.1.15 sets forth a list of all accounts and notes
receivable accrued in connection with the operation of the Business as of the
Effective Date that have a balance of in excess of $5,000, their respective
balances and an accurate aging thereof. (Such notes and receivables are
referred to collectively as "Receivables"). The Receivables have been earned
and recorded in the ordinary course of business consistent with past practices,
and no Receivables are subject to any counterclaim or offset. None of the
Receivables has been sold, transferred, or otherwise disposed of by American and
all are fully collectible. Other than those Receivables set forth in Schedule
3.1.15, there are no accounts or notes receivable by American which either
individually or in the aggregate are material to the Business.
(ii) Schedule 3.1.15 contains an aging schedule of all accounts and
trade payables of the Business as of the Effective Date that have a balance of
in excess of $5,000, including the dollar amounts thereof (such accounts and
trade payables being referred to as
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"Accounts Payable"). All such payables of American have arisen in the ordinary
course of business, and no such payables are more than 45 days past due, except
for those account or trade payables with respect to which there is an amount
disputed in good faith and which are marked "Disputed" on Schedule 3.1.15. All
Accounts Payable are accurately reflected in the Financial Statements. Other
than those Accounts Payable set forth in Schedule 3.1.15, there are no accounts
or trade payables by American which either individually or in the aggregate are
material to the Business.
3.1.16 Title to Properties; Encumbrances. Except as set forth in
Schedule 3.1.16 hereto,
(i) American has good and marketable title to all of the Assets,
free and clear of all Encumbrances, except for Permitted Encumbrances.
(ii) Since the Balance Sheet Date,
(x) American has incurred no indebtedness or liabilities
with respect to any of the Assets except those listed as Permitted Encumbrances;
(y) American has not received any notice of default under
any of its liabilities, nor, is any such notice pending or do reasons exist for
the giving of such notice.
3.1.17 Leases.
(i) Schedule 3.1.17 contains a list of each lease pursuant to
which American leases real or personal property (collectively, the "Leases").
(ii) Each of the Leases is in full force and effect in
accordance with its terms, no Lease has been modified or amended in writing, and
American has not received any written notice of any breach or default with
respect to a Lease.
3.1.18 Patents, Trademarks, and Similar Rights.
(i) American has the sole and exclusive right to use all patents,
copyrights, trademarks, trade names, technology, know-how, processes, trade
secrets, inventions, proprietary data, formulae, research and development data,
computer software programs, and other intangible property, and any applications
for the same, owned by American or the Shareholders and used in the Business,
and all goodwill associated with such intangible property (collectively, the
"Intangible Property"), and the consummation of the transactions contemplated by
this Agreement will not alter or impair any such rights;
(ii) American has the right to use all Intangible Property which is
currently used by American in connection with the Business either as provided in
clause (i) above or as
12
licensed or authorized by others, and the consummation of the transactions
contemplated by this Agreement will not alter or impair any such rights;
(iii) No claims have been asserted by any person or entity for the use
of any such Intangible Property or challenging or questioning the validity or
effectiveness of any such license or agreement, and the Shareholders have no
knowledge of any valid basis for any such claim;
(iv) The use of such Intangible Property by American does not infringe
on the rights of any person or entity and no proceedings have been instituted,
are pending, or threatened that challenge the rights of American in respect
thereof; and
(v) None of American's Intangible Property rights, to the best of the
Shareholders' knowledge, are being infringed by the products, activities,
operations, trade names, trademarks, service marks, trade dress rights or
copyrights of any other person or persons and none are subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof.
3.1.19 Insurance. American has heretofore made available for
inspection by Omni a true and complete copy of all policies of fire, liability,
workers' compensation, and other forms of insurance owned or held by American.
All such policies are in full force and effect, all premiums with respect
thereto covering all periods up to and including the Closing Date have been
paid, and no notice of cancellation or termination has been received with
respect to any such policy. Such policies are in such amounts and insure against
such losses and risks and provide such coverage as, in the opinion of American,
is adequate to protect the Business as it is currently conducted.
3.1.20 No Benefit Plans; Absence of PBGC Lien. Except for
American's 401(k) plan and its disability and hospitalization plan, which will
be continued or replaced by Omni for at least twelve (12) months after the
Effective Date of this Agreement, neither American nor any Affiliate (as defined
in Section 8.2 of this Agreement) maintains any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder, that covers
any employee or former employee of American. None of the Assets are subject to a
lien in favor of the Pension Benefit Guaranty Corporation.
3.1.21 Documents; Commitments.
(i) The Shareholders have delivered or made available to Omni the
following documents, each of which is true and complete:
(A) Copies of all documents listed in Schedule 3.1.21, which is
a listing of every material contract, agreement, or other commitment, written or
oral, to which American is a party or has succeeded to a party by assumption or
assignment or in which it has a beneficial interest. For the purposes of this
Agreement, any contract or agreement shall be deemed material if the Business
taken as a whole is substantially dependent upon it, if it involves a financial
13
obligation of or benefit to the Business in excess of $100,000, if the contract
is not made in the ordinary course, or if it constitutes a management contract
or employment contract (excluding oral agreements that arise by operation of
law), but excluding quotations given to customers of American in connection with
estimates of the cost of future work; and
(B) Copies of all product bulletins, technical bulletins, or
other advertising or sales materials currently used in connection with the
Business.
