EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
Among
UNIFAB INTERNATIONAL, INC.,
OBI ACQUISITION, INC.,
OIL BARGES, INC.,
SOUTHERN RENTALS, L.L.C.,
▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ SIMON, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
COVE EQUIPMENT, INC., and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
TRUSTEE OF THE SKW TRUST
Dated as of April 29, 1999
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS 1
Section 1.1 DEFINITIONS 1
ARTICLE 2. THE MERGER 8
Section 2.1 THE MERGER 8
Section 2.2 EFFECTS OF THE MERGER; ARTICLES AND OPERATING
AGREEMENT; DIRECTORS AND OFFICERS 8
Section 2.3 CONVERSION OF SHARES 8
Section 2.4 EXCHANGE OF STOCK CERTIFICATES 9
Section 2.5 NO FURTHER RIGHTS IN OBI COMMON STOCK 9
ARTICLE 3. THE ASSET PURCHASE 10
Section 3.1 ASSETS CONVEYED 10
Section 3.2 EXCLUDED ASSETS 10
Section 3.3 EXCLUSION OF LIABILITIES 10
Section 3.4 CONSIDERATION 10
Section 3.5 PURCHASE PRICE ALLOCATION 10
Section 3.6 EQUIPMENT LEASE AND ACCOUNTS RECEIVABLE 11
ARTICLE 4. THE CLOSING 11
Section 4.1 TIME AND PLACE 11
Section 4.2 CLOSING OF THE MERGER 11
Section 4.3 CLOSING OF THE ASSET PURCHASE 12
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF OBI, SOUTHERN RENTALS,
THE OBI SHAREHOLDERS, AND THE SOUTHERN RENTALS MEMBERS 12
Section 5.1 ORGANIZATION 13
Section 5.2 AFFILIATED ENTITIES 13
Section 5.3 CAPITALIZATION 13
Section 5.4 AUTHORITY; ENFORCEABLE AGREEMENTS 14
Section 5.5 NO CONFLICTS OR CONSENTS 14
Section 5.6 ORGANIZATIONAL FORMALITIES; ORGANIZATIONAL DOCUMENTS;
SHAREHOLDER AND MEMBER AGREEMENTS AND BOARDS OF
DIRECTORS AND MANAGERS 15
Section 5.7 FINANCIAL STATEMENTS; LIABILITIES 15
Section 5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS 16
Section 5.9 CONTRACTS 17
Section 5.10 PROPERTIES AND LEASES 18
Section 5.11 VOTING REQUIREMENTS 19
Section 5.12 SUPPLIERS AND CUSTOMERS 19
Section 5.13 EMPLOYEE MATTERS 20
Section 5.14 EMPLOYEE BENEFIT PLANS 20
Section 5.15 TAX MATTERS 23
Section 5.16 LITIGATION 25
Section 5.17 ENVIRONMENTAL COMPLIANCE 25
Section 5.18 COMPLIANCE WITH LAW; PERMITS; SAFETY AND HEALTH 27
Section 5.19 TRANSACTIONS WITH RELATED PARTIES 27
Section 5.20 BROKER'S AND FINDER'S FEE 28
Section 5.21 INSURANCE 28
Section 5.22 MATERIALITY 28
Section 5.23 DISCLOSURE 28
Section 5.24 REPRESENTATION; UNIFAB DISCLOSURE DOCUMENTS 29
ARTICLE 6. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE OBI
SHAREHOLDERS AND SOUTHERN RENTALS 29
Section 6.1 OWNERSHIP AND TRANSFER OF SHARES 29
Section 6.2 UNIFAB RELIANCE 30
Section 6.3 RESTRICTIVE LEGEND 30
Section 6.4 INVESTMENT REPRESENTATIONS 30
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF UNIFAB AND SUB 30
Section 7.1 ORGANIZATION 31
Section 7.2 CAPITALIZATION 31
Section 7.3 AUTHORITY; ENFORCEABLE AGREEMENTS 31
Section 7.4 NO CONFLICTS OR CONSENTS 32
Section 7.5 SEC DOCUMENTS; FINANCIAL STATEMENTS; LIABILITIES 32
Section 7.6 LEGALITY OF UNIFAB COMMON STOCK 33
Section 7.7 BROKER'S AND FINDER'S FEE 33
Section 7.8 DISCLOSURE 33
ARTICLE 8. PRE-CLOSING COVENANTS 33
Section 8.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE 33
Section 8.2 NO SOLICITATIONS 34
Section 8.3 PUBLIC STATEMENTS; CONFIDENTIALITY 35
Section 8.4 ACCESS TO PROPERTIES AND RECORDS; ENVIRONMENTAL DUE
DILIGENCE 35
Section 8.5 CONSULTATION AND REPORTING 36
Section 8.6 NOTIFICATION OF CHANGES 36
Section 8.7 SUB SHAREHOLDER APPROVAL 36
Section 8.8 BONUSES 37
ARTICLE 9. POST-CLOSING COVENANTS 37
TAX-FREE REORGANIZATION 37
ARTICLE 10. CLOSING CONDITIONS 37
Section 10.1 CONDITIONS APPLICABLE TO ALL PARTIES 37
Section 10.2 CONDITIONS TO UNIFAB'S OBLIGATIONS 37
Section 10.3 CONDITIONS TO THE OBLIGATIONS OF OBI, SOUTHERN
RENTALS, THE OBI SHAREHOLDERS AND THE SOUTHERN
AND THE SOUTERN RENTALS MEMBERS 39
Section 10.4 WAIVER OF CONDITIONS 40
ARTICLE 11. SURVIVAL OF REPRESENTATIONS; INDEMNITY 40
Section 11.1 POST-CLOSING REMEDIES 40
Section 11.2 INDEMNIFICATION BY OBI SHAREHOLDERS 40
Section 11.4 INDEMNIFICATION BY UNIFAB TO OBI SHAREHOLDERS 42
Section 11.5 INDEMNIFICATION BY UNIFAB TO SOUTHERN RENTALS
AND SOUTHERN RENTALS MEMBERS 42
Section 11.6 INDEMNITY PROCEDURES 42
Section 11.7 OBI ESCROW PROCEDURES 43
Section 11.8 SOUTHERN RENTALS ESCROW PROCEDURES 45
ARTICLE 12. TERMINATION 47
Section 12.1 TERMINATION 47
Section 12.2 EFFECT OF TERMINATION 48
ARTICLE 13. MISCELLANEOUS 48
Section 13.1 NOTICES 48
Section 13.2 GOVERNING LAW 49
Section 13.3 COUNTERPARTS 49
Section 13.4 INTERPRETATION; SCHEDULES 49
Section 13.5 ENTIRE AGREEMENT; SEVERABILITY 49
Section 13.6 AMENDMENT AND MODIFICATION 50
Section 13.7 EXTENSION; WAIVER 50
Section 13.8 BINDING EFFECT; BENEFITS 50
Section 13.9 ASSIGNABILITY 50
Section 13.10 EXPENSES 50
Section 13.11 GENDER AND CERTAIN DEFINITIONS 50
Section 13.12 GUARANTEES OF THE SOUTHERN RENTALS BENEFICIAL
OWNERS 50
Section 13.13 ACCEPTANCE BY OBI SHAREHOLDER REPRESENTATIVE 51
Section 13.14 ACCEPTANCE BY SOUTHERN RENTALS REPRESENTATIVE 51
LIST OF SCHEDULES
Schedule 1 Assets of Southern Rentals to be Purchased
Schedule 3.3 Liabilities of Southern Rentals to be Assumed
Schedule 5.2 Subsidiary
Schedule 5.3 Capitalization
Schedule 5.6 Commingling of Funds
Schedule 5.7 Financial Statements
Schedule 5.7(a) Exceptions to OBI Financial Statements
Schedule 5.8(i) Power of Attorney
Schedule 5.8(j) Employment Agreements
Schedule 5.8(l) Changes in Method of Accounting
Schedule 5.9 Contracts
Schedule 5.10(b)(1) Assets Subject to Customary Maintenance Requirements
Schedule 5.10(b)(2) Security Interest in Assets of Southern Rentals
Schedule 5.10(c) Exceptions to Leases
Schedule 5.10(d) Property Exceptions
Schedule 5.10(e) Leases Between OBI, Southern Rentals, and Their Affiliates
Schedule 5.10(f) Intellectual Properties
Schedule 5.13(a) Employee Matters
Schedule 5.13(b) Employee Legal Proceedings
Schedule 5.14(a) Employee Plans
Schedule 5.14(b) Benefit Arrangements
Schedule 5.14(k) Severance Benefits
Schedule 5.15(d) Tax Liens
Schedule 5.15(e) Tax Elections
Schedule 5.15(g) Tax Year Information
Schedule 5.15(i) Potential Tax Audit Issues
Schedule 5.15(r) Deferred Intercompany Transactions
Schedule 5.16 Litigation Involving OBI
Schedule 5.17(a) Exception to Possession of Necessary Licenses, Permits,
and Other Approvals
Schedule 5.17(b) Environmental Claims Asserted Against OBI
Schedule 5.17(c) Hazardous Materials Used, Disposed of, Discharged, or
Stored by OBI
Schedule 5.19(a) Affiliate Transactions
Schedule 5.19(b) Affiliate Agreements and Claims
Schedule 5.21 Insurance Maintained by OBI
Schedule 6.1 Outstanding OBI Common Stock
Schedule 8.8 Bonuses
LIST OF EXHIBITS
Exhibit 2.1 Form of certificate of merger
Exhibit 4.3 Form of ▇▇▇▇ of sale
Exhibit 10.2(f)(1) Form of employment agreement (▇▇▇▇▇)
Exhibit 10.2(f)(2) Form of employment agreement (▇▇▇▇▇▇)
Exhibit 10.2(f)(3) Form of employment agreement (▇.▇. ▇▇▇▇▇▇)
Exhibit 10.2(f)(4) Form of employment agreement (▇▇▇▇▇▇)
Exhibit 10.2(f)(5) Form of noncompetition, nonsolicitation, invention and
secrecy agreement
Exhibit 10.2(g) Form of opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Exhibit 10.2(i) Form of letter agreement with ▇▇▇▇▇▇▇ & Company
International
Exhibit 10.2(j) Form of lease agreement
Exhibit 10.2(k)(1) Form of assignment of patent application (▇.▇. ▇▇▇▇▇▇)
Exhibit 10.2(k)(2) Form of assignment of patent application (▇.▇. ▇▇▇▇▇▇ and
Schellstede)
Exhibit 10.2(k)(3) Form of assignment of patent application (▇▇▇▇▇▇ and
Schellstede)
Exhibit 10.3(d) Form of opinion of Jones, Walker, Waechter, Poitevent,
Carrere & ▇▇▇▇▇▇▇, L.L.P.
All the schedules and exhibits listed immediately above have been
omitted from this copy of this document. UNIFAB International, Inc. hereby
agrees to furnish supplementally a copy of any omitted schedule or exhibit
to the Securities and Exchange Commission upon request.
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as
of April 29, 1999, is by and among UNIFAB International, Inc., a Louisiana
corporation ("UNIFAB"); OBI Acquisition, Inc., a Louisiana corporation and
a wholly owned subsidiary of UNIFAB ("Sub") (UNIFAB and Sub being
hereinafter collectively referred to as the "Companies"); Oil Barges, Inc.,
a Louisiana corporation ("OBI"); Southern Rentals, L.L.C., a Louisiana
limited liability company ("Southern Rentals") (OBI and Southern Rentals
being hereinafter collectively referred to as the "Entities"); ▇▇▇ ▇.
▇▇▇▇▇ ("▇▇▇▇▇"); ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"); ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇.▇.
▇▇▇▇▇▇"); ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇.▇. ▇▇▇▇▇▇"); ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇.▇.
▇▇▇▇▇▇"); ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"); ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇")
(Poche, Patout, ▇.▇. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇, ▇▇▇▇▇, and ▇▇▇▇▇▇
being hereinafter collectively referred to as the "OBI Shareholders"); Cove
Equipment, Inc., a Louisiana corporation ("Cove"); and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Trustee of the SKW Trust (the "Trustee") (Cove, the Trustee, and ▇▇▇▇▇▇
being hereinafter collectively referred to as the "Southern Rentals
Members," and Poche, Patout, Simon, Berard, ▇.▇. ▇▇▇▇▇▇, and ▇.▇. ▇▇▇▇▇▇
being hereinafter referred to as the "Southern Rentals Beneficial Owners").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of UNIFAB, Sub and OBI
deem it desirable to merge Sub with and into OBI (the "Merger") with the
result that the corporate existence of Sub will cease and OBI will be the
Surviving Entity; and
WHEREAS, Southern Rentals is the owner of the assets set forth on
SCHEDULE 1 attached hereto (the "Assets"), and Southern Rentals desires to
sell and UNIFAB desires to purchase the Assets upon the terms and
conditions set forth herein (the "Asset Purchase");
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained herein, the parties agree as
follows:
ARTICLE 1. DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms when capitalized have the meanings indicated below.
"Affiliate" has the meaning given in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
"Agreement" means this Agreement and Plan of Reorganization, including
the Schedules and Exhibits hereto, all as amended or otherwise modified
from time to time.
"Applicable Law" has the meaning assigned to it in Section 5.5(a).
"Acquisition Proposal" has the meaning assigned to it in Section
8.2(b).
"Asset Purchase" has the meaning assigned to it in the Preamble.
"Asset Purchase Closing Shares" has the meaning assigned to it in
Section 3.4.
"Asset Purchase Consideration" has the meaning assigned to it in
Section 3.4.
"Asset Purchase Escrow Shares" has the meaning assigned to it in
Section 3.4.
"Assets" has the meaning assigned to it in the Preamble.
"Assumed Liability" has the meaning assigned to it in Section 3.4.
"Benefit Arrangement" means any employment, severance or similar
contract, or any other contract, plan, policy or arrangement (whether or
not written) providing for compensation, bonus, profit-sharing, stock
option or other stock related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance coverage (including any
self-insured arrangement), health or medical benefits, disability benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits) that
(a) is maintained, administered or contributed to by OBI or (b) covers any
employee or former employee of OBI.
"Business Day" means a day other than a Saturday, a Sunday or a day on
which national banks or the NASDAQ Stock Market are or is closed.
"Certificate of Merger" has the meaning assigned to it in Section 2.1.
"Closing" and "Closing Date" have the meanings assigned to them in
Section 4.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Companies" has the meaning assigned to it in the Preamble.
"Cove" has the meaning assigned to it in the Preamble.
"Damages" has the meaning assigned to it in Section 11.2.
"Effective Date" has the meaning assigned to it in Section 2.1.
"Effective Time" has the meaning assigned to it in Section 2.1.
"Employee Plan" means a plan or arrangement as defined in Section 3(3)
of ERISA, that OBI maintains, administers, has contributed to or has any
contingent liability with respect to.
"Entities" has the meaning assigned to it in the Preamble.
"Environmental Claim" refers to any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or written communication from
any governmental agency, department, bureau, office or other authority, or
any third party arising out of, attributable to, that may accrue out of, or
that may result from (a) a violation or alleged violation of Environmental
Laws; or (b) the presence, Release, or threatened Release of Hazardous
Materials at or from (i) any current or formerly owned or leased assets,
properties, or businesses of any of the parties to this Agreement, or their
predecessors-in-interest; (ii) properties adjoining any current or
formerly owned or leased assets, properties, or businesses of the parties
to this Agreement, or their predecessors-in-interest; or (iii) any facility
to which any Hazardous Materials generated by the parties to this Agreement
or their predecessors-in-interest, have been taken for treatment, storage,
or disposal.
"Environmental Laws" has the meaning assigned to it in Section
5.17(a).
"Environmental Liabilities" means any monetary obligations, losses,
liabilities (including strict liability), damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable out-of-pocket fees, disbursements and expenses of counsel, out-
of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigations and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of
any Environmental Claim arising out of, attributable to, that may accrue
out of, or that may result from (a) a violation or the alleged violation of
Environmental Laws; (b) a Remedial Action; or (c) a Release or threatened
Release from or onto (i) any property owned or leased by the respective
parties to this Agreement, or their predecessors-in-interest; or (ii) any
facility that received Hazardous Materials generated by the respective
parties to this Agreement, or their predecessors-in-interest.
"Environmental Reports" has the meaning assigned to it in Section
5.17(f).
"Equipment" has the meaning assigned to it in Section 3.6.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Escrow Termination Date" has the meaning assigned to it in
Section 11.7(a).
"Governmental Entity" has the meaning assigned to it in Section
5.5(b).
"Hazardous Materials" means (a) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substance, extremely
hazardous substance or chemical, hazardous waste, medical waste,
biohazardous or infectious waste, special waste, or solid waste under
Environmental Laws; (b) petroleum, petroleum-based or petroleum-derived
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic including but not limited to corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or
explosive materials; and (e) any raw materials, building components,
including lead-based paint, asbestos-containing materials and manufactured
products containing Hazardous Materials.
"Indemnified Party" and "Indemnifying Party" have the respective
meanings assigned to them in Section 11.6(a).
"Indemnity Claim" has the meaning assigned to it in Section 11.6(a).
"Indemnity Value" means the value of shares of UNIFAB Common Stock
constituting the Merger Consideration or the Asset Purchase Consideration
determined from time to time on the basis of the closing price of UNIFAB
Common Stock as reported by NASDAQ on the last Business Day prior to the
date on which it is determined that an amount is to be paid pursuant to
Section 11.6.
"Intellectual Property" has the meaning assigned to it in Section
5.10(f).
"IRS" means the Internal Revenue Service of the United States.
"Know" or "Knowledge." Information contained in any representation or
warranty of a party in this Agreement that is stated to be known to or made
to the knowledge of the party consists of information that is within such
party's actual knowledge or that such party could reasonably be expected to
know given the circumstances of such representation or warranty.
"LBCL" means the Louisiana Business Corporation Law, as amended.
"Lease" has the meaning assigned to it in Section 3.6.
"Lien" means pledges, liens, defects, leases, licenses, equities,
conditional sales contracts, charges, claims, encumbrances, security
interests, easements, restrictions, chattel mortgages, mortgages or deeds
of trust of any kind or nature whatsoever.
"LLCL" means the Louisiana Limited Liability Company Law, as amended.
"Loan Agreement" means that certain Loan Agreement, dated November 6,
1998, among UNIFAB, Southern Rentals and OBI, pursuant to which UNIFAB made
available to Southern Rentals and OBI a line of credit of $2.0 million.
A "Material Adverse Effect" means a material adverse effect on the
business, financial position, or earnings of a Person and its Subsidiaries
(if any) taken as a whole or on its ability to carry out the transactions
contemplated hereby; provided, however, that Material Adverse Effect does
not include an effect of a deterioration in market conditions in the oil
and gas service industry generally.
"Merger" has the meaning assigned to it in the Preamble.
"Merger Closing Shares" has the meaning assigned to it in Section
2.3(b)(i).
"Merger Consideration" has the meaning assigned to it in Section
2.3(b)(i).
"Merger Escrow Shares" has the meaning assigned to it in Section
2.3(b)(ii).
"Merger Value" has the meaning assigned to it in Section 3.1(c).
"Multiemployer Plan" means a plan or arrangement as defined in Section
4001(a)(3) and 3(37) of ERISA.
"OBI" means Oil Barges, Inc., a Louisiana corporation and, as such
term is used in this Article I and hereafter, includes such corporation's
Subsidiaries.
"OBI Audited Financial Statements" means the audited balance sheets
and related statements of income, retained earnings and cash flow, and the
related notes thereto of OBI for the periods ended on December 31, 1996 and
1997, respectively.
"OBI Common Stock" means the shares of OBI common stock, no par value
per share.
"OBI Extended Final Escrow Termination Date" has the meaning assigned
to it in Section 11.7(a).
"OBI Extended Partial Escrow Termination Date" has the meaning
assigned to it in Section 11.7(a).
"OBI Financial Statements" means the OBI Audited Financial Statements
and the OBI Interim Financial Statements, collectively.
"OBI Interim Financial Statements" means the unaudited balance sheet
and the related unaudited statements of income, retained earnings and cash
flows of OBI as of September 30, 1998, and for the nine-month period ended
September 30, 1998.
"OBI Latest Balance Sheet" means the latest balance sheet included in
the OBI Interim Financial Statements.
"OBI Shareholders" has the meaning assigned to it in the Preamble.
"OBI Shareholder Representative" has the meaning assigned to it in
Section 11.7(b).
"Partial Escrow Termination Date" has the meaning assigned to it in
Section 11.7(a).
"Person" means an individual, firm, corporation, general or limited
partnership, limited liability company, limited liability partnership,
joint venture, trust, governmental authority or body, association,
unincorporated organization or other entity.
"Pre-Closing Period" means any Tax period ending at or before the
Effective Time and, with respect to any Tax period that includes but does
not end at the Effective Time, the portion of such period that ends at and
includes the Effective Time.
"Release" means any release, spill, leak, emission, discharge, pump,
empty, injection, escape, leaching, migration, dumping or disposal of
Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into
the environment, or any other means by which a Hazardous Material may be
introduced into the environment.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment, (ii)
prevent or minimize a Release or threatened Release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment, (iii) perform post-remedial
operation and maintenance activities, or (iv) any other actions including
any removal, remedial, or other response actions defined in 42 U.S.C.
section 9601.
"Returns" means all returns, reports, estimates, declarations and
statements of any nature regarding Taxes for any Pre-Closing Period
required to be filed by the taxpayer relating to its income, properties or
operations.
"Rule 144" has the meaning assigned to it in Section 6.4.
"Rules" has the meaning assigned to it in Section 11.6(b).
"Schellstede" has the meaning assigned to it in Section 10.2(k).
"SEC" means the Securities and Exchange Commission of the United
States.
"Securities Act" means the Securities Act of 1933, as amended.
"▇▇▇▇▇▇▇ Agreement" has the meaning assigned to it in Section 5.20.
"Southern Rentals" has the meaning assigned to it in the Preamble.
"Southern Rentals Beneficial Owners" has the meaning assigned to it in
the Preamble.
"Southern Rentals Extended Final Escrow Termination Date" has the
meaning assigned to it in Section 11.8(a).
"Southern Rentals Extended Partial Escrow Termination Date" has the
meaning assigned to it in Section 11.8(a).
"Southern Rentals Members" has the meaning assigned to it in the
Preamble.
"Southern Rentals Membership Interests" means membership interests in
Southern Rentals.
"Southern Rentals Representative" has the meaning assigned to it in
Section 11.8(b).
"Sub" has the meaning assigned to it in the Preamble.
"Subsidiary" has the meaning assigned to it in Section 5.2.
"Surviving Entity" means Sub following the Effective Time.
"Tax" or "Taxes" means any federal, state, local, foreign or other
taxes (including, without limitation, income, alternative minimum,
franchise, property, sales, use, lease, excise, premium, payroll, wage,
employment or withholding taxes), fees, duties, assessments, withholdings
or governmental charges of any kind whatsoever (including interest,
penalties and additions to tax).
"Tax Deficiencies" has the meaning assigned to it in Section 5.15(h).
"Title IV Plan" means an Employee Plan, other than any Multiemployer
Plan, subject to Title IV of ERISA.
"Trustee" has the meaning assigned to it in the Preamble.
"UNIFAB" has the meaning assigned to it in the Preamble.
"UNIFAB Affiliated Group" means UNIFAB and its Subsidiaries.
"UNIFAB Audited Financial Statements" means the audited balance
sheets, and the related statements of operations, shareholder's equity and
cash flow, and the related notes thereto of UNIFAB for the years ended
March 31, 1996, 1997, and 1998.
"UNIFAB Common Stock" means shares of UNIFAB Common Stock, $.01 par
value.
"UNIFAB Disclosure Documents" has the meaning assigned to it in
Section 5.24.
"UNIFAB Financial Statements" means the UNIFAB Audited Financial
Statements and the UNIFAB Interim Financial Statements.
"UNIFAB Interim Financial Statements" means the unaudited balance
sheet and the related unaudited statements of income, retained earnings and
cash flows of UNIFAB as of December 31, 1998 and for the nine-month period
ended December 31, 1998.
"UNIFAB Latest Balance Sheet" means the latest balance sheet included
in the UNIFAB Interim Financial Statements.
"UNIFAB Share Issuance" means the issuance of UNIFAB Common Stock to
the OBI Shareholders upon consummation of the Merger.
ARTICLE 2. THE MERGER
Section 2.1 THE MERGER. Subject to the terms and conditions of this
Agreement, Sub will be merged with and into OBI as of the date and time
specified in a certificate of merger in the form attached hereto as EXHIBIT
2.1 (the "Certificate of Merger") to be filed with the Secretary of State
of the State of Louisiana with respect to the Merger (such date and time
being hereinafter referred to respectively as the "Effective Date" and the
"Effective Time"). Following the Merger, the separate corporate existence
of Sub will cease and OBI will be the Surviving Entity and will succeed to
and assume all the rights and obligations of Sub in accordance with the
LBCL.
Section 2.2 EFFECTS OF THE MERGER; ARTICLES AND OPERATING AGREEMENT;
DIRECTORS AND OFFICERS.
(a) The Merger will have the effects specified in Sections 115
and 117(G) of the LBCL.
(b) The articles of incorporation of Sub in effect at the
Effective Time, as amended in the Certificate of Merger, will be the
articles of incorporation of the Surviving Entity thereafter unless and
until amended in accordance with their terms and as provided by law.
(c) Except for the substitution of the word "three" for the word
"two" in Section 3.1 of the by-laws of Sub, the by-laws of Sub as in effect
at the Effective Time will be the by-laws of the Surviving Entity
thereafter unless and until amended in accordance with their terms, the
terms of the articles of incorporation of the Surviving Entity and as
provided by law.
(d) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇. ▇▇▇▇▇ will
be the directors of the Surviving Entity on and after the Effective Time
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ will be President and Secretary-
Treasurer, respectively, of the Surviving Entity on and after the Effective
Time, each to hold office in accordance with the articles of incorporation
and by-laws of the Surviving Entity until their respective successors are
duly elected and qualified.
Section 2.3 CONVERSION OF SHARES.
(a) At the Effective Time, by virtue of the Merger and without
any further action on the part of UNIFAB, Sub, OBI or the Surviving Entity,
or any holder of any of the following securities:
(i) each share of OBI Common Stock issued and outstanding
at the Effective Time held by each OBI Shareholder will
be converted into the right to receive 979.506 fully
paid and nonassessable shares of UNIFAB Common Stock in
the manner described in Section 2.3(b) below; provided
that there will be no more than 500 shares of OBI
Common Stock issued and outstanding immediately prior
to the Effective Time and that no fractional shares of
UNIFAB shall be issued.
(ii) each issued share of OBI that is held in treasury by
OBI or held by any subsidiary of OBI will be canceled
and no stock of UNIFAB or other consideration will be
delivered in exchange therefor; and
(iii)each share of common stock of Sub issued and
outstanding at the Effective Time shall be converted
into one share of the common stock of the Surviving
Entity.
(b) Upon conversion of his shares of OBI Common Stock into
rights to receive shares of UNIFAB Common Stock in accordance with Section
2.3(a)(i) above, each OBI Shareholder shall have the right (i) to receive a
certificate representing the number of shares of UNIFAB Common Stock (the
"Merger Closing Shares"), rounded to the nearest whole number, that is
equal to 80% of the product of (A) 979.506 times (B) the number of issued
and outstanding shares of OBI Common Stock of which he is the record holder
immediately prior to the Effective Time, rounded to the nearest whole share
(the product of (A) and (B) rounded to the nearest whole share being the
"Merger Consideration"), and (ii) to have UNIFAB hold in escrow for the
benefit of such OBI Shareholder, but subject to the terms and conditions
set forth in Article 11, certificates representing collectively the total
number of shares of UNIFAB Common Stock (the "Merger Escrow Shares"),
rounded to the nearest whole number, that is equal to 20% of the Merger
Consideration.
Section 2.4 EXCHANGE OF STOCK CERTIFICATES. (a) As soon as
practicable after the Closing Date, each OBI Shareholder shall surrender
for cancellation to UNIFAB the certificates representing all shares of OBI
Common Stock held by him, together with duly executed stock powers in form
and substance satisfactory to UNIFAB. Upon such surrender, (i) UNIFAB will
(A) issue to such OBI Shareholder a certificate representing the whole
number of Merger Closing Shares that such OBI Shareholder has the right to
receive pursuant to the provisions of Section 2.3(b)(i) and (B) hold such
OBI Shareholder's Merger Escrow Shares in escrow subject to the provisions
of Article 11 and (ii) the certificates representing shares of OBI Common
Stock so surrendered will forthwith be canceled.
(b) At the Closing, the Surviving Entity shall deliver to UNIFAB
a stock certificate (issued in the name of UNIFAB and dated as of the
Effective Date) representing 1,000 shares of the common stock of the
Surviving Entity (the "Surviving Entity Certificate"), which UNIFAB shall
be entitled to exchange for its shares of Sub that will be converted into
shares of the Surviving Entity at the Effective Time in the manner
described in Section 2.3(a)(iii). At the Closing, UNIFAB shall substitute
the Surviving Entity Certificate for its certificate representing all the
issued and outstanding shares of Sub, which certificate for shares of Sub
shall be marked "canceled" and entered in the stock records of Sub.
Section 2.5 NO FURTHER RIGHTS IN OBI COMMON STOCK. As of the
Effective Time, all shares of OBI Common Stock will no longer be
outstanding and will automatically be canceled and retired and will cease
to exist, and each holder of a certificate representing shares of OBI
Common Stock as of the Effective Time will cease to have any rights with
respect thereto, except the right to receive the Merger Consideration in
respect of the OBI Common Stock represented by such certificate upon
surrender of such certificate as provided in Section 2.4.
ARTICLE 3. THE ASSET PURCHASE
Section 3.1 ASSETS CONVEYED. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing Southern Rentals
will convey, sell, transfer and deliver to UNIFAB and UNIFAB will purchase,
acquire and accept from Southern Rentals, all right, title and interest of
Southern Rentals in and to all of the Assets.
Section 3.2 EXCLUDED ASSETS. Other than the Assets set forth in
SCHEDULE 1 attached hereto, UNIFAB is not purchasing any rights, title or
interest in any assets or property of Southern Rentals or Southern Rentals
Members.
Section 3.3 EXCLUSION OF LIABILITIES. Except as set forth in SCHEDULE
3.3 and as provided in Section 3.4 hereof, UNIFAB is not acquiring, either
directly or indirectly, any liabilities, whether fixed or contingent, known
or unknown or due or to become due, of Southern Rentals or Southern Rentals
Members, it being expressly understood that all such unacquired liabilities
will remain the responsibility of Southern Rentals and Southern Rentals
Members.
Section 3.4 CONSIDERATION. Upon the terms and subject to the
conditions contained in this Agreement, in full consideration of and
payment for the sale of the Assets, UNIFAB will pay to Southern Rentals
210,000 shares of UNIFAB Common Stock and assume the liability of Southern
Rentals set forth on Schedule 3.3 (the "Assumed Liability") (collectively,
the "Asset Purchase Consideration"). Of the Asset Purchase Consideration,
certificates representing collectively 80% of the shares of UNIFAB Common
Stock comprising the Asset Purchase Consideration (the "Asset Purchase
Closing Shares"), rounded to the nearest whole share, will be delivered by
UNIFAB to Southern Rentals or, as an accommodation to Southern Rentals, one
or more designees of Southern Rentals as soon as practicable after the
Closing (as defined in Section 4.1 hereof) and certificates representing
collectively 20% of the shares of UNIFAB Common Stock comprising the Asset
Purchase Consideration (the "Asset Purchase Escrow Shares"), rounded to the
nearest whole share, will be held by UNIFAB in escrow for the benefit of
Southern Rentals or, as an accommodation to Southern Rentals, one or more
designees of Southern Rentals subject to the terms and conditions set forth
in Article 11.
Section 3.5 PURCHASE PRICE ALLOCATION. The Asset Purchase
Consideration will be allocated among the Assets transferred hereunder in
proportion to their respective fair market values. Such allocation will be
as reasonably specified by UNIFAB and consented to by Southern Rentals in
accordance with Section 1060 of the Code within 90 days after the Closing
and will be set forth on an allocation statement to be executed by UNIFAB
and Southern Rentals. UNIFAB and Southern Rentals will each file or cause
to be filed all federal, state and local tax returns as may be required in
accordance with such allocation.