(ii) American does not have (A) any outstanding sales contracts
or commitments that are reasonably expected to result in any loss to the
Business upon completion of performance thereof or (B) any outstanding bids or
sales or service proposals quoting prices that are not reasonably expected to
result in a profit consistent with past practice.
(iii) American is not restricted by agreement from carrying on
the Business anywhere in the world.
3.1.22 Labor Matters.
(i) Neither American nor any employee employed by American is a
party to or is covered by any labor agreement with any collective bargaining
representative representing employees of American.
(ii) American is operating in material compliance with all
applicable law respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and is not engaged in any unfair
labor practices and no charges or proceedings before the National Labor
Relations Board, or similar agency, exist or are threatened.
(iii) There are no unfair labor practice complaints, labor
disputes, work stoppages, or union organization efforts, or threats of the
foregoing, directed against any of the operations of the Business.
(iv) No legal proceedings, charges, complaints, or similar
actions exist under any federal, state or local laws affecting the employment
relationship including, but not limited to: (A) antidiscrimination statutes such
as Title VII of the Civil Rights Act of 1964, as amended (or similar state or
local laws prohibiting discrimination because of race, sex, religion, national
origin, age and the like); (B) the Fair Labor Standards Act or other federal,
state or local laws regulating hours of work, wages, overtime and other working
conditions; (C) requirements imposed by federal, state or local governmental
contracts such as those imposed by Executive Order 11246; (D) state laws with
respect to tortious employment conduct, such as slander, false light, invasion
of privacy, negligent hiring or retention, intentional infliction of emotional
distress, assault and battery, or loss of consortium; or (E) the Occupational
Safety and Health Act, as amended, as well as any similar state laws, or other
regulations respecting safety in the workplace; no proceedings, charges, or
complaints are threatened under any such laws or regulations and no facts
14
or circumstances exist which would give rise to any such proceedings, charges,
complaints, or claims, whether valid or not.
(v) With respect to each person employed by American on or after
December 31, 1995, and who actually commenced such employment on or after
November 6, 1986, (i) American hired such person in compliance with the
Immigration Reform and Control Act of 1986 and the rules and regulations
thereunder ("IRCA") and (ii) American has complied with all record keeping and
other regulatory requirements under IRCA.
(vi) American has not incurred any liability or obligation under the
Worker Adjustment and Retraining Notification Act or similar state laws.
American has not laid off more than ten percent (10%) of its employees at any
single site of employment in any ninety (90) day period during the twelve (12)
month period ending as of the Closing Date. It shall be the obligation of the
Shareholders to provide any notice required by said Act by reason of the
provisions, execution or operation of this Agreement.
(vii) To the best of the Shareholders' knowledge, American is in full
compliance with the provisions of the Americans with Disabilities Act (the
"ADA") as of the Closing Date.
3.1.23 Personnel.
(i) Schedule 3.1.23 sets forth (A) the name and current annual
salary (or rate, if an hourly or day rate employee) and other compensation
(including, without limitation, normal bonus, profit sharing and other
compensation) now payable by American to each employee, (B) any increase to
become effective after the date of this Agreement in the total compensation or
rate of total compensation payable by American to each such person, (C) all
presently outstanding loans and advances (other than routine travel advances to
be repaid or formally accounted for within sixty (60) days) made by American to,
or made to American by, any director, officer or employee, (D) all other
material transactions between American and any director, officer or employee of
American since March 31, 1997, and (E) all accrued but unpaid vacation pay and
any other compensation owing to any officer or employee which is not disclosed
on the Financial Statements. Full payment has been made of all compensation and
other employee benefit amounts which American was required to have paid to each
employee (including all accrued vacation pay) on or prior to the Closing Date
(excluding any amounts not yet due).
(ii) American's relationship with its respective employees is
good and the Shareholders have no knowledge of any facts which would indicate
that American's employees will not continue in its employ following the Closing.
3.1.24 No Breach.
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(i) Each Permit, contract, agreement, deed of trust, lease, policy,
license, plan, commitment, arrangement, and understanding (whether evidenced by
a written document or otherwise) referred to in this Agreement or in any
Schedule or Exhibit hereto or which is otherwise material to the Business, under
which American has any right, interest, or obligation (A) is in full force and
effect and (B) is not subject to any threatened amendment, cancellation, or
outstanding dispute.
(ii) American is not in breach of, and there does not exist any
default or event (including the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby) which, with the giving of
notice or the lapse of time or both, would become a breach or default, and there
is no basis for any valid claim of a default in any respect with regard to any
contracts or agreements which may be affected by the execution of this
Agreement.
3.1.25 Consents, Permits, Etc. Except as set forth in Schedule
3.1.25, no consent, approval, authorization, or permit from any person, entity
or governmental authority is necessary to the consummation of the transactions
contemplated by this Agreement. All such consents, permits, approvals and
authorizations listed in Schedule 3.1.25 have been either obtained or waived.
3.1.26 Litigation. There is no litigation, proceeding,
arbitration, administrative or other proceeding or audit, inquiry or
investigation pending, or controversy (an "Action") pending, or to the best
knowledge of the Shareholders, threatened by or against, or involving American
or any directors, officers, or employees thereof in their capacity as such or
that question or challenge the validity of this Agreement, or any action taken
or to be taken by the Shareholders pursuant to this Agreement or in connection
with the transactions contemplated hereby, and to the knowledge of the
Shareholders, there is no valid basis for any such Action. No such Action
would, if adversely decided, have a material adverse effect on the Business
taken as a whole or, after the Closing Date, on the ability of Omni to conduct
the Business.
3.1.27 Compliance With Applicable Law; Adverse Restrictions.
Except as set forth in Schedule 3.1.27 hereto, the operations of American are
being conducted in material compliance with (i) all applicable Permits,
licenses, orders, writs, injunctions, judgments, decrees, or awards of all
courts and governmental and regulatory authorities, and (ii) to the knowledge of
the Shareholders, all laws (statutory or otherwise), ordinances, rules,
regulations, by-laws, and codes of all governmental and regulatory authorities,
whether federal, state, or local (individually, a "Law" and collectively,
"Laws") that are applicable to the Assets or the Business (including, without
limitation, those related to public or occupational safety, pollution and
protection of the environment, and hazardous or other waste disposal). American
has not received any written notification of any asserted present failure to
comply with any Law, except for failures that in the aggregate are not and were
not material to the conduct of the Business as a whole and which American has
taken steps to correct or contest in good faith.
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3.1.28 Customers and Suppliers.
(i) Since March 31, 1997, there has not been any adverse change in the
business relationship of American with any customer, distributor, or supplier
that is material to the business or financial condition of the Business taken as
a whole. To the knowledge of the Shareholders, no customer or supplier of
American will cease to do business with the Business after the consummation of
the transactions contemplated hereby, which cessation would have a material
adverse effect on the business, operations or financial condition of the
Business. American has not experienced any difficulties in obtaining any
inventory, supplies, equipment or other items necessary to the operation of its
business, and, to the knowledge of the Shareholders, no such shortage of supply
of inventory, supplies, equipment or other items is threatened or pending.
American is not required to provide any bonding or other financial security
arrangements in any material amount in connection with any transactions with any
of its customers or suppliers.
(ii) Except as set forth in Schedule 3.1.28 hereto, no shareholder,
officer, director or employee of American, nor any spouse or child of any of
them, has any direct or indirect interest in any competitor, supplier or
customer of American or in any person from whom or to whom American leases any
real or personal property, or in any other person with whom American is doing
business.
3.1.29 Environmental Laws and Regulations. Except as set forth in
Schedule 3.1.29,
(i)(A) The ownership and operations of the "Subject Property," as
defined below, and any use, storage, treatment, disposal, or transportation of
"Hazardous Substances," as defined below, that has occurred in or on the Subject
Property while owned by the Shareholders but prior to the date of this Agreement
have been in compliance with "Environmental Requirements," as defined below; (B)
during the ownership, occupancy and operation of the Subject Property by
American, or, to the knowledge of the Shareholders, prior to American's
ownership, occupancy or operation, no release, leak, discharge, spill, disposal,
or emission of Hazardous Substances has occurred in, on, or under the Subject
Property in a quantity or manner that violates or requires further investigation
or remediation under Environmental Requirements; (C) to the best of the
Shareholders' knowledge, the Subject Property is free of Hazardous Substances as
of the date of this Agreement; (D) there is no pending or threatened litigation
or administrative investigation or proceeding concerning the Subject Property
involving Hazardous Substances or Environmental Requirements; and (E) to the
best of the Shareholders' knowledge, there is no ACM (as defined below), within
the Subject Property, whether friable or non-friable, and there are no above-
ground or underground storage tank systems ("Tank Systems") located at the
Subject Property.
(ii) Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Environmental Requirements" means all laws, statutes, rules, regulations,
ordinances, guidance documents, judgments, decrees, orders, agreements and other
17
restrictions and requirements (whether now or hereafter in effect) of any
governmental authority, including, without limitation, federal, state, and local
authorities, relating to the regulation or protection of human health and
safety, natural resources, conservation, the environment, or the storage,
treatment, disposal, transportation, handling, or other management of industrial
or solid waste, hazardous waste, hazardous or toxic substances or chemicals, or
pollutants.
"Hazardous Substance" means (i) any "hazardous substance" as defined in
101(14) of the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended from time to time (42 U.S.C. (S)(S) 9601 et
seq.)("CERCLA") or any regulations promulgated thereunder; (ii) petroleum and
petroleum by-products; (iii) asbestos or asbestos-containing material ("ACM");
or (iv) any additional substances or materials which have been or are currently
classified or considered to be pollutants, hazardous or toxic under
Environmental Requirements.
"Subject Property" means any and all immovable property owned by, leased by
or used by American in connection with the Business or otherwise at any time
during its corporate existence.
3.1.30 Effectiveness of Representations and Warranties. All of the
representations and warranties of American and the Shareholders in this
Agreement shall be true in all material respects on the Closing Date and shall
be deemed to have been made again by each of them on and as of the Closing Date.
3.2 Representations and Warranties of Omni. Omni represents and warrants
to each of the Shareholders as follows:
3.2.1 Completeness and Accuracy of Registration Statement. The
Registration Statement contains a complete and accurate description of Omni's
business and financial condition as of the date thereof.
3.2.2 Validity of Omni Common Stock. The shares of Omni Common
Stock to be issued to the Shareholders in the Merger shall be duly authorized,
fully paid and non-assessable.
3.2.3 Organization.
(i) Omni is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Louisiana, with the corporate
power and authority to own, lease, and operate its properties and to carry on
its business as now being conducted.