Section 3.6 EQUIPMENT LEASE AND ACCOUNTS RECEIVABLE. The parties
hereto hereby acknowledge and agree that, effective as of the Closing, (i)
the lease between Southern Rentals, as lessor, and OBI, as lessee (the
"Lease"), with respect to a 4100W Manitowac Crane, a 4000W Manitowac Crane,
and a 3900 Manitowac Crane (collectively, the "Equipment") is terminated
and of no further force or effect, (ii) the account receivable on the books
of OBI in the total amount of $77,500 due from Southern Rentals is deemed
satisfied in full by the cancellation of $77,500 in unpaid rent owed by OBI
to Southern Rentals under the Lease, (iii) Southern Rentals releases,
relieves, and forever discharges OBI and its successors and assigns from
any and all liabilities, obligations, claims, costs, all remaining unpaid
rent owed by OBI to Southern Rentals under the Lease, interest on all
unpaid rent, and other rents and obligations arising out of or in any way
connected with the Lease or the use of the Equipment by OBI, and (iv) OBI
releases, relieves, and forever discharges Southern Rentals and its
successors and assigns from any and all liabilities, obligations, claims,
and costs arising out of or in any way connected with the Lease or the use
of the Equipment by OBI.
ARTICLE 4. THE CLOSING
Section 4.1 TIME AND PLACE. The closing of the transactions
contemplated herein (the "Closing") will take place, assuming satisfaction
or waiver of each of the conditions set forth in Article 10 hereof, at the
offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Versailles Centre, 102 Versailles Boulevard, Lafayette, Louisiana, at 3:00
P.M. C.D.T. on April 29, 1999 or such other date as may be mutually agreed
upon between the parties following satisfaction of the latest to occur of
the conditions set forth in Section 10.1, provided, in either case, that
the other conditions set forth in Article 10 will have been satisfied or
waived as provided in Article 10 at or prior to the Closing (the date of
the Closing being referred to herein as the "Closing Date").
Section 4.2 CLOSING OF THE MERGER. At the Closing of the Merger, the
appropriate parties thereto will (i) deliver the documents, certificates
and opinions required to be delivered by Articles 2 and 10 hereof in
connection therewith, (ii) provide proof or appropriate evidence of the
satisfaction or waiver of each of the conditions set forth in Article 10
hereof, (iii) cause the appropriate representatives of Sub to execute and
deliver the Certificate of Merger in accordance with the provisions of the
LBCL, (iv) consummate the Merger by causing to be filed such properly
executed Certificate of Merger with the Secretary of State of the State of
Louisiana in accordance with the provisions of the LBCL (v) deliver copies
of the articles of incorporation and bylaws of OBI, certified by the
secretary of OBI, together with a copy of the duly authorized resolutions
of the board of directors and the shareholders of OBI authorizing the
execution, performance and delivery of this Agreement and the consummation
of the Merger, (vi) deliver such other documents and instruments reasonably
necessary to effect the consummation of the Merger, and (vii) deliver
cross-receipts acknowledging the delivery and receipt at the Closing of the
documentation specified above in this Section 4.2. As soon as practicable
after the Closing of the Merger, the appropriate parties thereto will (i)
deliver certificates representing the Merger Closing Shares and, in escrow,
the Merger Escrow Shares in accordance with the provisions of Article 2 and
(ii) deliver cross-receipts acknowledging the delivery and receipt after
the Closing of such documentation.
Section 4.3 CLOSING OF THE ASSET PURCHASE.
(a) At the Closing of the Asset Purchase, which will be deemed
to occur immediately after the Closing of the Merger, the parties to the
Asset Purchase will (i) deliver the documents, certificates and opinions
required to be delivered by Articles 3 and 10 hereof in connection
therewith, (ii) provide proof or indication of the satisfaction or waiver
of each of the conditions set forth in Article 10 hereof, and (iii) deliver
cross-receipts acknowledging the delivery and receipt at the Closing of the
documentation specified above in this Section 4.3(a) and the documentation
specified in Section 4.3(b) and Section 4.3(c) below. As soon as
practicable after the Closing of the Asset Purchase, the parties to the
Asset Purchase or their designees will deliver cross-receipts acknowledging
the delivery and receipt of the Asset Purchase Consideration in accordance
with the provisions of Article 3 hereof.
(b) At the Closing of the Asset Purchase, Southern Rentals will
deliver to UNIFAB the following, in form and substance reasonably
satisfactory to UNIFAB and its counsel:
(i) A ▇▇▇▇ of sale substantially in the form attached
hereto as EXHIBIT 4.3 transferring to UNIFAB all of
Southern Rentals' right, title and interest in the
Assets;
(ii) Full and complete possession of the Assets;
(iii)Copies of the articles of organization, operating
agreement and bylaws of Southern Rentals, certified by
the secretary of Southern Rentals, together with a copy
of the duly authorized resolutions of the board of
managers and, if required by applicable law or its
organizational documents, the members, of Southern
Rentals authorizing the execution, performance and
delivery of this Agreement and the sale of the Assets;
and
(iv) Such other documents and instruments reasonably
necessary to effect the conveyance of title to the
Assets to UNIFAB.
(c) At the Closing of the Asset Purchase, UNIFAB will deliver to
Southern Rentals, in form and substance reasonably satisfactory to Southern
Rentals and its counsel, a ▇▇▇▇ of sale substantially in the form attached
hereto as EXHIBIT 4.3, pursuant to which UNIFAB will take possession of the
Assets.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF OBI,
SOUTHERN RENTALS, THE OBI SHAREHOLDERS,
AND THE SOUTHERN RENTALS MEMBERS
OBI (with respect to matters relating to itself and its Subsidiaries
only), Southern Rentals (with respect to matters relating to itself only),
each OBI Shareholder (with respect to matters relating to himself, OBI and
its Subsidiaries), and each Southern Rentals Member (with respect to
matters relating to itself and Southern Rentals), hereby represent and
warrant to and agree with UNIFAB and Sub, as of the date hereof and as of
the Closing Date, as follows:
Section 5.1 ORGANIZATION. OBI is a corporation and Southern Rentals
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Louisiana, and each of those
Entities has all requisite power and authority to carry on its respective
businesses as now being conducted and to own its respective properties.
Each of OBI and Southern Rentals is duly qualified to do business and is in
good standing in each state and foreign jurisdiction in which the character
or location of the properties owned or leased by it or the nature of the
business conducted by it makes such qualification necessary, except those
jurisdictions, if any, in which the failure to be so qualified would not
have, in the aggregate for all such jurisdictions, a Material Adverse
Effect.
Section 5.2 AFFILIATED ENTITIES. Except as set forth in SCHEDULE 5.2,
OBI does not, directly or indirectly, own of record or beneficially, or
have the right or obligation to acquire, any outstanding securities or
other interest in any corporation, limited liability company, partnership,
joint venture or other entity. Each entity listed on SCHEDULE 5.2
(individually a "Subsidiary" and, collectively, the "Subsidiaries") is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full power and authority to own,
lease, use and operate its properties and to conduct its business as and
where now owned, leased, used, operated and conducted. Each Subsidiary is
duly qualified to do business and in good standing in each jurisdiction in
which the nature of the business conducted by it or the property it owns,
leases or operates makes such qualification necessary, except such
jurisdictions, if any, in which the failure to be so qualified would not
have, in the aggregate for all such jurisdictions, a Material Adverse
Effect. Except as set forth in SCHEDULE 5.2, OBI is the sole legal,
beneficial and record owner, directly or indirectly, of all of the
outstanding ownership interests of each Subsidiary, all of which are owned
by OBI free and clear of all liens, claims and encumbrances. The
Subsidiaries have no assets or liabilities, and are not parties to any
agreements or contracts, other than those reflected on the OBI Financial
Statements.
Section 5.3 CAPITALIZATION. The authorized capital stock of OBI
consists exclusively of 1,000 shares of common stock, no par value per
share, of which 500 shares are issued and outstanding and held by the OBI
Shareholders in the respective amounts set forth on SCHEDULE 5.3, and no
shares are held in its treasury. The equity interest of Southern Rentals
are vested exclusively in the Southern Rentals Members in the respective
percentages set forth on SCHEDULE 5.3. All of such issued and outstanding
shares have been validly issued, are fully paid and nonassessable and were
issued in compliance with any rights of first refusal, in compliance with
all legal requirements and free of preemptive rights. No share of capital
stock of OBI has been, or may be required to be, reacquired by OBI for any
reason or is, or may be required to be, issued by OBI for any reason,
including, without limitation, by reason of any option, warrant, security
or right convertible into or exchangeable for such shares, or any agreement
to issue any of the foregoing. No shares of OBI Common Stock have been
issued to or are held by any Person who is not an OBI Shareholder.
Section 5.4 AUTHORITY; ENFORCEABLE AGREEMENTS.
(a) Each of OBI and Southern Rentals has the requisite power and
authority to enter into this Agreement and to consummate the transactions
described herein. The execution and delivery of this Agreement by OBI and
Southern Rentals and the consummation by OBI and Southern Rentals of the
transactions described herein have been duly authorized by all necessary
corporate action on the part of OBI and all requisite action on the part of
Southern Rentals, including without limitation approval of this Agreement
by the OBI board of directors in accordance with Section 112 of the LBCL
and the approval thereof by the OBI Shareholders being evidenced by their
execution of this Agreement.
(b) This Agreement has been duly executed and delivered by OBI,
Southern Rentals, the OBI Shareholders and the Southern Rentals Members and
constitutes valid and binding obligations of OBI and Southern Rentals,
respectively, enforceable in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles. The other agreements entered, or to be
entered, into by OBI and Southern Rentals in connection with this Agreement
have been, or will be, duly executed and delivered by OBI and Southern
Rentals, and constitute, or will constitute, valid and binding obligations
of OBI and Southern Rentals, respectively, enforceable in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally or by general equitable principles.
Section 5.5 NO CONFLICTS OR CONSENTS.
(a) Neither the execution, delivery or performance of this
Agreement by OBI, Southern Rentals, any OBI Shareholder or any Southern
Rentals Member, nor the consummation of the transactions contemplated
hereby will violate, conflict with, or result in a breach of any provision
of, constitute a default (or an event that, with notice or lapse of time or
both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any
adverse claim against any of the properties or assets of OBI or Southern
Rentals under, (i) the articles of incorporation, articles of organization,
bylaws, operating agreement or any other organizational documents of OBI or
Southern Rentals, (ii) any note, bond, mortgage, indenture, deed of trust,
lease, license, agreement or other instrument or obligation to which OBI or
Southern Rentals is a party, or by which OBI or Southern Rentals or any of
its assets are bound, (iii) any agreement or other instrument or obligation
to which any OBI Shareholder or Southern Rentals Member is a party or by
which any such person is bound, or (iv) any order, writ, injunction,
decree, judgment, statute, rule or regulation of any governmental body to
which OBI or Southern Rentals or any OBI Shareholder or Southern Rentals
Member is subject or by which OBI or Southern Rentals or any of its assets
are bound (an "Applicable Law").
(b) No consent or approval of any court, commission,
governmental body, regulatory agency, authority, political subdivision or
tribunal (a "Governmental Entity") is required by or with respect to OBI or
Southern Rentals, any OBI Shareholder, or any Southern Rentals Member in
connection with the execution and delivery of this Agreement by OBI and
Southern Rentals, the OBI Shareholders, and the Southern Rentals Members or
is necessary for the consummation of the Merger and the Asset Purchase and
the other transactions contemplated by this Agreement, except for: (i) the
filing and recordation requirements of the LBCL with respect to the
Certificate of Merger and the filing of appropriate documents with the
relevant authorities of other states in which OBI is qualified to do
business and (ii) such other consents, orders, authorizations,
registrations, declarations and filings, the failure to obtain or make
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on OBI or Southern Rentals and would not
materially impair the ability of OBI or Southern Rentals to perform its
obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby.
Section 5.6 ORGANIZATIONAL FORMALITIES; ORGANIZATIONAL DOCUMENTS;
SHAREHOLDER AND MEMBER AGREEMENTS AND BOARDS OF DIRECTORS AND MANAGERS.
(a) Except as set forth in SCHEDULE 5.6, OBI and each Subsidiary
has maintained its separate legal existence, has complied with all
necessary organizational formalities, has not commingled funds with any
other Person, and has substantially complied with all other similar
requirements so as to maintain its separate existence in any action
asserting that OBI or any Subsidiary is the alter ego of any Person, for
piercing of the corporate veil or for any other similar action.
(b) Each of OBI and Southern Rentals has delivered to UNIFAB
true and complete copies of (i) the organizational documents, including, as
applicable, articles of incorporation, articles of organization, by-laws,
operating agreement, as amended or restated through the date of this
Agreement, of itself and each of its Subsidiaries and (ii) minute books and
ownership records of itself and each of its Subsidiaries. The minute books
of OBI, Southern Rentals and such Subsidiaries contain complete and
accurate records of all actions of, as applicable, the shareholders,
members, directors and managers of OBI, Southern Rentals and such
Subsidiaries, including committees of such boards of directors and
managers. The stock transfer records of OBI contain complete and accurate
records of all issuances and redemptions of stock by OBI. There are no
agreements among or between any OBI Shareholders with respect to the
capital stock of OBI, and there are no agreements among or between any
Southern Rentals Members with respect to Southern Rentals Membership
Interests.
Section 5.7 FINANCIAL STATEMENTS; LIABILITIES.
(a) Copies of the OBI Financial Statements are attached hereto
as SCHEDULE 5.7. The OBI Audited Financial Statements have been audited by
independent accountants in accordance with generally accepted auditing
standards, have been prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied during the periods
involved, except as may be noted therein, and present fairly the financial
position of OBI as of such dates and the results of operations and cash
flow of OBI for the periods set forth therein. The OBI Interim Financial
Statements have been compiled by a certified public accountant and have
been prepared in accordance with GAAP consistently applied during the
periods involved, except as set forth in SCHEDULE 5.7(A) and except for
normal year-end audit adjustments that would not be material in amount or
effect. Except as and to the extent set forth on the OBI Latest Balance
Sheet, including all notes thereto, OBI has no material liability or
obligation of any nature (whether accrued, absolute, contingent or
otherwise), except liabilities arising since the date of the OBI Latest
Balance Sheet.
(b) Except as set forth in SCHEDULE 5.7(A), the OBI Latest
Balance Sheet includes appropriate reserves for all Taxes and other
liabilities incurred as of such date but not yet payable.
(c) Since the date of the OBI Latest Balance Sheet, there have
been no changes that have had or are likely to have a Material Adverse
Effect on OBI.
(d) The statements of income included in the OBI Financial
Statements do not contain any income or revenue realized from products or
services that OBI would be prohibited or restricted from offering after the
Closing Date pursuant to any covenant or provision in any material contract
to which OBI is a party.
Section 5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of
the OBI Latest Balance Sheet, OBI has conducted its business only in the
ordinary course consistent with its prior practice and has not:
(a) amended, as applicable, its respective articles of
incorporation, articles of organization, by-laws, operating agreement or
similar organizational documents;
(b) except as provided in the Loan Agreement, incurred any
liability or obligation of any nature (whether absolute or contingent,
accrued, fixed, known, unknown, matured or unmatured), except in the
ordinary course of business and consistent with its prior practice,
exceeding $10,000 individually or $50,000 in the aggregate;
(c) except as provided in the Loan Agreement, suffered or
permitted any of its assets to become subject to any mortgage or other
encumbrance;
(d) except as contemplated in this Agreement, merged or
consolidated with another entity or acquired or agreed to acquire any
business or any corporation, partnership or other business organization, or
sold, leased, transferred or otherwise disposed of any assets except for
fair value in the ordinary course of business;
(e) made any capital expenditure or commitment therefor, except
in the ordinary course of business consistent with its prior practice,
exceeding $10,000 individually or $50,000 in the aggregate;
(f) declared or paid any dividend or made any distribution with
respect to any of its equity interests or membership interests, or
redeemed, purchased or otherwise acquired any of its equity interests or
membership interests, or issued, sold or granted any equity interests or
membership interests or any option, warrant or other right to purchase or
acquire any such interests;
(g) adopted any employee benefit plan or made any change in any
existing employee benefit plans or made any bonus or profit sharing
distribution or payment of any kind;
(h) except as provided in the Loan Agreement, increased
indebtedness for borrowed money or made any loan to any Person;
(i) made any change affecting any banking, safe deposit or power
of attorney arrangements;
(j) except as set forth in SCHEDULE 5.8(J), entered into or
amended any employment, severance or similar agreement or arrangement with
any director, manager or employee or granted any increase in the rate of
wages, salaries, bonuses or other compensation or benefits of any executive
or other employee;
(k) canceled, waived, released or otherwise compromised any
debt, claim or right other than contract modifications negotiated with
customers in the ordinary course of business, none of which modifications
is expected to have a Material Adverse Affect on OBI;
(l) made any change in any method of accounting or auditing
practice;
(m) suffered the termination, suspension or revocation of any
license or permit necessary for the operation of any material aspect of its
business;
(n) entered into any transaction other than on an arm's-length
basis;
(o) agreed, whether or not in writing, to do any of the
foregoing; or
(p) suffered any damage, destruction or loss (whether or not
covered by insurance) that has had or could have a Material Adverse Effect
on it.