(ii) The copy of the Articles of Incorporation and all
amendments thereto of Omni, as certified by the Secretary of State of the State
of Louisiana, and the By-laws, as amended to date, of Omni, as certified by its
Secretary and delivered to the Shareholders, are true,
18
complete, and correct copies of the respective Articles of Incorporation and By-
laws, as amended and currently in effect, of Omni.
3.2.4 Qualification. Omni is licensed or qualified to do business as a
foreign corporation and is in good standing in the jurisdictions in which it
conducts its business, except where the failure to so qualify would not have a
material adverse effect on the business or financial condition of Omni taken as
a whole.
3.2.5 Authority. Omni has the corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by Omni of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors and shareholders of Omni; no other corporate
proceedings on the part of Omni or any other person or entity, whether pursuant
to the Articles of Incorporation or By-laws of Omni or by law or otherwise, are
necessary to authorize Omni to enter into this Agreement, or to consummate the
transactions contemplated hereby; and this Agreement is the legal, valid, and
binding obligation of Omni. This Agreement has been duly executed and delivered
by Omni and constitutes a valid and binding obligation of Omni, enforceable
against it in accordance with its terms, except that (i) such enforcement may be
subject to bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally, (ii) the remedy of specific performance and
injunctive relief are subject to certain equitable defenses and to the
discretion of the court before which any proceedings therefor may be brought,
and (iii) rights to indemnification hereunder may be limited under applicable
securities laws.
3.2.6 Effectiveness of Representations and Warranties. All of the
representations and warranties of Omni in this Agreement shall be true in all
material respects on the Closing Date and shall be deemed to have been made
again by it on and as of the Closing Date.
SECTION 4.
PRE-CLOSING COVENANTS
4.1 Access to Properties and Records. Until the Effective Time, American
and each of the Shareholders shall allow Omni and its authorized representatives
full access, during normal business hours and on reasonable notice, to all of
American's plants, properties, offices, vehicles, equipment, inventory and other
assets, documents, files, books and records, in order to allow Omni a full
opportunity to make such investigation and inspection as they desire of the
Business and assets. American and the Shareholders shall further use their best
efforts to cause the employees, counsel and regular independent certified public
accountants of American to be available upon reasonable notice to answer
questions of Omni's representatives concerning the business and affairs of
American, and shall further use their best efforts to cause them to make
available all relevant books and records in connection with such inspection and
examination, including without limitation work papers for all audits and reviews
of financial statements of American.
19
4.2 Conduct of Business. From and after the date of this Agreement and
until the Closing Date, each of American and Omni shall conduct their respective
businesses in the ordinary course and consistently with past practice, except as
expressly required or otherwise permitted by this Agreement, and shall not take
or permit any action which would cause any of the representations made in
Section 3 not to be true and correct on the Closing Date.
4.3 Public Statements. Prior to the Effective Time, none of the parties
to this Agreement shall, and each party shall use its best efforts so that none
of its advisors, officers, directors or employees shall, except with the prior
written consent of the other parties, publicize, announce or describe to any
third person, except their respective advisors and employees, the execution or
terms of this Agreement, the parties hereto or the transactions contemplated
hereby, except as required by law or as required pursuant to this Agreement to
obtain the consent of such third person; provided, in any case, that Omni may
make such disclosures and announcements as may be necessary or advisable under
applicable securities laws.
4.4 No Solicitation. The Shareholders and American will not, prior to
the Effective Time or the termination of this Agreement pursuant to Section 7,
(nor will they permit any of their affiliates or any of American's officers,
directors or agents to) directly or indirectly solicit or participate or engage
in or initiate any negotiations or discussions, or enter into or authorize any
agreement or agreements in principle, or announce any intention to do any of the
foregoing, with respect to any offer or proposal to acquire all or any
significant part of American's business and properties or any of its capital
stock whether by merger, purchase of assets, purchase of stock or otherwise.
The Shareholders and American will notify Omni promptly upon receipt of any
inquiry, offer or other communication from any third party regarding any such
activities.
4.5 No Stock Splits or Dividends. American shall not declare or pay any
dividend on or permit any reclassification or recapitalization with respect to
shares of American capital stock, or the establishment of a record date for any
of the foregoing, to occur during the period between the date of this Agreement
and the Effective Time.
4.6 Notification as to Representations. Each of the parties hereto will
promptly disclose in writing to the other any information contained in its
representations and warranties or on the schedules related thereto that, because
of an event occurring after the date hereof, is incomplete or no longer correct.
Such disclosure will not be deemed to modify the representations and warranties
of such party or such schedule, as the case may be.
SECTION 5
ADDITIONAL AGREEMENTS
5.1 Legal Requirements to Merger. Subject to the conditions set forth in
Section 6 and to the other terms and provisions of this Agreement, each of the
parties to this Agreement agrees to take, or cause to be taken, all reasonable
actions necessary to comply promptly with all legal requirements applicable to
each of them with respect to the Merger and will promptly cooperate with
20
and furnish information to each other in connection with any such requirements
imposed upon any of them in connection with the Merger. Each of American, the
Shareholders and Omni will take all reasonable actions necessary to obtain, and
will cooperate with each other in obtaining, any consent, authorization, order
or approval of, or any exemption by, any governmental entity or other public or
private party, required to be obtained or made by it in connection with the
Merger or the taking or any action contemplated by this Agreement.
5.2 Further Assurances. After the Effective Time, each of American, the
Shareholders and Omni will, at their own expense, take all appropriate action
and execute all documents, instruments or conveyances which may be reasonably
necessary to carry out the provisions of this Agreement.
5.3 Expenses, Transfer Taxes, Etc. Whether or not the transactions
contemplated by this Agreement shall be consummated, all fees and expenses
(including all fees of counsel, actuaries, accountants and other experts)
incurred by any party in connection with the negotiation and execution of this
Agreement shall be borne by such party.
5.4 Confidentiality. Until the Effective Time and subsequent to the
termination of this Agreement pursuant to Section 7, each of the parties will
keep confidential and will not disclose to any third party any information
obtained by it in connection with this Agreement except (a) that information may
be disclosed by the parties to their advisors in connection with the
negotiation of and the activities conducted pursuant to this Agreement, (b) to
the extent that such information is or becomes generally available to the public
through no act or omission of Omni in violation of this Agreement and (c) to the
extent permitted by Section 4.3 hereof.
5.5 Employment Agreements. At the Closing, each of Omni and ▇▇. ▇▇▇▇ will
execute and deliver the Employment Agreement.
5.6 Corporate Name. After the Effective time, the Surviving Corporation
shall have the right to use the corporate name "American Helicopter Drilling
Inc." and any derivatives or combinations thereof and none of the Shareholders
shall use or attempt to use such name or any derivative or combination thereof
as the corporate name of a corporation, partnership or other entity, an assumed
name, a trade name or in any other manner.
5.7 Lease Agreement. Shareholders agree to lease to Omni and Omni agrees
to lease from Shareholders all of the lands and buildings on which American's
operations are conducted as of the date hereof or on which they are being
conducted as of the Closing Date. The terms of such lease shall be as set forth
in the Lease Agreement attached hereto as Exhibit 5.7 (the "Lease Agreement").
5.8 Retention of American Employees. Omni agrees that it intends to
retain each of the American employees listed in Schedule 3.1.23 subsequent to
the Closing; provided that nothing in this Section 5.8 shall in any way restrict
Omni's right to terminate any of such employees for cause.
21
SECTION 6
CONDITIONS
6.1 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 satisfaction or, where permissible, waiver by such party of the following
conditions at or prior to the Effective Time:
6.1.1 No statute, rule, regulation, executive order, decree,
preliminary or permanent injunction or restraining order shall have been
enacted, entered, promulgated or enforced by any court of competent jurisdiction
or other governmental entity which prohibits or restricts the consummation of
the Merger and no action, suit, claim or proceeding by a state or federal
governmental entity before any court or other governmental entity shall have
been commenced and be pending which seeks to prohibit or restrict the
consummation of the Merger, other than actions, suits, claims and proceedings
which, in the reasonable opinion of counsel to the parties hereto, are unlikely
to result in an adverse judgment; provided, however, that before any
determination is made to the effect that this condition has not been satisfied,
American and Omni shall each use all reasonable efforts and take such actions as
may be reasonably necessary, at its own expense, to have such order, stay,
judgment or decree lifted or dismissed and any such suit, action or proceeding
dismissed or terminated.
6.1.2 All filings with and notices to and all consents and waivers
from the third parties listed in Schedule 3.1.25 shall have been made or
obtained.
6.2 Conditions to Obligations of Omni. The obligations of Omni to effect
the Merger are subject to the satisfaction of the following conditions unless
waived by Omni:
6.2.1 The Registration Statement shall have been declared
effective and the Initial Public Offering shall have been closed;
6.2.2 The representations and warranties of the Shareholders set
forth in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date, except as otherwise contemplated by this Agreement, and
American and the Shareholders shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to
the Closing Date.
6.2.3 All consents and approvals of governmental entities or third
parties necessary for consummation of the Merger by the parties shall have been
obtained, other than those which, if not obtained, would not in Omni's judgment
have a material adverse effect on any party's ability to consummate any of the
transactions contemplated hereby or on the Business and properties of American.
22
6.2.4 Omni shall have received the opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
P.C., counsel to American and to the Shareholders, dated the Effective Time,
which will be substantially to the effect that:
(i) American is a corporation duly organized, validly existing
and in good standing under the laws of the State of Montana;
(ii) American has the corporate power to enter into this
Agreement and to consummate the transactions contemplated hereby, and the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action taken on the part of American.
(iii) This Agreement has been duly executed and delivered by
American and the Shareholders, and is a valid and binding obligation of each
enforceable against each in accordance with its terms, except (A) as
enforceability may be limited by any bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights; (B) such enforceability is subject to
general principles of equity; and (C) no opinion need be expressed regarding the
enforcement of the choice of law provision of Section 9.4;
(iv) The Merger has been approved by the Shareholders in
accordance with the Montana Act and, assuming proper corporate action on the
part of Omni and compliance with the LBCL, the Merger will be effective under
the Montana Act upon proper filing of the Certificate of Merger in the State of
Montana;
(v) To such counsel's knowledge, based upon review of American's
Articles of Incorporation, By-laws, corporate minute book and certificates
representing American Common Stock, American's stock records and certificates of
officers of American, as of the date hereof, the authorized capital stock of
American consists of 50,000 shares of American Common Stock, 100 of which are
validly issued and outstanding.
(vi) Neither the execution and the delivery of this Agreement by
American, nor the consummation of the transactions contemplated hereby, will (A)
violate any of the provisions of the Articles of Incorporation or By-laws of
American; or (B) to such counsel's knowledge, except as disclosed in an Exhibit
or Schedule to or set forth in this Agreement, conflict with or result in a
breach of, or give rise to a right of termination of, or accelerate the
performance required by, any terms of any court order, consent decree, note,
bond, mortgage, indenture, deed of trust, or any license or agreement, or any
other instrument or obligation binding on American or constitute a default
thereunder, or result in the creation of any Encumbrance upon any of the assets
of American.