Section 5.9 CONTRACTS. Except as provided in this Agreement or the
Loan Agreement and as may be set forth on SCHEDULE 5.9, OBI is not a party
to: (i) any collective bargaining agreement; (ii) any written or oral
employment or other agreement or contract with or commitment to any
employee; (iii) any agreement, contract or commitment containing any
covenant limiting its freedom to engage in any line of business or to
compete with any Person; (iv) any oral or written obligation or guaranty or
indemnification arising from any agreement, contract or commitment, except
as provided in, to the extent applicable, its articles of incorporation,
articles of organization, by-laws, or operating agreement; (v) any joint
venture, partnership or similar contract involving a sharing of profits or
expenses other than its agreement with UNIFAB concerning operations at
UNIFAB's Lake ▇▇▇▇▇▇▇ facility; (vi) any non-disclosure agreement, non-
competition agreement, agreement with any person who is or was an officer,
director, manager, or employee of OBI, tax indemnity, tax sharing or tax
allocation agreement, or severance, bonus or commission agreement; (vii)
any indenture, mortgage, loan, credit, sale-leaseback or similar contract
under which OBI has borrowed any money or issued any note, bond or other
evidence of indebtedness for borrowed money or guaranteed indebtedness for
money borrowed by others; or (viii) any hedge, swap, exchange, futures or
similar agreements or contracts.
Section 5.10 PROPERTIES AND LEASES.
(a) OBI does not own any real (immovable) property. OBI has,
except with respect to assets disposed of for adequate consideration in the
ordinary course of business, consistent with prior practices (none of
which are material to the operations of their respective businesses), good
and merchantable title to all other properties and assets reflected in the
OBI Latest Balance Sheets, free and clear of all Liens, except for (i)
Liens that secure indebtedness that is properly reflected in the OBI Latest
Balance Sheets, (ii) Liens for Taxes accrued but not yet payable; (iii)
mechanic's, worker's, materialmen's, operator's or other Liens arising as a
matter of law in the ordinary course of business with respect to
obligations incurred after the date of the OBI Latest Balance Sheets,
provided that the obligations secured by such Liens are not delinquent and
(iv) the security interests that secure the Entities' indebtedness to
UNIFAB under the Loan Agreement. Each of OBI owns, or has valid leasehold
interests in, all properties and assets used in the conduct of its
business.
(b) All of the Assets are in good operating condition, ordinary
wear and tear excepted, except that the Assets identified in SCHEDULE
5.10(B)(1) are subject to customary maintenance requirements. Southern
Rentals has good and marketable title to, and has the right to use and
transfer to OBI, the Assets, and the Assets are free and clear of all
Liens, encumbrances, obligations and claims of any kind or nature
whatsoever, other than the security interests that secure the Entities'
indebtedness to UNIFAB under the Loan Agreement. Except as set forth in
SCHEDULE 5.10(B)(2), as provided in the Loan Agreement or as contemplated
in this Agreement, none of the Assets are subject to or held under any
lease, mortgage, security agreement, conditional sales contract or other
title retention agreement, and all of the Assets are in the sole
possession and under the sole control of Southern Rentals or OBI. Except
as provided in the Loan Agreement and as contemplated in this Agreement,
the delivery to OBI of the instruments of transfer of ownership of the
Assets contemplated by this Agreement will vest good, marketable and
exclusive title to the Assets to OBI, free and clear of all Liens,
encumbrances, obligations, restrictions and claims of any kind or nature
whatsoever.
(c) Except as set forth in SCHEDULE 5.10(C),with respect to each
lease of any real (immovable) property or any material personal (movable)
property to which OBI is a party, (i) OBI, has a valid leasehold interest
in such property, (ii) such lease is in full force and effect in accordance
with its terms; (iii) all rents and other monetary amounts that have become
due and payable thereunder have been paid in full; (iv) no waiver,
indulgence or postponement of the obligations thereunder has been granted
by the other party thereto; (v) there exists no material default (or an
event that, with notice or lapse of time or both would constitute a
default) under such lease; (vi) OBI has not violated any of the terms or
conditions under any such lease and no OBI Shareholder has knowledge, that
(A) any condition or covenant to be observed or performed by any other
party under any such lease has not been fully observed and performed and
(B) in the case of each prime lease concerning demised premises subleased
to OBI, any condition or covenant to be observed or performed by each party
thereto has not been fully observed and performed or that there exists any
event of default or event, occurrence, condition or act that, with the
giving of notice, the lapse of time or the happening of any further event
or condition, would become a default under any such prime lease; and (vii)
the transactions described in this Agreement will not constitute a default
under or cause for termination or modification of any such lease.
(d) Except as set forth on SCHEDULE 5.10(D), each of the
buildings and premises owned or leased by OBI is in a state of good
maintenance and repair (ordinary wear and tear excepted) and is adequate
for the purposes for which it is currently used.
(e) Except as set forth on SCHEDULE 5.10(E), there are no leases
between OBI and Southern Rentals or between OBI and any of its Affiliates.
(f) SCHEDULE 5.10(F) hereto contains an accurate and complete
list of all material domestic and foreign letters patent, patents, patent
applications, patent license, software licenses, know-how licenses, trade
names, trademarks, copyrights, service marks, trademark registrations and
applications, service ▇▇▇▇ registrations and applications and copyright
registrations and applications owned, used by or expected to be used by OBI
in the operation of its business (collectively the "Intellectual
Property"). No OBI Shareholder, except as stated in SCHEDULE 5.10(F),
knows of any adverse claims affecting or with respect to the Intellectual
Property. SCHEDULE 5.10(F) lists all notices or claims currently pending
or received by OBI of any domestic or foreign letters patent, patent
licenses and know-how licenses, trade marks, copyrights, copyright
registrations, trade secrets or other confidential proprietary information.
Except as set forth in SCHEDULE 5.10(F) hereto, no OBI Shareholder knows of
any reasonable basis upon which a claim may be asserted against either OBI
for infringement or breach of any domestic or foreign letters patent,
patents, patent licenses and know-how licenses, trade names, trademark
registrations, common law trademarks, service marks, copyrights, copyright
registrations, trade secrets or other confidential proprietary information.
No OBI Shareholder has knowledge, except as set forth on SCHEDULE 5.10(F),
that any Person is infringing the Intellectual Property. Each material
item of Intellectual Property owned or used by OBI or any of its respective
Affiliates immediately prior to the Closing Date hereunder will be owned or
available for use by OBI on identical terms and conditions immediately
subsequent to the Closing Date.
Section 5.11 VOTING REQUIREMENTS. The affirmative vote of two-thirds
of the holders of the outstanding shares of OBI Common Stock present and
entitled to vote on the Merger and the vote of a majority of the Southern
Rentals Members entitled to vote on the Asset Purchase are the only votes
of the holders of any class or series of OBI's capital stock and the only
votes of any Southern Rentals Members, respectively, necessary to approve
this Agreement and the transactions described herein.
Section 5.12 SUPPLIERS AND CUSTOMERS. No OBI Shareholder has
knowledge that (a) any supplier providing products, materials or services
to OBI intends to cease selling such products, materials or services to OBI
or to limit or reduce such sales to OBI or materially alter the terms or
conditions of any such sales or (b) any customer of OBI intends to
terminate, limit or reduce its business relations with OBI.
Section 5.13 EMPLOYEE MATTERS.
(a) SCHEDULE 5.13(A) sets forth with respect to OBI the name,
title, current annual compensation rate (including bonus and commissions),
current base salary rate, accrued bonus, accrued sick leave, accrued
severance pay and accrued vacation benefits of each officer; organizational
charts; employment, consulting, employee, confidentiality, non-competition
and similar agreements; any employee handbook(s); and any reports or plans
prepared or adopted pursuant to the Equal Employment Opportunity Act of
1972, as amended or Executive Order No. 11246.
(b) Each of the following is true:
(i) OBI is in substantial compliance with all applicable
laws respecting employment and employment practices,
terms and conditions of employment, wages and hours and
occupational safety and health, and is not engaged in
any unfair labor practice within the meaning of
Section 9 of the National Labor Relations Act, and
there is no proceeding pending or threatened, or any
investigation pending or threatened against OBI
relating to any thereof, and no OBI Shareholder has any
knowledge of any basis for any such proceeding or
investigation;
(ii) none of the employees of OBI is a member of, or
represented by, any labor union and there are no
efforts being made to unionize any of such employees;
and
(iii)except as set forth in SCHEDULE 5.13(B), there are no
charges or formal complaints of, or proceedings
involving, discrimination or harassment (including but
not limited to discrimination or harassment based upon
sex, age, marital status, race, religion, color, creed,
national origin, sexual preference, handicap or veteran
status) pending or threatened and there are no informal
or internal complaints thereof, nor is there any
investigation thereof pending, including, but not
limited to, investigations before the Equal Employment
Opportunity Commission or any federal, state or local
agency or court, with respect to OBI or Southern
Rentals, and no OBI Shareholder has knowledge of any
such investigation that is threatened.
Section 5.14 EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 5.14(A) lists each Employee Plan that OBI
maintains, administers, contributes to, or has any contingent liability
with respect to. OBI has provided a true and complete copy of each
Employee Plan, current summary plan description, (and, if applicable,
related trust documents) and all amendments thereto and written
interpretations thereof together with each of the following with respect to
each such Employee Plan: (i) the three most recent annual reports (Form
5500 including, if applicable, Schedule B thereto); (ii) the most recent
actuarial report, if any, and trust reports; (iii) all material
communications received from or sent to the IRS or the Department of Labor
within the last two years (including a written description of any oral
communications); (iv) the most recent IRS determination letter and the most
recent application for a determination letter; (v) all insurance contracts
or other funding arrangements; (vi) an actuarial study of any post-
employment life or medical benefits, if any; and (vii) a five-year
contribution history indicating the dollar amount contributed and the level
of contribution as a percentage of compensation of covered participants for
each profit sharing plan, stock bonus plan or other retirement plan to
which OBI makes discretionary contributions in connection with each
Employee Plan.
(b) SCHEDULE 5.14(B) identifies each Benefit Arrangement that
OBI maintains, administers, contributes to, or has any contingent liability
with respect thereto. OBI has furnished to UNIFAB copies or descriptions
of each Benefit Arrangement and any of the information set forth in Section
5.14(a) applicable to any such Benefit Arrangement. Each Benefit
Arrangement has been maintained and administered in substantial compliance
with its terms and with the requirements (including reporting requirements)
prescribed by any and all statutes, orders, rules and regulations that are
applicable to such Benefit Arrangement.
(c) Benefits under any Employee Plan or Benefit Arrangement are
as represented in said documents and have not been increased or modified
(whether written or not written) subsequent to the dates of such documents.
OBI has not communicated to any employee or former employee any intention
or commitment to modify any Employee Plan or Benefit Arrangement or to
establish or implement any other employee or retiree benefit or
compensation arrangement.
(d) No Employee Plan is (i) a Multiemployer Plan, (ii) a Title
IV Plan or (iii) is maintained in connection with any trust described in
Section 501(c)(9) of the Code. OBI has never maintained or become
obligated to contribute to any employee benefit plan (i) that is subject to
Title IV of ERISA, (ii) to which Section 412 of the Code applies, or
(iii) that is a Multiemployer Plan. OBI has not within the last five years
engaged in, or is a successor corporation to an entity that has engaged in,
a transaction described in Section 4069 of ERISA.
(e) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during
the period from its adoption to date, and no event has occurred since such
adoption that would adversely affect such qualification and each trust
created in connection with each such Employee Plan forming a part thereof
is exempt from tax pursuant to Section 501(a) of the Code. A favorable
determination letter has been issued by the IRS as to the qualification of
each such Employee Plan under the Code and to the effect that each such
trust is exempt from taxation under Section 501(a) of the Code. Each
Employee Plan has been maintained and administered in compliance with its
terms and with the requirements (including reporting requirements)
prescribed by any and all applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Code.
(f) Neither OBI nor any trade or business under common control
with OBI within the meaning of Section 414(b) or (c) of the Code prior to
the Closing Date maintains any controlled group plan or other plan that is
subject to Title IV of ERISA or subject to Section 412 of the Code or Part
3 of Subtitle B of Title I of ERISA.
(g) Full payment has been made of all amounts that OBI is or has
been required to have paid as contributions to or benefits due under any
Employee Plan or Benefit Arrangement under applicable law or under the
terms of any such plan or any arrangement.
(h) Neither OBI nor any of its directors, managers, officers,
employees or Affiliates has engaged in any transaction with respect to an
Employee Plan that could subject OBI to a tax, penalty or liability for a
prohibited transaction, as defined in Section 406 of ERISA or Section 4975
of the Code. None of the assets of any Employee Plan are invested in
employer securities or employer real property.
(i) No OBI Shareholder has knowledge of facts or circumstances
that might give rise to any liability under Title I of ERISA.
(j) There is no litigation, administrative or arbitration
proceeding or other dispute pending or threatened that involves any
Employee Plan or Benefit Arrangement that could reasonably be expected to
result in a liability to OBI or the Surviving Entity.
(k) No employee or former employee of OBI will become entitled
to any bonus, retirement, severance, job security or similar benefit or
enhanced benefit (including acceleration of an award, vesting or exercise
of an incentive award) or any fee or payment of any kind solely as a result
of any of the transactions contemplated hereby, except as disclosed on
SCHEDULE 5.14(K), and no such disclosed payment constitutes a parachute
payment described in Section 280G of the Code.
(l) All group health plans of OBI have at all times fully
complied with all applicable notification and continuation coverage
requirements of Section 4980B(f) of the Code and Section 601 of ERISA, and
the regulations promulgated thereunder. OBI has no current or projected
liability in respect of post-retirement or post-employment welfare benefits
for retired, current or former employees, or for any shareholder, member,
director or manager who is not an employee, former employee or beneficiary
thereof, except to the extent otherwise required by the continuation
requirements of Section 4980B(f) of the Code and Section 601 of ERISA.
(m) All group health plans (within the meaning of Section
5000(b)(1) of the Code) of OBI have at all times fully complied with, and
have been maintained and operated in accordance with each of the health
care requirements relating to portability, access, and renewability
requirements of Sections 9801 through 9803 of the Code and Part 7 of Title
I, Subtitle B of ERISA and the regulations promulgated thereunder.
(n) All group health plans (within the meaning of Section
5000(b)(1) of the Code) of OBI have at all times fully complied with, and
have been maintained and operated in accordance with each of the health
care requirements relating to the benefits for mothers and newborns under
Section 9811 of the Code and Section 711 of ERISA and the regulations
promulgated thereunder.
(o) All group health plans (within the meaning of Section
5000(b)(1) of the Code) of OBI have at all times fully complied with, and
have been maintained and operated in accordance with each of the health
care requirements relating to the parity provisions applicable to mental
health benefits under Section 9812 of the Code and Section 712 of ERISA and
the regulations promulgated thereunder.
(p) No employee or former employee, officer, director or manager
of OBI is or will become entitled to receive any award under any
discretionary or other bonus plan of OBI except for amounts reflected on
the OBI Latest Balance Sheet.
Section 5.15 TAX MATTERS. Each of the following is true with respect
to OBI:
(a) All Returns have been or will be timely filed by each of OBI
when due in accordance with all applicable laws; all Taxes shown on the
Returns have been or will be timely paid when due; the Returns have been
properly completed in compliance with all applicable laws and regulations
and completely and accurately reflected the facts regarding the income,
expenses, properties, business and operations required to be shown thereon;
the Returns are not subject to penalties under Section 6662 of the Code (or
any corresponding provision of state, local or foreign tax law);
(b) OBI has paid all Taxes required to be paid by it (whether or
not shown on a Return) or for which it could be liable, whether to taxing
authorities or to other persons under tax allocation agreements or
otherwise, and the charges, accruals, and reserves for Taxes due, or
accrued but not yet due, relating to its income, properties, transactions
or operations for any Pre-Closing Period as reflected on its books
(including, without limitation, the OBI Latest Balance Sheet are adequate
to cover such Taxes;
(c) There are no agreements or consents currently in effect for
the extension or waiver of the time (i) to file any Return or (ii) for
assessment or collection of any Taxes relating to the income, properties or
operations of OBI for any Pre-Closing Period, and OBI has not been
requested to enter into any such agreement or consent;
(d) Except as disclosed on SCHEDULE 5.15(D), there are no Liens
for Taxes (other than for current Taxes not yet due and payable) upon the
assets of OBI;
(e) All material elections with respect to Taxes affecting OBI,
are set forth separately in SCHEDULE 5.15(E);
(f) All Taxes that OBI are required by law to withhold or
collect have been duly withheld or collected, and have been timely paid
over to the appropriate governmental authorities to the extent due and
payable;
(g) SCHEDULE 5.15(G) hereto sets forth separately (A) the
taxable years of each of OBI as to which the respective statutes of
limitations with respect to Taxes have not expired, and (B) with respect to
such taxable years sets forth those years for which examinations have not
been completed, those years for which examinations are currently being
conducted, those years for which examinations have not been initiated, and
those years for which required Returns have not yet been filed. SCHEDULE
5.15(G) lists each state and foreign jurisdiction, respectively, in which
OBI has, in the last three years, filed a Return, and no Return is required
for any other state or foreign jurisdiction;
(h) All tax deficiencies that have been asserted or claimed or
proposed against OBI ("Tax Deficiencies") has been fully paid or finally
settled, and no issue has been raised in any examination that, by
application of similar principles, can be expected to result in the
proposal or assertion of a Tax Deficiency for any other year not so
examined;
(i) Except as disclosed on SCHEDULE 5.15(I), no OBI Shareholder
knows of facts that would constitute the basis for the proposal or
assertion of any Tax Deficiencies for any unexamined year or for the
recharacterization of any item of income, expense or deduction set forth on
the applicable Returns and OBI has complied in all material respects with
all applicable Tax laws;
(j) OBI is not a party to any agreement, contract, arrangement
or plan that would result, separately or in the aggregate, in the payment
of any "excess parachute payments" within the meaning of Code Section 280G
(or any comparable provision of state or local law);
(k) OBI has not agreed, nor is it required, to make any
adjustment under Code Section 481(a) (or any comparable provision of state
or local law) by reason of a change in accounting method or otherwise;
(l) OBI has not filed a consent pursuant to the collapsible
corporation provisions of Section 341(f) of the Code (or any corresponding
provision of state, local or foreign income law) or agreed to have Section
341(f)(2) of the Code (or any corresponding provision of state, local or
foreign income law) apply to any disposition of any asset owned by it;
(m) None of the assets of OBI are property that OBI is required
to treat as being owned by any other Person pursuant to the so-called "safe
harbor lease" provisions of former Section 168(f)(8) of the Code;
(n) None of the assets of OBI directly or indirectly secure any
debt, the interest on which is tax exempt under Section 103(a) of the Code;
(o) None of the assets of OBI are "tax-exempt use property"
within the meaning of Section 168(h) of the Code;
(p) OBI has not made a deemed dividend election under former
Section 1.1502-32(f)(2) of the Treasury Regulations or a consent dividend
election under Section 565 of the Code;
(q) OBI has never been a member of an affiliated group filing
consolidated returns other than a group of which OBI is the parent
corporation;
(r) There are no outstanding balances of deferred gain or loss
accounts related to deferred intercompany transactions with respect to OBI
under Sections 1.1502-13 or 1.1502-14 of the Treasury Regulations; and
(s) OBI is not and has never been a party to any tax sharing
agreement, has assumed the liability of any other person under contract or
has any liability under Section 1.1502-6 of the Treasury Regulations or
analogous state, local or foreign law.
Section 5.16 LITIGATION. Except as disclosed on SCHEDULE 5.16 and
excepting matters being defended by insurers and covered by insurance
contracts maintained by OBI, copies of which insurance contracts have been
supplied to UNIFAB, there are no actions, suits, proceedings, arbitrations
or investigations pending or, to the knowledge of any of the OBI
Shareholders, threatened before any court, any governmental agency or
instrumentality or any arbitration panel, against or affecting OBI or any
OBI director, manager, officer, or employee, and no OBI Shareholder knows
of any basis therefor. OBI is not subject to any currently pending
judgment, order or decree entered in any lawsuit or proceeding.
Section 5.17 ENVIRONMENTAL COMPLIANCE.
(a) To its knowledge, OBI possesses all necessary licenses,
permits and other approvals and authorizations that are required under, and
are, and at all times have been, in material compliance with such licenses,
permits and other approvals and authorizations and are, and at all times
have been, in material compliance with, all federal, state, local and
foreign laws, common law duties, ordinances, codes and regulations relating
to pollution or the protection of the environment (collectively,
"Environmental Laws"), including without limitation all Environmental Laws
governing the generation, use, collection, treatment, storage,
transportation, recovery, removal, discharge, manufacture, processing,
distribution, handling or disposal of hazardous substances or wastes, and
all Environmental Laws imposing record-keeping, maintenance, testing,
inspection, notification and reporting requirements with respect to
hazardous substances or wastes. For purposes of this Agreement, "hazardous
substances" and "hazardous wastes" are materials defined as "hazardous
substances," "hazardous wastes," "hazardous constituents," "toxic
substances," or "radioactive materials" in (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Sections 9601-9675, as amended by the Superfund Amendments and
Reauthorization Act of 1986, and any amendments thereto and regulations
thereunder; (ii) the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Sections 6901-6992, as amended by the Hazardous and Solid Waste
Amendments of 1984, and any amendments thereto and regulations thereunder;
(iii) the Clean Air Act, 42 U.S.C. 7401, et. seq., and any amendments
thereto and regulations thereunder; (iv) the Clean Water Act, 33 U.S.C.
1251, et. seq., and any amendments thereto and regulations thereunder; (v)
the Toxic Substances Control Act, 15 U.S.C. 2601, et. seq.; (vi)
the Atomic Energy Act, 42 U.S.C. 2011, et. seq.; (vii) the Oil
Pollution Act of 1990, 33 U.S.C. Sections 2701-2761, and any amendments
thereto and regulations thereunder; and (viii) any other federal, state,
local or foreign Environmental Law or regulation.
(b) Except as disclosed in SCHEDULE 5.17(B), no Environmental
Claims have been asserted within the past five years against OBI or any of
its predecessors-in-interest regarding (i) the operations of OBI or any of
its predecessors-in-interest, (ii) the assets of OBI or any of its
predecessors-in-interest, or (iii) any properties now or previously owned
or leased by OBI or any of its predecessors-in-interest. No Environmental
Claims are pending or, to the knowledge of OBI, threatened against OBI or
any of its predecessors-in-interest that are reasonably likely to result in
Environmental Liabilities regarding (i) the operations of OBI or any of its
predecessors-in-interest, (ii) the assets of OBI or any of its
predecessors-in-interest, or (iii) any properties now or previously owned
or leased by OBI or any of its predecessors-in-interest. No OBI Shareholder
has knowledge of any Environmental Claims that have been asserted against
any facilities that may have received Hazardous Materials generated by OBI
or any of its predecessors-in-interest that are reasonably likely to result
in an Environmental Liability.
(c) Except as disclosed on SCHEDULE 5.17(C) or in an
Environmental Report referred to in Section 5.17(f), there are no Hazardous
Materials used, disposed of, discharged or stored by OBI, and any Hazardous
Materials disclosed on SCHEDULE 5.17(C) as used, disposed of, discharged or
stored are and have been so used, disposed of, discharged or stored in
compliance with Environmental Laws. To the knowledge of each OBI
Shareholder, there has been no Release (i) at any of the properties now or
previously owned, operated or leased by OBI or any of its predecessors-in-
interest, (ii) from any assets owned, leased or operated by OBI or any of
its predecessors-in-interest, or (iii) at any disposal, storage or
treatment facility that received Hazardous Materials generated by OBI or
any of its predecessors-in-interest that is reasonably likely to result in
an Environmental Liability. OBI has not engaged any person to handle,
transport or dispose of Hazardous Materials on their behalf, and the
disposal by OBI of its Hazardous Materials has been in compliance with all
Environmental Laws.
(d) To OBI's knowledge, there are no underground tanks, active
or abandoned, of any type (including tanks storing gasoline, diesel fuel,
oil or other petroleum products) or disposal sites for hazardous
substances, hazardous wastes or any other waste, located on or under the
real estate currently owned, leased or used by OBI and there were no such
disposal sites located on or under the real estate previously owned, leased
or used by OBI on the date of the sale thereof by OBI or during the period
of lease for use by OBI.
(e) To OBI's knowledge, there are no past or present events,
conditions, circumstances, activities or practices that may interfere with
or prevent continued compliance with Environmental Laws.
(f) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses (collectively, "Environmental
Reports") conducted by, or that are in the possession or control of, OBI
that have been provided to a Governmental Entity in relation to any
premises owned, operated or leased by OBI. OBI has caused UNIFAB to be
provided with complete copies of any Environmental Reports referenced
therein.
Section 5.18 COMPLIANCE WITH LAW; PERMITS; SAFETY AND HEALTH. The
representations made by the OBI Shareholders and the Southern Rentals
Members in this Section 5.18 are to their knowledge only.
(a) The operations and activities of OBI and the ownership and
operation of the Assets by Southern Rentals comply in all material respects
with all applicable laws, regulations, ordinances, rules or orders of any
federal, state or local court or any governmental authority.
(b) Each of OBI and Southern Rentals possesses all governmental
licenses, permits and other governmental authorizations that are (i)
required under all federal, state and local laws and regulations for the
ownership, use and operation of its assets or (ii) otherwise necessary to
permit the conduct of its business without interruption, and such licenses,
permits and authorizations are in full force and effect and have been and
are being complied with by OBI and Southern Rentals. Neither OBI nor
Southern Rentals has received written notice of any violation of any of the
terms or conditions of any such license, permit or authorization and there
are no facts or circumstances that could form the basis of a revocation,
claim, citation or allegation against it for a violation of any such
license, permit or authorization. No such license, permit or authorization
or any renewal thereof will be terminated, revoked, suspended, modified or
limited in any respect as a result of the transactions contemplated by this
Agreement. All such licenses, permits and authorizations are listed in
SCHEDULE 5.18(B) and copies thereof have been delivered to UNIFAB.
(c) The property and assets of OBI and the Assets of Southern
Rentals have been and are being operated in compliance in all material
respects with all Applicable Laws designed to protect safety or health, or
both, including, without limitation, the Occupational Safety and Health Act
and the regulations promulgated pursuant thereto. Neither OBI nor Southern
Rentals has received any written notice of any violation, deficiency,
investigation or inquiry from any Governmental Entity, employer or third
party under any such Applicable Law and no OBI Shareholder or Southern
Rentals Member knows of any such investigation or inquiry that is planned
or threatened.
Section 5.19 TRANSACTIONS WITH RELATED PARTIES. Except for payments
to employees of salaries, wages and reimbursement of expenses incurred in
the course of their employment and consistent with past practices,
(a) SCHEDULE 5.19(A) lists all transactions between the date of
the OBI Latest Balance Sheet and the date of this Agreement involving or
for the benefit of OBI, on the one hand, and any person who is or was a
shareholder, director, or officer of OBI or an Affiliate of such
shareholder, director, or officer on the other hand, including (i) any
debtor or creditor relationship, (ii) any transfer or lease of real or
personal property, (iii) wages, salaries, commissions, bonuses and
agreements relating to employment, and (iv) purchases or sales of products
or services.
(b) SCHEDULE 5.19(B) lists (i) all material agreements, debts,
obligations, and claims of any nature that any person who is or was a
shareholder, director, or officer of OBI or an Affiliate of such
shareholder, director or officer has with, from, or against OBI as of the
date of this Agreement that are not specifically identified on the OBI
Latest Balance Sheet and (ii) all material agreements, debts, obligations,
and claims of any nature that OBI has with, from, or against any person who
is or was a shareholder, director or officer of OBI or Affiliate of such
shareholder, director or officer as of the date of this Agreement that are
not specifically identified on the OBI Latest Balance Sheet.
Section 5.20 BROKER'S AND FINDER'S FEE. Except as set forth in the
letter agreement dated April 2, 1998, between OBI and ▇▇▇▇▇▇▇ & Company
International (the "▇▇▇▇▇▇▇ Agreement"), no agent, broker, Person or firm
acting on behalf of OBI or Southern Rentals is or will be entitled to any
commission or broker's or finder's fee from any of the parties hereto, or
from any person controlling, controlled by or under common control with any
of the parties hereto, in connection with any of the transactions
contemplated herein.
Section 5.21 INSURANCE. The insurance maintained by OBI on its
assets, business and personnel is of the kind and amount reasonable and
adequate for the business of OBI, is in accordance with the good business
practice standards of the industry in which OBI operates, and is under
policies currently in effect issued by financially sound insurers of
recognized responsibility. The material insurance policies (other than the
employee benefit insurance policies listed on Schedule 5.14) maintained by
OBI, together with their respective policy limits and deductibles, are
listed on SCHEDULE 5.21. All such policies will be in effect on the
Closing Date. The business of OBI has been conducted in a manner so as to
conform in all material respects to all applicable provisions of such
insurance policies. All premiums due, for which invoices have been
received, have been currently paid or provided for, and none of the
policies contains retroactive premium adjustment provisions. OBI is not in
default with respect to any such policy. OBI has not failed to give any
notice or present any claim under any such policy in a due and timely
manner. There are no outstanding unpaid claims or matters that could
reasonably be anticipated to become claims under any such policy other than
any pending claims or matters listed on SCHEDULE 5.21. OBI has not
received notice of cancellation or non-renewal of any insurance policy or
any notice that coverage has been or may be denied with respect to any
outstanding claim by or against it (other than routine reservation of
rights notices by insurers in circumstances under which OBI has no reason
to believe that the insurer reserving its rights will actually subsequently
dispute coverage).
Section 5.22 MATERIALITY. Where representations and warranties are
made in Article 5 the performance and fulfillment of which are qualified as
to materiality, such qualification as to all such representations and
warranties does not, in the aggregate, have a Material Adverse Effect.
Section 5.23 DISCLOSURE. To the knowledge of each OBI Shareholder and
each Southern Rentals Member, no representations or warranties by any of
them in this Agreement and no statement contained in any document
(including, without limitation, the financial statements, certificates, or
other writings) furnished or to be furnished by OBI or Southern Rentals to
UNIFAB or any of its representatives pursuant to the provisions hereof or
in connection with the transactions contemplated hereby contains or will
contain any untrue statement of material fact or omits or will omit to
state any material fact necessary, in light of the circumstances under
which it was made, in order to make the statements herein or therein not
misleading.
Section 5.24 REPRESENTATION; UNIFAB DISCLOSURE DOCUMENTS. Each of
OBI, the OBI Shareholders, Southern Rentals and the Southern Rentals
Members 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 business and affairs of UNIFAB, and has
availed itself of such opportunity either directly or through legal counsel
and other authorized representatives. OBI, the OBI Shareholders, Southern
Rentals and the Southern Rentals Members acknowledge that they have
received from UNIFAB and have reviewed with their representatives a copy of
each of the following documents (the "UNIFAB Disclosure Documents"):
UNIFAB's prospectus dated September 18, 1997 relating to 2,815,000 shares
of UNIFAB International, Inc. Common Stock; UNIFAB's reports to the SEC on
Form 10-Q for the quarters ended September 30, 1997, December 31, 1997,
June 30, 1998, September 30, 1998 and December 31, 1998; UNIFAB's reports
on Form 8-K filed with the SEC on February 20, 1998 (as amended by means
of a Form 8-K/A filed with the SEC on April 22, 1998) and on August 10,
1998 (as amended by means of a Form 8-K/A filed with the SEC on October 9,
1998); and UNIFAB's Form 10-K for the fiscal year ended March 31, 1998.
OBI, the OBI Shareholders, Southern Rentals and the Southern Rentals
Members acknowledge that they have received and reviewed, with adequate
time to do so, this Agreement, the UNIFAB Disclosure Documents, and such
additional information with respect to UNIFAB and the transactions
contemplated by this Agreement as they or their representatives have
requested.