As to any matter in such opinion which involves matters of fact or
matters relating to laws other than United States federal, or Montana law, such
counsel may rely, without independent investigation, upon the certificates of
officers and directors of American and of public
23
officials, reasonably acceptable to Omni. Such counsel need not render any
opinion with respect to any federal or state securities laws.
6.2.5 Omni shall have had a full opportunity to conduct
inspections of the operating assets and books and records of American.
6.2.6 American shall have provided Omni certified copies of its
Articles of Incorporation and By-laws and certificates of existence, good
standing and qualification to do business as a foreign corporation, certified by
the appropriate state authorities in American's state of incorporation and
applicable Material Jurisdictions.
6.2.7 Omni shall have received a certificate of a duly authorized
officer of American, dated the Closing Date, certifying as to the incumbency of
any person executing this Agreement or any certificate or other document
delivered in connection with this Agreement and certifying as to such other
matter as Omni shall reasonably request.
6.2.8 Omni will be reasonably satisfied, and shall have received a
certificate of each of the Shareholders and of the president of American that
the condition specified in Section 6.2.2 has been fulfilled.
6.2.9 Omni shall have received Schedule 3.1.29 and shall be
satisfied, in its sole discretion, that the information set forth therein will
not in any manner impair the operations or profitability of, or expose Omni to
liabilities which, in its discretion, are unacceptable.
6.3 CONDITIONS TO OBLIGATIONS OF AMERICAN AND SHAREHOLDERS. The
obligations of American and the Shareholders to effect the Merger are subject to
the satisfaction for the following conditions, unless waived by American and
each of the Shareholders:
6.3.1 All consents and approvals of governmental entities or third
parties necessary for consummation of the Merger by the parties, shall have been
obtained, other than those which, if not obtained, would not have a material
adverse effect on any party's ability to consummate any of the transactions
contemplated hereby. Omni shall have used its best efforts to obtain all
necessary permits, authorizations, consents and approvals required by such
governmental entities prior to the Closing Date.
6.3.2 American and the Shareholders shall have received a
certificate of a duly authorized officer of Omni, dated the Closing Date, and
certifying as to the incumbency of any person executing this Agreement or any
certificate or other document delivered in connection with this Agreement and
certifying such other matters as American or the Shareholders shall reasonably
request.
6.3.3 The Registration Statement shall have been declared
effective and the Initial Public Offering shall have been closed.
24
6.3.4 The Shareholders shall have received a certificate of a duly
authorized officer of Omni, dated the Closing Date, and certifying that the
representations and warranties of Omni set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement, and that Omni has performed in all
material respects or had waived all obligations required to be performed by them
under this Agreement at or prior to the Closing Date.
6.3.5 The Shareholders shall have received the opinion of Jones,
Walker, Waechter, Poitevent, Carrere & ▇▇▇▇▇▇▇, L.L.P., counsel to Omni, dated
the Effective Time, which will be substantially to the effect that:
(i) Omni is a corporation duly organized, validly existing and in good
standing under the laws of the State of Louisiana;
(ii) Omni has the corporate power to enter into this Agreement and to
consummate the transactions contemplated hereby, and the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all requisite corporate action taken on the part of
Omni;
(iii) This Agreement has been duly executed and delivered by Omni, and
is a valid and binding obligation of each enforceable against each in accordance
with its terms, except (A) as enforceability may be limited by any bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights; (B) such
enforceability is subject to general principles of equity; and (C) no opinion
need be expressed regarding the enforcement of the choice of law provision of
Section 9.4;
(iv) The Merger has been approved by Omni in accordance with the LBCL
and, assuming proper corporate action on the part of American and the
Shareholders and compliance with the Montana Act, the Merger will be effective
under the LBCL upon proper filing of the Certificate of Merger in the State of
Louisiana;
(v) To such counsel's knowledge, based upon review of Omni's Articles
of Incorporation, By-laws, corporate minute book, Omni's stock records and
certificates of officers of Omni, as of the date hereof, the authorized capital
stock of Omni consists of 45,000,000 shares of Omni Common Stock, 15,500,000 of
which are validly issued and outstanding.
(vi) Neither the execution and the delivery of this Agreement by Omni,
nor the consummation of the transactions contemplated hereby, will (A) violate
any of the provisions of the Articles of Incorporation or By-laws of Omni, or
(B) to such counsel's knowledge, except as disclosed in an Exhibit or Schedule
to or set forth in this Agreement, conflict with or result in a breach of, or
give rise to a right of termination of, or accelerate the performance required
by, any terms of any court order, consent decree, note, bond, mortgage,
indenture, deed of trust, or any
25
license or agreement, or any other instrument or obligation binding on Omni or
constitute a default thereunder, or result in the creation of any Encumbrance
upon any of the assets of Omni.
As to any matter in such opinion which involves matters of fact or
matters relating to laws other than United States federal, or Louisiana law,
such counsel may rely, without independent investigation, upon the certificates
of officers and directors of Omni and of public officials, reasonably acceptable
to the Shareholders. Such counsel need not render any opinion with respect to
any federal or state securities laws.