ARTICLE 6. ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF THE OBI SHAREHOLDERS AND SOUTHERN RENTALS
Each OBI Shareholder also hereby represents and warrants to and agrees
with UNIFAB and OBI as of the date hereof and as of the Closing Date, as
follows, and Southern Rentals also hereby represents and warrants to and
agrees with UNIFAB and Sub as of the date hereof and of the Closing Date,
as set forth in Sections 6.2 through 6.4:
Section 6.1 OWNERSHIP AND TRANSFER OF SHARES. Each OBI Shareholder
(a) is the lawful owner of the number of shares of OBI Common Stock listed
opposite his name in SCHEDULE 6.1 hereof, free and clear of all Liens,
encumbrances, restrictions and claims of every kind (other than the
security interest that secures the Entities' indebtedness to UNIFAB under
the Loan Agreement); (b) has the absolute legal right, power and authority
to enter into this Agreement and to sell, assign, transfer, convey and
deliver the shares of OBI Common Stock so owned pursuant to this Agreement;
(c) is not a party to any option, warrant, purchase right, stock transfer
restriction, shareholder agreement, or other contract or commitment that
could require him to sell, transfer, or otherwise dispose of any capital
stock of OBI (other than this Agreement or the Loan Agreement); (d) is not
a party to any voting trust, proxy or other agreement or understanding with
respect to the voting of any capital stock of OBI; and (e) at the Effective
Time, UNIFAB will obtain record and beneficial ownership of all shares of
capital stock of OBI listed opposite each OBI Shareholder's name in
SCHEDULE 6.1 hereto, after giving effect to the Merger, free and clear of
any restrictions on transfer (other than restrictions under the Securities
Act and state securities laws), Taxes, security interests, options,
warrants, purchase rights, contracts, commitments, equities, claims and
demands.
Section 6.2 UNIFAB RELIANCE. Each of the OBI Shareholders and
Southern Rentals understands that UNIFAB in issuing the shares of UNIFAB
Common Stock pursuant to this Agreement is relying upon, among other
things, the representations warranties and agreements contained in this
Article in concluding that such issuance does not require compliance with
the registration requirements of the Securities Act.
Section 6.3 RESTRICTIVE LEGEND. The OBI Shareholders and Southern
Rentals understand and agree that all certificates evidencing shares of
UNIFAB Common Stock to be issued to them 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 issuer of such securities
that registration is not required.
Section 6.4 INVESTMENT REPRESENTATIONS. (a) Each of the OBI
Shareholders and Southern Rentals is acquiring shares of UNIFAB Common
Stock pursuant hereto for investment for its own accounts and has no
present intention of reselling or otherwise distributing or participating
in a distribution of such shares, except Southern Rentals may distribute
the shares of UNIFAB Common Stock to be acquired by it hereunder to the
Southern Rentals Members upon the liquidation or dissolution of Southern
Rentals; (b) each of the OBI Shareholders and Southern Rentals understands
that such shares will not be registered under the Securities Act, that such
shares will be "restricted securities" as that term is used in Rule 144 of
the SEC under the Securities Act ("Rule 144") and that such shares may not
be transferred unless they are subsequently registered under the Securities
Act and under any applicable State securities law or are transferred in a
transfer that is exempt from such registration; (c) UNIFAB is not obligated
by this Agreement to register such shares under the Securities Act or under
any such state laws and UNIFAB 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 UNIFAB, 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; (d) such shares of
UNIFAB 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 (currently one year) and other
requirements of Rule 144 have been satisfied; and (e) each of the OBI
Shareholders and Southern Rentals either (x) is an "accredited investor,"
as that term is defined in Rule 501(a) promulgated by the SEC under the
Securities Act, or (y) has such knowledge and experience in financial and
business matters that such person is capable of evaluating the risks and
merits of an investment in UNIFAB.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF UNIFAB AND SUB
UNIFAB and Sub represent and warrant to and agree with OBI, Southern
Rentals, the OBI Shareholders, and the Southern Rentals Members, as of the
date hereof and as of the Closing Date, as follows:
Section 7.1 ORGANIZATION. Each of UNIFAB and Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Louisiana and has all requisite power and authority to carry on
its respective businesses as now being conducted and to own its respective
properties. Each other member of the UNIFAB Affiliated Group is duly
organized under the laws of the state or foreign nation of its organization
and has all the requisite power and authority under the laws of such
jurisdiction to carry on its business as now being conducted and to own its
properties. Each member of the UNIFAB Affiliated Group is duly qualified
to do business and is in good standing in each state and foreign
jurisdiction in which the character or location of the properties owned or
leased by it or the nature of the business conducted by it makes such
qualification necessary, except those jurisdictions, if any, in which the
failure to be so qualified would not individually or in the aggregate have
a Material Adverse Effect.
Section 7.2 CAPITALIZATION.
(a) The authorized capital stock of UNIFAB consists exclusively
of 25 million shares of capital stock, comprised of (i) 20 million shares
of Common Stock, $.01 par value per share, of which 6,027,030 shares are
issued and outstanding and no shares are held in its treasury, and (ii) 5
million shares of preferred stock, no par value per share, none of which
are issued or outstanding. All of such issued and outstanding shares have
been validly issued, are fully paid and nonassessable and were issued free
of preemptive rights, in compliance with any rights of first refusal, and
in compliance with all legal requirements.
(b) UNIFAB is the sole shareholder of Sub and the owner of the
entire equity interest of Sub.
Section 7.3 AUTHORITY; ENFORCEABLE AGREEMENTS.
(a) UNIFAB and Sub each has the requisite power and authority
to enter into this Agreement and to consummate the transactions described
herein. The execution and delivery of this Agreement by UNIFAB and Sub and
the consummation by UNIFAB and Sub of the transactions described herein
have been duly authorized by all necessary corporate action on the part of
UNIFAB and on the part of Sub.
(b) This Agreement has been duly executed and delivered by
UNIFAB and Sub, and constitutes a valid and binding obligation of UNIFAB
and Sub, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally or by general equitable
principles. The other agreements entered, or to be entered, into by UNIFAB
and Sub in connection with this Agreement have been, or will be, duly
executed and delivered by UNIFAB and Sub, and constitute, or will
constitute, valid and binding obligations of UNIFAB and Sub, enforceable in
accordance with their terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally or by general equitable principles.
Section 7.4 NO CONFLICTS OR CONSENTS.
(a) Neither the execution, delivery or performance of this
Agreement by UNIFAB or Sub nor the consummation of the transactions
contemplated hereby will violate, conflict with, or result in a breach of
any provision of, constitute a default (or an event that, with notice or
lapse of time or both, would constitute a default) under, result in the
termination of, or accelerate the performance required by, or result in the
creation of any adverse claim against any of the properties or assets of
any member of the UNIFAB Affiliated Group under, (i) the articles of
incorporation, by-laws, articles of organization, operating agreements or
other organizational documents of any member of the UNIFAB Affiliated
Group, (ii) any note, bond, mortgage, indenture, deed of trust, lease,
license, agreement or other instrument or obligation to which any member of
the UNIFAB Affiliated Group is a party, or by which any member of the
UNIFAB Affiliated Group or any of its assets are bound, or (iii) any
Applicable Law to which any member of the UNIFAB Affiliated Group is
subject or by which any member of the UNIFAB Affiliated Group or any of the
assets of the foregoing are bound that would, individually or in the
aggregate, have a Material Adverse Effect.
(b) No consent or approval of any Governmental Entity is
required by or with respect to UNIFAB or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by UNIFAB or
is necessary for the consummation of the Merger and the other transactions
contemplated by this Agreement, except for: (i) the filing and recordation
requirements of the LBCL with respect to the Certificate of Merger and the
filing of appropriate documents with the relevant authorities of other
states in which UNIFAB or any of its Subsidiaries is qualified to do
business and (ii) such other consents, orders, authorizations,
registrations, declarations and filings, the failure of which to obtain or
make would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on UNIFAB or would not materially impair the
ability of UNIFAB to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
Section 7.5 SEC DOCUMENTS; FINANCIAL STATEMENTS; LIABILITIES.
(a) UNIFAB has filed all required reports, schedules, forms,
statements and other documents with the SEC since September 18, 1997. As
of their respective dates, the UNIFAB Disclosure Documents, and any such
reports, forms and documents filed by UNIFAB with the SEC after the date
hereof, complied, or will comply, in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable
to such UNIFAB Disclosure Documents, and, except to the extent that
information contained in any UNIFAB Disclosure Document has been revised or
superseded by a later filed UNIFAB Disclosure Document, none of such
Documents contains any untrue statement of a material fact 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 misleading.
(b) The UNIFAB Financial Statements included in the UNIFAB
Disclosure Documents have been audited by the certified public accountants
identified therein in accordance with generally accepted auditing
standards, have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods, and
present fairly the financial position of UNIFAB at such dates and the
results of operations and cash flow for the periods then ended, except, in
the case of the UNIFAB Interim Financial Statements, as permitted by Rule
10-01 of Regulation S-X of the SEC. Except as and to the extent set forth
on the Latest UNIFAB Balance Sheet, including all notes thereto, UNIFAB
does not have any material liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise) that would be required to be
reflected on, or reserved against in, a balance sheet of UNIFAB or in the
notes thereto, prepared in accordance with generally accepted accounting
principles consistently applied, except liabilities arising since the date
of the UNIFAB Latest Balance Sheet and as permitted by this Agreement and
that are not material individually or in the aggregate.
(c) The UNIFAB Latest Balance Sheet includes appropriate
reserves for all Taxes and other liabilities incurred as of such date but
not yet payable.
(d) Since the date of the UNIFAB Latest Balance Sheet, there has
been no change that has had or is likely to have a Material Adverse Effect
on UNIFAB.
Section 7.6 LEGALITY OF UNIFAB COMMON STOCK. The UNIFAB Common Stock
to be issued in connection with the Merger and the Asset Purchase, when
issued and delivered in accordance with the terms hereof, will be duly
authorized, validly issued, fully paid and non-assessable.
Section 7.7 BROKER'S AND FINDER'S FEE. No agent, broker, Person or
firm acting on behalf of UNIFAB is or will be entitled to any commission or
broker's or finder's fee from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
Section 7.8 DISCLOSURE. To UNIFAB's knowledge, no representations or
warranties by UNIFAB in this Agreement and no statement contained in any
document (including, without limitation, the financial statements,
certificates, or other writings) furnished or to be furnished by UNIFAB to
OBI or Southern Rentals or any of their respective representatives pursuant
to the provisions hereof or in connection with the transactions
contemplated hereby contains or will contain any untrue statement of
material fact or omits or will omit to state any material fact necessary,
in light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.
ARTICLE 8. PRE-CLOSING COVENANTS
Section 8.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE. During the
period from the date of this Agreement through the Closing Date, each of
OBI (and, with respect to OBI, the OBI Shareholders), Southern Rentals
(and, with respect to Southern Rentals, the Southern Rentals Members), and
UNIFAB shall use its best efforts to preserve the possession and control of
all of its respective assets other than those assets consumed or disposed
of for value in the ordinary course of business or pursuant to the terms of
this Agreement, to maintain satisfactory relationships with its suppliers,
customers, lenders, lessors, agents and other business relationships, to
take all other actions reasonably necessary to preserve the good will of
its business, and to do nothing knowingly to impair its ability to keep and
preserve its business as it exists on the date of this Agreement. Without
the prior written consent of the other party, neither OBI, the OBI
Shareholders, Southern Rentals, and the Southern Rentals Members, on the
one hand, nor UNIFAB, on the other hand, shall commit or suffer to occur
any act or omission that (i) would be inconsistent with the terms of this
Agreement, (ii) would cause a breach of any agreement, commitment or
covenant of such party contained in this Agreement in any material respect
or (iii) would cause its representations and warranties contained in
Articles 5, 6, and 7, respectively, to become untrue in any material
respect. Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Closing Date each of OBI,
Southern Rentals, and UNIFAB shall conduct its business only in the
ordinary course as presently conducted and consistent with past practices
and shall continue to use its best efforts to develop business for the
UNIFAB International West, L.L.C. facility in Lake Charles, Louisiana,
under the terms of a certain joint venture letter among such parties.
During the period from the date of this Agreement through the Closing Date,
(i) neither OBI nor Southern Rentals shall make any loan, advance or other
distribution to OBI Shareholders or Southern Rentals Members unless agreed
to in writing by UNIFAB and (ii) neither OBI nor Southern Rentals will
issue or sell or commit itself to issue or sell any additional shares of
OBI Common Stock or Southern Rentals Membership Interests, respectively, or
any securities convertible into or exchangeable for such securities.
Section 8.2 NO SOLICITATIONS.
(a) Neither OBI, Southern Rentals, any OBI Shareholder, nor any
Southern Rentals Member will directly or indirectly, either individually or
through any officer, director, manager, employee, representative, agent or
Affiliate, (i) initiate, solicit, encourage or otherwise facilitate the
initiation or submission of any inquiries, proposals or offers that
constitute or may reasonably be expected to lead to an Acquisition Proposal
(as defined below), (ii) enter into or maintain or continue discussions or
negotiate with any Person in furtherance of such inquiries or to obtain an
Acquisition Proposal or (iii) agree to, approve, recommend, or endorse any
Acquisition Proposal.
(b) For purposes of this Agreement, "Acquisition Proposal" means
an inquiry, offer or proposal regarding any of the following (other than
the transactions contemplated by this Agreement) involving OBI or Southern
Rentals: (i) any merger, reorganization, consolidation, share exchange,
recapitalization, business combination, asset purchase, liquidation,
dissolution, or other similar transaction involving, or any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of, all or any
significant portion of the assets or 10% or more of the equity securities
of OBI or Southern Rentals in a single transaction or series of related
transactions that could reasonably be expected to interfere with the
completion of the Merger or the Asset Purchase; (ii) any tender offer or
exchange offer for 20% or more of the outstanding shares of capital stock
of OBI or Southern Rentals; or (iii) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage in
any of the foregoing.
(c) Each of OBI, Southern Rentals, the OBI Shareholders, and the
Southern Rentals Members will promptly notify UNIFAB after receipt of any
Acquisition proposal or any request for nonpublic information relating to
OBI or Southern Rentals or any of their respective Subsidiaries in
connection with an Acquisition Proposal or for access to any of the
premises, books or records of OBI or Southern Rentals or any of their
respective Subsidiaries by any person or entity that informs OBI or
Southern Rentals or their respective board of directors or managers,
formally or informally, that it is considering making, or has made, an
Acquisition Proposal. Such notice to UNIFAB will be made orally and in
writing and will indicate in reasonable detail the identity of the offering
party and the terms and conditions of such proposal, inquiry or contact;
except such disclosure will be made to UNIFAB only to the extent such
disclosure does not violate the fiduciary responsibilities of the board of
directors or managers of OBI or Southern Rentals, as the case may be, after
being advised by its legal counsel, in which case OBI or Southern Rentals
will provide UNIFAB with a summary of the terms and conditions of such
proposal, inquiry or contact.
Section 8.3 PUBLIC STATEMENTS; CONFIDENTIALITY.
(a) The Entities, on the one hand, and UNIFAB, on the other
hand, will consult with each other before issuing, and provide each other
the opportunity to review and comment upon, any press releases or other
public statements with respect to any transactions described in this
Agreement, including the Merger and the Asset Purchase, and will not issue
any such press releases or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or
by obligations pursuant to a listing agreement with NASDAQ.
(b) Until the Closing Date and subsequent to any termination of
this Agreement pursuant to Section 13.1, neither UNIFAB nor either of the
Entities will use (except in evaluating the transactions contemplated by
this Agreement) and each of UNIFAB and the Entities will keep confidential
and will not disclose to any third party any information obtained by it
from the other party or its representatives in connection with this
Agreement except (i) that information may be disclosed by each party to its
advisors in connection with the negotiation of and the performance of the
transactions contemplated by this Agreement or (ii) to the extent that such
information is or becomes generally available to the public through no act
or omission of such party.
Section 8.4 ACCESS TO PROPERTIES AND RECORDS; ENVIRONMENTAL DUE
DILIGENCE.