SECTION 7
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time:
7.1.1 by mutual consent of American and Omni;
7.1.2 by American or Omni, if any permanent injunction or other
order of a court or other competent governmental entity preventing the
consummation of the Merger shall have become final and nonappealable; or
7.1.3 by American, Omni or any Shareholder if the Merger shall not
have been consummated on or before December 31, 1997; provided, that the right
to terminate this Agreement under this Section 7.1 shall not be available to any
party whose breach of its representations and warranties in this Agreement or
whose failure to perform any of its covenants and agreements under this
Agreement has resulted in the failure of the Merger to occur on or before such
date.
7.2 Effect of Termination. In the event of a termination of this Agreement
by either American or Omni as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability or obligation under any
provisions hereof on the part of American, Omni or their respective officers,
directors or stockholders, except (a) pursuant to the covenants and agreements
contained in Section 5.3 and Section 5.4 and this Section 7.2 and (b) to the
extent that such termination results from the willful material breach by a party
hereto of any of its representations, warranties, covenants or agreements set
forth in this Agreement, in which case the non-breaching party shall have a
right to recover its damages caused thereby.
7.3 Amendment. This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto.
7.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may, in their respective sole discretion and to the extent
legally allowed, (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 contained herein or in any
document delivered
26
pursuant thereto; and (c) waive compliance with any of the agreements or
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 a written
instrument signed by or on behalf of such party.
SECTION 8
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1 Survival; Indemnification.
8.1.1 The covenants, representations and warranties and agreements
of the parties hereto contained herein or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the Closing
Date in accordance with their terms.
8.1.2 The Shareholders and their successors and assigns (each an
"Indemnitor"), jointly and severally, hereby agree to indemnify each Indemnitee
and Indemnitee Affiliate (as each is defined in Section 8.2 of this Agreement)
against and agree to hold it harmless from any and all damage, loss, liability,
and expense (including, without limitation, reasonable expenses of investigation
and attorney's fees and expenses in connection with any action, suit,
proceeding, claim, investigation, or other loss) (a "Loss") incurred or suffered
by such Indemnitee or Indemnitee Affiliate arising out of or relating to:
(i) Any breach of any covenant or agreement or any inaccuracy or
omission in any representation or warranty made by them pursuant to this
Agreement;
(ii) Any taxes attributable to any Pre-Closing Tax Period; and
(iii) U.S. or any state or local Environmental Laws and relating
to conditions, events, actions, violations, obligations, or circumstances that
exist in whole or part prior to the Closing Date.
8.1.3 Omni and their successors and assigns (each an
"Indemnitor"), jointly and severally, hereby agree to indemnify each Indemnitee
and Indemnitee Affiliate (as each is defined in Section 8.2 of this Agreement)
against and agree to hold it harmless from any and all damage, loss, liability,
and expense (including, without limitation, reasonable expenses of investigation
and attorney's fees and expenses in connection with any action, suit,
proceeding, claim, investigation, or other loss) (a "Loss") incurred or suffered
by such Indemnitee or Indemnitee Affiliate arising out of or relating to any
breach of any covenant or agreement or any inaccuracy or omission in any
representation or warranty made by them pursuant to this Agreement.
8.1.4 Nothwithstanding any other provisions of this Section 8,
neither the Shareholders, American or Omni shall be liable:
27
(a) for Losses arising under this Section 8.1 after such time as such
party shall have paid an aggregate of Three Million Five Hundred
Thousand and 00/100 Dollars ($3,500,000) in satisfaction of claims
made pursuant to the provisions hereof, or
(b) for indemnification relating to any
(i) breach of any covenant, except the covenant of
confidentiality after termination pursuant to Section 7 (as set
forth in Section 5.4 above) or covenants regarding the rights to
the American Helicopter Drilling name (as set forth in Section
5.6 above); or
(ii) inaccuracy or omission in any representation or
warranty made pursuant this Agreement;
unless notice providing specific details of the alleged breach or
misrepresentation is delivered to the other party within three years of the
Closing Date and a lawsuit is commenced within one year of such notice.
8.2 Definitions. For the purpose of this Agreement, the following terms
have the following meanings:
8.2.1 "Affiliate" means, with respect to any person, any person
directly or indirectly controlling, controlled by, or under common control with
such other person.
8.2.2 "Indemnitee" means, with respect to the obligations of the
Shareholders under this Section 8, Omni and its Affiliates and, with respect to
the obligations of Omni under this Section 8, American, its Affiliates or the
Shareholders.
8.2.3 "Indemnitee Affiliate" means the employees, successors, and
assigns of each Indemnitee and, with respect to each corporate Indemnitee, its
directors, officers, and shareholders.
8.2.4 "Pre-Closing Tax Period" means any tax period ending on or
before the close of business on March 31, 1997, or, in the case of any tax
period which includes, but does not end on, March 31, 1997, the portion of such
period up to and including March 31, 1997.
8.2.5 "Tax" or "Taxes" shall mean (i) any net income, alternative
or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem,
franchise, capital, paid-up capital, profits, greenmail, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty, or other tax, governmental
fee, or other like assessment or charge of any kind whatsoever, together with
any interest or any penalty, addition to tax or additional amount imposed by any
governmental authority (a "Taxing Authority") responsible for the imposition of
any such tax (domestic or foreign), and (ii) liability for
28
the payment of any amounts of the type described in (i) as a result of any
express obligations to indemnify any other person.
8.3 Control of Litigation.
(a) The Indemnitees and Indemnitee Affiliates agree to give prompt
notice to the Indemnitors of the assertion of any claim, or the commencement of
any suit, action, or proceeding in respect of which indemnity may be sought
under Section 8.1.2 or Section 8.1.3 of this Agreement and of any Loss which any
such Indemnitee deems to be within the ambit of Section 8.1.2 or Section 8.1.3
of this Agreement (specifying with reasonable particularity the basis therefor)
and will give the Indemnitors such information with respect thereto as the
Indemnitors may reasonably request. The Indemnitors may, at their own expense,
participate in and, upon notice to such Indemnitee, assume the defense of any
such suit, action, or proceeding; provided that the Indemnitors' counsel is
reasonably satisfactory to such Indemnitee, the Indemnitors shall thereafter
consult with such Indemnitee upon such Indemnitee's reasonable request for such
consultation from time to time with respect to such suit, action, or proceeding,
and the Indemnitors shall not, without such Indemnitee's consent, which consent
shall not be unreasonably withheld, settle or compromise any such suit, action,
or claim. If the Indemnitors assume such defense, such Indemnitees shall have
the right (but not the duty) to participate in the defense thereof and to employ
counsel, at their own expense, separate from the counsel employed by the
Indemnitors. For any period during which the Indemnitors have not assumed the
defense thereof, the Indemnitors shall be liable for the fees and expenses of
counsel employed by any Indemnitee; provided, however, that the Indemnitors
shall not be liable for the fees or expenses of more than one counsel employed
by any Indemnitee in any jurisdiction for all Indemnitees. If the Indemnitees
assume the defense thereof, the Indemnitees shall thereafter consult with the
Indemnitors upon the Indemnitors' reasonable request for such consultation from
time to time with respect to such suit, action, or proceeding and the
Indemnitees shall not, without the Indemnitors' consent, which consent shall not
be unreasonably withheld, settle or compromise any such suit, action or claim.
(b) No investigation by any Indemnitee or Indemnitee Affiliate prior
to the Closing Date shall relieve any Indemnitor of any liability hereunder.
8.4 Cooperation on Tax Matters. American and Omni shall cooperate fully,
as and to the extent reasonably requested by the other party, in connection with
any audit, litigation, or other proceeding with respect to Taxes. Such
cooperation shall include the retention and (upon the other party's request) the
provision of records and information which are reasonably relevant to any such
audit, litigation, or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Omni and American agree (a) to retain all
books and records which are relevant to the determination of the Tax liabilities
pertinent to the Assets relating to any Pre-Closing Tax Period until the
expiration of the applicable statute of limitations and to abide by all record
retention agreements entered into with any Taxing Authority, and (b) to give the
other party reasonable written notice prior to destroying or
29
discarding any such books and records and, if the other party so requests, Omni
or American, as the case may be, shall allow the other party to take possession
of such books and records.
SECTION 9
MISCELLANEOUS PROVISIONS
9.1 Amendment and Modification. This Agreement may be amended, modified,
or supplemented only by written agreement of the parties hereto.
9.2 Waiver of Compliance; Consents. Any failure of a party to comply with
any obligation, covenant, agreement, or condition herein may be waived by the
other party; provided, however, that any such waiver may be made only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 9.2, with appropriate notice in
accordance with Section 9.7 of this Agreement.
9.3 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Any party may assign any of its rights
hereunder, but no such assignment shall relieve it of its obligations hereunder.
Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any person other than the parties, any successors and
permitted assigns, any rights, remedy, or claim under or by reason of this
Agreement or any provisions herein contained.
9.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana (without regard to its
conflicts of law doctrines).
9.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and shall become a binding
Agreement when one or more of the counterparts have been signed by each of the
parties and delivered to the other party.
9.6 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
If to American or the Shareholders:
▇▇▇▇▇ ▇▇▇▇
30
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Omni:
OMNI Energy Services Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President
9.7 Specific Performance. Each of the parties acknowledges that money
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
9.8 Headings. The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.9 Entire Agreement. This Agreement, including the exhibits, schedules,
and other documents and instruments referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
9.10 Severability. If any one or more provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal, or unenforceable provision had never
been contained herein.
9.11 Schedules and Exhibits. All Schedules and Exhibits attached hereto
are hereby incorporated in and made a part as if set forth in full herein.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
AMERICAN HELICOPTER DRILLING INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------
▇▇▇▇▇ ▇▇▇▇, President
31
OMNI ENERGY SERVICES CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SHAREHOLDERS
/s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇
32
THIS EXHIBIT OMITS THE FOLLOWING SCHEDULES AND EXHIBITS. THE COMPANY WILL
SUPPLEMENTALLY FURNISH THE COMMISSION A COPY OF ANY SUCH SCHEDULES OR EXHIBITS
UPON REQUEST:
Schedule Title
-------- -------------------------------------
1.4 Ownership of American Common Stock
3.1.10 Permitted Encumbrances
3.1.12 Changes Since March 31, 1997
3.1.15 Receivable and Payables
3.1.16 Encumbrances on Properties
3.1.17 Leases
3.1.21 Material Contracts
3.1.23 Personnel
3.1.25 Consents and Permits
3.1.27 Compliance with Applicable Law
3.1.29 Environmental
Exhibit Title
-------- -------------------------------------
2.1 Employment and Non-Competition
Agreement Between the Company and
▇▇▇▇▇ ▇▇▇▇
5.7 Lease Agreement Between the Company
and ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
33