(a) Until the Closing Date, each of the Entities shall allow
UNIFAB and its authorized representatives full access, during normal
business hours and on reasonable notice, to all of the properties, offices,
equipment, inventory and other assets, documents, files, books and records
of the Entities to permit UNIFAB a full opportunity to make such
investigation and inspection as it desires of the businesses and assets of
the Entities. The Entities, the OBI Shareholders and the Southern Rentals
Members will make full disclosure of all material facts affecting the
businesses of the Entities and will use their best efforts to cause the
employees, counsel and independent public accountants of each of the
Entities to be available upon reasonable notice to answer questions of
UNIFAB's representatives concerning the businesses and affairs of the
Entities and shall further use their best efforts and 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 each of the Entities.
(b) During the period from the date of this Agreement through
and including the Closing Date, UNIFAB will have the right at its sole
cost, risk and expense to make, or cause to be made, an environmental
assessment of the operations and physical premises of the Entities. To the
extent the obligations hereunder would not require the interruption of
existing services or materially interfere with customer relationships, the
Entities will fully cooperate in affording access to their physical
premises to permit UNIFAB or its agents to ascertain the general
environmental condition of such physical premises and operations.
Section 8.5 CONSULTATION AND REPORTING. During the period from the
date of this Agreement to the Closing Date, each of OBI, Southern Rentals
and UNIFAB will confer on a regular and frequent basis with each other to
report material operational matters and to report on the general status of
ongoing operations. Each of OBI, Southern Rentals and UNIFAB will notify
each other promptly of any unexpected emergency or other change in the
normal course of its business or in the operation of its properties and of
any governmental complaints, investigations, adjudicatory proceedings, or
hearings (or communications indicating that the same may be contemplated)
and will keep the other fully informed of such events and permit its
representatives prompt access to all materials prepared by or on behalf of
such party or served on them, in connection therewith.
Section 8.6 NOTIFICATION OF CHANGES.
(a) Each of the Entities, the OBI Shareholders and the Southern
Rentals Members will promptly notify UNIFAB of any event that causes any
representation or warranty given by the Entities, the OBI Shareholders or
the Southern Rentals Members in Articles 5 or 6 to become untrue. UNIFAB
will promptly notify each of the Entities, the OBI Shareholders, and the
Southern Rentals Members of any event that causes any representation or
warranty given by UNIFAB and Sub in Article 7 to become untrue.
(b) The Entities, the OBI Shareholders, the Southern Rentals
Members and UNIFAB will each have the right until the Closing to supplement
or amend any of the Schedules described in Articles 5, 6, or 7 with respect
to any matter arising or discovered after the date of this Agreement that,
if existing or known on the date of this Agreement, would have been
required to be set forth or described in such Schedules. For all purposes
of this Agreement, including for purposes of determining whether the
conditions set forth in Article 10 have been fulfilled, the Schedules will
be deemed to include only that information contained therein on the date of
this Agreement and will be deemed to exclude all information contained in
any supplement or amendment thereto, except to the extent that they reflect
an event or condition that would be beneficial to the other party;
provided, however, that if the Closing occurs, then all matters disclosed
pursuant to any such supplement or amendment will be deemed included in the
Schedules at Closing (without necessity of a written waiver or other action
on the part of any party) and to modify the applicable representations and
warranties for all purposes.
Section 8.7 SUB SHAREHOLDER APPROVAL. UNIFAB, as the sole shareholder
of Sub, will take all action necessary to effect approval by Sub of this
Agreement.
Section 8.8 BONUSES. Bonuses paid to OBI employees with respect to
the calendar year 1998 shall not exceed those set forth in SCHEDULE 8.8.
ARTICLE 9. POST-CLOSING COVENANTS
TAX-FREE REORGANIZATION. UNIFAB and the OBI Shareholders are entering
into this Agreement with the intention that the Merger qualify as a tax-
free reorganization for federal income tax purposes and neither the OBI
Shareholders nor UNIFAB will take any actions that disqualify the Merger
for such treatment.
ARTICLE 10. CLOSING CONDITIONS
Section 10.1 CONDITIONS APPLICABLE TO ALL PARTIES. The obligations of
each of the parties hereto to effect the Merger, the Asset Purchase and the
other transactions contemplated by this Agreement are subject to the
satisfaction or waiver of the following conditions at or prior to the
Closing:
(a) NO RESTRAINING ACTION. No action, suit, or proceeding
before any court or governmental or regulatory authority will be pending,
no investigation by any governmental or regulatory authority will have been
commenced, and no action, suit or proceeding by any governmental or
regulatory authority will have been threatened, against OBI, any OBI
Shareholder, Southern Rentals, any Southern Rentals Member, UNIFAB or any
of the principals, officers, managers or directors of OBI, Southern Rentals
or UNIFAB seeking to restrain, prevent or change the transactions
contemplated hereby or questioning the legality or validity of any such
transactions or seeking damages in connection with any such transactions.
(b) STATUTORY REQUIREMENTS AND REGULATORY APPROVAL. All
statutory requirements under Section 112 or the LBCL and Section 1358-1360
of the LLCL for valid consummation of the Merger will have been fulfilled
and all appropriate orders, consents and approvals from all regulatory
agencies and other governmental authorities whose order, consent or
approval is required by law for the consummation of the Merger and the
Asset Purchase will have been received.
Section 10.2 CONDITIONS TO UNIFAB'S OBLIGATIONS. The obligations of
UNIFAB to effect the Merger, the Asset Purchase and the other transactions
contemplated by this Agreement are also subject to the satisfaction or
waiver of the following conditions at or prior to the Closing:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) All
representations and warranties of OBI, Southern Rentals, the OBI
Shareholders and the Southern Rentals Members in this Agreement or in any
certificate or document delivered to UNIFAB pursuant hereto (without regard
to any Schedule updates furnished by OBI, Southern Rentals, the OBI
Shareholders or the Southern Rentals Members after the date hereof, as
contemplated by Section 8.6(b)), if made on and as of the Closing Date,
would then be true and correct in all material respects, (ii) UNIFAB and
Sub shall have received a certificate of the president of OBI, the
president of Southern Rentals, each OBI Shareholder and each Southern
Rentals Member that all representations and warranties of such persons,
respectively, in this Agreement, in any certificate or document delivered
to UNIFAB or Sub pursuant hereto, as supplemented by any Schedule updates
furnished after the date hereof, as contemplated by Section 8.6(b), if made
on and as of the Closing Date, would then be true and correct in all
material respects, and (iii) OBI, Southern Rentals, the OBI Shareholders
and the Southern Rentals Members will have performed and complied in all
material respects with all agreements, covenants, and conditions required
by this Agreement to be performed or complied with by them, respectively,
prior to or on the Closing Date.
(b) NO MATERIAL ADVERSE CHANGE. UNIFAB will have completed its
due diligence review of the assets and operations of the Entities to its
satisfaction and there will not have occurred any event or circumstance
resulting in a Material Adverse Effect from the dates of the OBI Latest
Balance Sheet and the Southern Rentals Latest Balance Sheet to the Closing
Date in the financial condition or prospects, results of operations,
properties or businesses of either of the Entities.
(c) CONSENTS AND APPROVALS. All governmental and other third-
party consents and approvals, if any, necessary to permit the consummation
of the transactions contemplated by this Agreement, or to permit the
continued operation of the businesses of OBI and the Assets of Southern
Rentals in substantially the same manner after the Closing Date as before,
shall have been received.
(d) DEBT LIMITATION. OBI's aggregate indebtedness shall not
exceed $ 2 million, except as consented to in writing by UNIFAB, which
consent will not be unreasonably withheld.
(e) NO TAXABLE GAIN. UNIFAB shall be reasonably satisfied that
no taxable gain will be recognized by UNIFAB, Sub or OBI as a result of the
Merger under any applicable Tax law or regulation.
(f) EMPLOYMENT AND NONCOMPETITION AGREEMENTS. UNIFAB shall have
received an employment agreement, substantially in the form attached hereto
as EXHIBIT 10.2(F)(1), from ▇▇▇▇, an employment agreement,
substantially in the form attached hereto as EXHIBIT 10.2(F)(2), from
▇▇▇▇▇▇, an employment agreement, substantially in the form attached hereto
as EXHIBIT 10.2(F)(3), from ▇.▇. ▇▇▇▇▇▇, and an employment agreement,
substantially in the form attached hereto as EXHIBIT 10.2(F)(4), from
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and UNIFAB shall have received noncompetition,
nonsolicitation, invention and secrecy agreements, substantially in the
form attached hereto as EXHIBIT 10.2(F)(5), from Poch, Patout, ▇.▇.
▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
(g) OPINION OF COUNSEL. UNIFAB shall have received from
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to OBI, Southern
Rentals, the OBI Shareholders and the Southern Rentals Members, an opinion,
dated as of the Closing Date, to the effect set forth in EXHIBIT 10.2(G).
(h) OFFICER'S CERTIFICATES. UNIFAB shall have received (i) a
certificate of the secretary of OBI dated as of the Closing Date as to the
incumbency of all the OBI officers and true and correct copies of the
articles of incorporation and by-laws of OBI and the resolutions of the
board of directors and shareholders of OBI authorizing the execution and
delivery by OBI of this Agreement and the other documents contemplated
hereby and the consummation of the transactions contemplated herein and in
such documents and (ii) a certificate of a manager of Southern Rentals
dated as of the Closing Date as to the incumbency of all the Southern
Rentals managers and true and correct copies of the articles of
organization and operating agreement of Southern Rentals and the
resolutions of the managers and members of Southern Rentals authorizing the
execution and delivery by Southern Rentals of this Agreement and the other
documents contemplated hereby and the consummation of the transactions
contemplated herein and in such documents.
(i) NO OBLIGATIONS TO BROKERS AND FINDERS. UNIFAB, OBI,
Southern Rentals, and ▇▇▇▇▇▇▇ & Company International will have entered
into a letter agreement in the form set forth in EXHIBIT 10.2(I).
(j) EQUIPMENT STORAGE. UNIFAB and ▇▇▇▇ will have entered
into a lease agreement in the form set forth in EXHIBIT 10.2(J).
(k) PATENT APPLICATIONS. OBI and ▇.▇. ▇▇▇▇▇▇ will have entered
into an assignment of patent application in the form set forth in EXHIBIT
10.2(K)(1), OBI, ▇.▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇")
will have entered into an assignment of patent application in the form set
forth in EXHIBIT 10.2(K)(2), and OBI, Patout, and Schellstede will have
entered into an assignment of patent application in the form set forth in
EXHIBIT 10.2(K)(3).
Section 10.3 CONDITIONS TO THE OBLIGATIONS OF OBI, SOUTHERN RENTALS,
THE OBI SHAREHOLDERS AND THE SOUTHERN RENTALS MEMBERS. The obligations of
OBI, Southern Rentals, the OBI Shareholders and the Southern Rentals
Members to effect the Merger, the Asset Purchase and the other transactions
contemplated by this Agreement are also subject to the satisfaction or
waiver of the following conditions at or prior to the Closing:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) The
representations and warranties of UNIFAB and Sub in this Agreement or in
any certificate or document delivered to OBI, Southern Rentals, the OBI
Shareholders or Southern Rentals Members, pursuant hereto (without regard
to any Schedule updates furnished by UNIFAB or Sub after the date hereof,
as contemplated by Section 8.6(b)), if made on and as of the Closing Date,
would then be true and correct in all material respects, (ii) OBI, Southern
Rentals, the OBI Shareholders, and the Southern Rentals Members shall have
received a certificate of the president of UNIFAB and an officer of Sub
that all representations and warranties of such entities in this Agreement,
in any certificate or document delivered to OBI, Southern Rentals, the OBI
Shareholders, and the Southern Rentals Members pursuant hereto, as
supplemented by any Schedule updates furnished after the date hereof, as
contemplated by Section 8.6(b), if made on and as of the Closing Date,
would then be true and correct in all material respects, and (iii) UNIFAB
and Sub shall have performed and complied in all material respects with all
agreements, covenants, and conditions required by this Agreement to be
performed or complied with by them prior to or on the Closing Date.
(b) NO MATERIAL ADVERSE CHANGE. There shall not have occurred
any event or circumstance resulting in a Material Adverse Effect from the
date of the UNIFAB Latest Balance Sheet to the Closing Date in the
financial conditions or prospects, results of operations or business of
UNIFAB.
(c) CONSENTS AND APPROVALS. All governmental and other third-
party consents and approvals, if any, necessary to permit the consummation
of the transactions contemplated by this Agreement shall have been
received.
(d) OPINION OF COUNSEL. OBI, Southern Rentals, the OBI
Shareholders and the Southern Rentals Members shall have received from
Jones, Walker, Waechter, Poitevent, Carrre & ▇▇▇▇▇▇, L.L.P.,
counsel for UNIFAB, an opinion, dated as of the Closing Date, to the
effect set forth in EXHIBIT 10.3(D).
(e) NO TAXABLE GAIN. The OBI Shareholders shall be reasonably
satisfied that they will not recognize any taxable gain as a result and
upon the occurrence of the Merger under any applicable Tax law or
regulation.
(f) OFFICER'S CERTIFICATE. OBI, Southern Rentals, the OBI
Shareholders and the Southern Rentals Members shall have received a
certificate of the secretary of UNIFAB dated as of the Closing Date as to
true and correct copies of the resolutions of the board of directors of
UNIFAB authorizing the execution and delivery by UNIFAB of this Agreement
and the other documents contemplated hereby and the consummation of the
transactions contemplated herein and in such documents.
(g) PAYMENT OF FEE. OBI shall have paid a fee of not more than
$250,000 to ▇▇▇▇▇▇▇ & Company International for all services rendered by
▇▇▇▇▇▇▇ & Company International pursuant to the ▇▇▇▇▇▇▇ Agreement.
Section 10.4 WAIVER OF CONDITIONS. Any condition to a party's
obligation to effect the Merger or the Asset Purchase hereunder may be
waived by that party.
ARTICLE 11. SURVIVAL OF REPRESENTATIONS; INDEMNITY
Section 11.1 POST-CLOSING REMEDIES. After the Effective Time, in the
absence of fraud, the provisions of this Article 11 will constitute the
exclusive remedies of the parties for any breach of or non-compliance with
any of the representations, warranties or agreements set forth in Articles
5, 6, or 7 or any certificate delivered pursuant to Section 10.2 or Section
10.3 of this Agreement.
Section 11.2 INDEMNIFICATION BY OBI SHAREHOLDERS.
(a) The OBI Shareholders agree, jointly, severally and with the
intention of being bound IN SOLIDO, to indemnify, defend, protect and hold
harmless UNIFAB and the Surviving Entity from and against all claims,
damages, actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including but not limited to reasonable attorneys' fees
and expenses of investigation) (collectively, "Damages") incurred by either
or both of UNIFAB or the Surviving Entity as a result of or incident to any
breach or non-fulfillment of any representation, warranty or agreement made
by OBI or the OBI Shareholders in Articles 5 or 6 or any certificate
delivered by OBI or the OBI Shareholders pursuant to Section 10.2 hereof;
provided, however, that in the absence of fraud and except as provided in
Section 11.2(b), the recourse of UNIFAB and the Surviving Entity against
the OBI Shareholders for such Damages shall be limited to recourse against
the Merger Escrow Shares in accordance with the procedures set forth in
Section 11.7 and the liability of any OBI Shareholder for such Damages
shall be limited to the Indemnity Value of the Merger Escrow Shares
attributable to such OBI Shareholder.
(b) Notwithstanding the proviso to Section 11.2(a), the limit
of the liability of any OBI Shareholder to UNIFAB and the Surviving Entity
for Damages caused by the breach or non-fulfillment of any representation,
warranty or agreement made by OBI or the OBI Shareholders in Section 5.3
(CAPITALIZATION), Section 5.15 (TAX MATTERS), Section 5.16 (LITIGATION) and
Section 6.1 (OWNERSHIP AND TRANSFER OF SHARES) shall be, in the aggregate,
the Indemnity Value of all of the shares of UNIFAB Common Stock
constituting the Merger Consideration and the Asset Purchase Consideration
attributable to such OBI Shareholder and such liability shall terminate on
the third anniversary of the Closing Date, except as to Indemnity Claims
made on or prior to such third anniversary; provided, however, that each
OBI Shareholder's obligations with respect to any breach or non-fulfillment
of a representation, warranty or agreement made by him in Section 6.1 will
not be limited as to amount and will continue until the expiration of the
applicable prescriptive period.
Section 11.3 INDEMNIFICATION BY SOUTHERN RENTALS AND SOUTHERN RENTALS
MEMBERS.
(a) Southern Rentals and the Southern Rentals Members agree,
jointly, severally and with the intention of being bound IN SOLIDO, to
indemnify, defend, protect and hold harmless UNIFAB and the Surviving
Entity from and against all Damages incurred by either or both of UNIFAB or
the Surviving Entity as a result of or incident to any breach or non-
fulfillment of any representation, warranty or agreement made by Southern
Rentals or the Southern Rentals Members in Articles 5 or 6 or any
certificate delivered by Southern Rentals or the Southern Rentals Members
pursuant to Section 10.2 hereof; provided, however, that in the absence of
fraud and except as provided in Section 11.3(b), the recourse of UNIFAB and
the Surviving Entity against Southern Rentals for such Damages shall be
limited to recourse against the Asset Purchase Escrow Shares in accordance
with the procedures set forth in Section 11.8 and the liability of any
Southern Rentals Member for such Damages shall be limited to the Indemnity
Value of the Asset Purchase Escrow Shares attributable to such Southern
Rentals Member.
(b) Notwithstanding the proviso to Section 11.3(a), (i) the
limit of the liability of Southern Rentals to UNIFAB and the Surviving
Entity for Damages caused by the breach or non-fulfillment of any
representation, warranty or agreement made by Southern Rentals in Section
5.10(b), not including the first sentence thereof, shall be, in the
aggregate, the Indemnity Value of all of the shares of UNIFAB Common Stock
constituting the Merger Consideration and the Asset Purchase Consideration,
(ii) the liability of any Southern Rentals Member to UNIFAB or the
Surviving Entity for such Damages shall not exceed, in the aggregate, the
Indemnity Value of all of the shares of UNIFAB Common Stock constituting
the Merger Consideration and the Asset Purchase Consideration attributable
to such Southern Rentals Member and (iii) such liability of Southern
Rentals and the Southern Rentals Members shall continue until the
expiration of the applicable prescriptive period.
Section 11.4 INDEMNIFICATION BY UNIFAB TO OBI SHAREHOLDERS. UNIFAB
covenants and agrees that it will indemnify, defend, protect and hold
harmless each OBI Shareholder from and against all Damages incurred by such
OBI Shareholder as a result of or incident to any breach or non-fulfillment
of any representation, warranty or agreement of UNIFAB or Sub to the OBI
Shareholders set forth in Article 7 or in any certificate delivered to the
OBI Shareholders pursuant to Section 10.3; provided, however, that in the
absence of fraud (i) UNIFAB will not have liability to any OBI Shareholder
under this Section 11.4 for Damages that in the aggregate exceed the
Indemnity Value of the Merger Closing Shares and the Merger Escrow Shares
of such OBI Shareholder and (ii) no Indemnity Claim may be made by such OBI
Shareholder after the third anniversary of the Closing Date.
Section 11.5 INDEMNIFICATION BY UNIFAB TO SOUTHERN RENTALS AND SOUTHERN
RENTALS MEMBERS. UNIFAB covenants and agrees that it will indemnify,
defend, protect and hold harmless Southern Rentals, each Southern Rentals
Member and the Southern Rentals Beneficial Owners from and against the
Assumed Liability and all Damages incurred by Southern Rentals or any such
Southern Rentals Member or the Southern Rentals Beneficial Owners as a
result of or incident to any breach or non-fulfillment of any
representation, warranty or agreement of UNIFAB or Sub to Southern Rentals
and the Southern Rentals Members set forth in Article 7 or in any
certificate delivered to Southern Rentals and the Southern Rentals Members
pursuant to Section 10.3; provided, however, that, in the absence of fraud,
(i) UNIFAB will not have any liability to Southern Rentals under this
Section 11.5 for Damages that in the aggregate exceed the Indemnity Value
of the Asset Purchase Closing Shares and the Asset Purchase Escrow Shares,
(ii) UNIFAB will not have any liability to a Southern Rentals Member under
this Section 11.5 for Damages that in the aggregate exceed the Indemnity
Value of the Asset Purchase Closing Shares and the Asset Purchase Escrow
Shares attributable to such Southern Rentals Member and (iii) no Indemnity
Claim may be made by Southern Rentals or any Southern Rentals Member after
the third anniversary of the Closing Date.
Section 11.6 INDEMNITY PROCEDURES.
(a) Any party claiming indemnity for Damages under this Article
11 (the "Indemnified Party") will give prompt notice to the party by whom
such indemnity is owed (the "Indemnifying Party") of the occurrence of any
such Damages and of the nature and amount thereof (the "Indemnity Claim");
provided, however, that no party may claim indemnity for damages under this
Article 11 unless an Indemnity Claim (or two or more Indemnity Claims in
the aggregate) exceeds $10,000. The Indemnifying Party will respond in
writing to such notice within ten Business Days from the date that such
notice of an Indemnity Claim is received to either (i) accept the Indemnity
Claim as subject to the indemnities provided hereunder, or (ii) challenge
the Indemnity Claim on the basis of either (A) the merits or (B) the amount
of the Indemnity Claim. If the Indemnifying Party fails to respond within
ten Business Days of receipt of the notice provided for herein, such
failure to respond will be deemed acceptance under clause (i) of the
immediately preceding sentence. Any Indemnity Claim so accepted by UNIFAB
will be promptly paid in cash, subject to the applicable limitations set
forth in Sections 11.4 and 11.5. Any Indemnity Claim so accepted by or on
behalf of one or more of the OBI Shareholders will be paid as provided in
Section 11.7 subject to the applicable limitations set forth in Section
11.2. Any Indemnity Claim so accepted by or on behalf of Southern Rentals
or one or more of the Southern Rentals Members will be paid as provided in
Section 11.8 subject to the applicable limitations set forth in Section
11.3.
(b) If the Indemnifying Party challenges the Indemnity Claim
under Section 11.6(a) above, the parties will attempt to resolve the
challenge through negotiation in good faith. If the matter is not resolved
within ten Business Days after notice of the Indemnifying Party's challenge
is received by the Indemnified Party, either party may submit such matter
to a single arbitrator. The arbitrator will be selected by the joint
agreement of the parties, but if they do not agree within 20 calendar days
of the lapse of the ten-Business Day period referred to above, the
selection will be made in accordance with the Commercial Arbitration Rules
of the American Arbitration Association (the "Rules"). If no such
arbitrator is appointed within 45 calendar days of any such request to such
association, either party may apply to a court having jurisdiction to make
such appointment. The arbitrator will conduct the arbitration in the
Parish of Iberia, State of Louisiana, in accordance with the Rules and will
make a final determination, to be provided in writing to each party, that
resolves the dispute. The prevailing party will be entitled to recover
from the other party the fees of the arbitrator and the administrative
costs of the arbitration. The arbitrator will apply the statutory and
decisional law of the State of Louisiana in substantially the same manner
as do the courts of the State of Louisiana in the case of contracts made
and wholly performed within that jurisdiction. All results of the
arbitration proceeding will be final, conclusive and binding on all parties
to this Agreement, and judgment upon the arbitrator's award may be entered
in any court of the State of Louisiana having competent jurisdiction,
unless such results or award are clearly erroneous on the record before the
arbitrator. In the event of an arbitration award in favor of the
Indemnified Party, if the Indemnifying Party is: (i) UNIFAB, such
arbitration award will be paid in cash, subject to the applicable
limitations in Sections 11.4 and 11.5; (ii) one or more of the OBI
Shareholders, such arbitration award will be paid as provided in Section
11.7; or (iii) Southern Rentals or one or more of the Southern Rentals
Members, such arbitration award will be paid as provided in Section 11.8.
Section 11.7 OBI ESCROW PROCEDURES.
(a) After the Effective Time and the surrender by OBI
Shareholders of the certificates representing their shares of OBI Common
Stock pursuant to the provisions of Sections 2.3 and 2.4, UNIFAB will
retain the Merger Escrow Shares in escrow to secure the indemnification
provided under Section 11.2 above. Subject to the extensions provided in
this Section 11.7, all of the Merger Escrow Shares of an OBI Shareholder
placed in escrow will remain in escrow until the expiration of six months
after the Closing Date (the "Partial Escrow Termination Date") and one-half
of the Merger Escrow Shares of an OBI Shareholder placed in escrow will
remain in escrow until the expiration of eighteen months after the Closing
Date (the "Final Escrow Termination Date"). The term "OBI Extended Partial
Escrow Termination Date" refers to the date upon which an Indemnity Claim
that is not resolved as of the Partial Escrow Termination Date, of which
the OBI Shareholder Representative or UNIFAB, as the case may be, receives
notice on or before the Partial Escrow Termination Date, is either (i)
resolved pursuant to Section 11.6(a) hereof or (ii) the subject of an
arbitration award pursuant to Section 11.6(b) hereof. The term "OBI
Extended Final Escrow Termination Date" refers to the date upon which an
Indemnity Claim that is not resolved as of the Final Escrow Termination
Date, of which the OBI Shareholder Representative or UNIFAB, as the case
may be, receives notice on or before the Final Escrow Termination Date, is
either (i) resolved pursuant to Section 11.6(a) hereof or (ii) the subject
of an arbitration award pursuant to Section 11.6(b) hereof.
(b) In all matters pertaining to the indemnification provisions
of this Agreement applicable to the OBI Shareholders and the disposition of
the Merger Escrow Shares in connection therewith, each OBI Shareholder
hereby appoints and names ▇▇▇▇▇▇ (or such other Person as will hereafter be
appointed in writing by the OBI Shareholders holding a majority of the
outstanding shares of OBI Common Stock immediately before the Effective
Time and as will consent in writing to such appointment), as his authorized
representative (the "OBI Shareholder Representative"), and vests the OBI
Shareholder Representative with full power and authority to give and
receive notices and otherwise act on his behalf with regard to all matters
arising under this Article 11.
(c) In the event of an Indemnity Claim under Section 11.2 that
is either (i) accepted by the OBI Shareholder Representative or (ii) the
subject of an arbitration award pursuant to Section 11.6(b) in favor of
UNIFAB or the Surviving Entity, UNIFAB will cause the cancellation of the
number of Merger Escrow Shares having Indemnity Value equal to the lesser
of (x) the amount of the Indemnity Claim or (y) the aggregate Indemnity
Value of the Merger Escrow Shares. In the event Merger Escrow Shares are
canceled in accordance with this Section 11.7(c), such Merger Escrow Shares
will be canceled pro rata among the OBI Shareholders.
(d) On the Partial Escrow Termination Date, UNIFAB will (i)
cancel the number of Merger Escrow Shares, if any, necessary to satisfy
Indemnity Claims pursuant to Section 11.7(c) hereof and (ii) distribute the
number of Merger Escrow Shares not canceled that are entitled to be
released on the Partial Escrow Termination Date under Section 11.7(a) to
each of the OBI Shareholders in the name of whom such Merger Escrow Shares
are issued. Notwithstanding the provisions of the first sentence of this
clause (d), however, in the event an Indemnity Claim is received by UNIFAB
or the OBI Shareholder Representative, as the case may be, on or before the
Partial Escrow Termination Date and at the Partial Escrow Termination Date
is not either (A) satisfied in accordance with Section 11.7(c) hereof or
(B) the subject of an arbitration award sustaining a challenge by the OBI
Shareholder Representative, UNIFAB will retain in safekeeping from the
Merger Escrow Shares that are not canceled in accordance with the first
sentence of this clause (d) until the OBI Extended Partial Escrow
Termination Date a number of the Merger Escrow Shares that are scheduled to
be released on the Partial Escrow Termination Date under Section 11.7(a)
that will, in its discretion, be sufficient to satisfy the pending
Indemnity Claim in the event it is satisfied pursuant to Section 11.7(c)
hereof and distribute the balance of the Merger Escrow Shares that are
scheduled to be released on the Partial Escrow Termination Date under
Section 11.7(a) to the OBI Shareholders. At the OBI Extended Partial
Escrow Termination Date, UNIFAB will (x) cancel the number of retained
Merger Escrow Shares, if any, necessary to satisfy the pending Indemnity
Claim pursuant to Section 11.7(c) and (y) deliver the remaining retained
Merger Escrow Shares that are scheduled to be released on the Partial
Escrow Termination Date under Section 11.7(a) to the OBI Shareholders.
(e) On the Final Escrow Termination Date, UNIFAB will (i) cancel
the number of Merger Escrow Shares, if any, necessary to satisfy Indemnity
Claims pursuant to Section 11.7(c) hereof and (ii) distribute the Merger
Escrow Shares not canceled to each of the OBI Shareholders in the name of
whom such Merger Escrow Shares are issued. Notwithstanding the provisions
of the first sentence of this clause (e), however, in the event an
Indemnity Claim is received by UNIFAB on the OBI Shareholder
Representative, as the case may be, on or before the Final Escrow
Termination Date and at the Final Escrow Termination Date is not either (A)
satisfied in accordance with Section 11.7(c) hereof or (B) the subject of
an arbitration award sustaining a challenge by the OBI Shareholder
Representative, UNIFAB will retain in safekeeping from the Merger Escrow
Shares that are not canceled in accordance with the first sentence of this
clause (e) until the OBI Extended Final Escrow Termination Date a number of
Merger Escrow Shares that will, in its discretion, be sufficient to satisfy
the pending Indemnity Claim in the event it is satisfied pursuant to
Section 11.7(c) hereof and distribute the balance of the Merger Escrow
Shares to the OBI Shareholders. At the OBI Extended Final Escrow
Termination Date UNIFAB will (x) cancel the number of retained Merger
Escrow Shares, if any, necessary to satisfy the pending Indemnity Claim
pursuant to Section 11.7(c) and (y) deliver the remaining retained Merger
Escrow Shares to the OBI Shareholders.
(f) Each OBI Shareholder will deliver to UNIFAB as soon as
practicable after the Closing, with respect to the Merger Escrow Shares, an
executed stock power naming UNIFAB attorney-in-fact for such OBI
Shareholder for the transfer of the Merger Escrow Shares.
Section 11.8 SOUTHERN RENTALS ESCROW PROCEDURES.
(a) After the Closing Date and the surrender by Southern Rentals
or its designee or designees of the certificates representing its or its
designee's or designees' shares of UNIFAB Common Stock pursuant to the
provisions of Section 3.4, UNIFAB will retain the Asset Purchase Escrow
Shares in escrow to secure the indemnification provided under Section 11.3.
Subject to the extensions provided in this Section 11.8, all of the Asset
Purchase Escrow Shares will remain in escrow until the Partial Escrow
Termination Date and one-half of the Asset Purchase Escrow Shares will
remain in escrow until the Final Escrow Termination Date. The term
"Southern Rentals Extended Partial Escrow Termination Date" refers to the
date upon which an Indemnity Claim that is not resolved as of the Partial
Escrow Termination Date, of which the Southern Rentals Representative or
UNIFAB, as the case may be, receives notice on or before the Partial Escrow
Termination Date, is either (i) resolved pursuant to Section 11.6(a) hereof
or (ii) the subject of an arbitration award pursuant to Section 11.6(b)
hereof. The term "Southern Rentals Extended Final Escrow Termination Date"
refers to the date upon which an Indemnity Claim that is not resolved as of
the Final Escrow Termination Date, of which the Southern Rentals
Representative or UNIFAB, as the case may be, receives notice on or before
the Final Escrow Termination Date, is either (i) resolved pursuant to
Section 11.6(a) hereof or (ii) the subject of an arbitration award pursuant
to Section 11.6(b) hereof.
(b) In all matters pertaining to the indemnification provisions
of this Agreement applicable to Southern Rentals and to the Southern
Rentals Members and the disposition of the Asset Purchase Escrow Shares in
connection therewith, Southern Rentals and each Southern Rentals Member
hereby appoints and names ▇▇▇▇ (or such other Person as will hereafter
be appointed in writing by Southern Rentals and the Southern Rentals
Members immediately before the Closing Date and as will consent in writing
to such appointment), as their authorized representative (the "Southern
Rentals Representative"), and vest the Southern Rentals Representative with
full power and authority to give and receive notices and otherwise act on
their behalf with regard to all matters arising under this Article 11.
(c) In the event of an Indemnity Claim under Section 11.3 that
is either (i) accepted by the Southern Rentals Representative or (ii) the
subject of an arbitration award pursuant to Section 11.6(b) in favor of
UNIFAB or the Surviving Entity, UNIFAB will cause the cancellation of the
number of Asset Purchase Escrow Shares having Indemnity Value equal to the
lesser of the amount of the Indemnity Claim or the aggregate Indemnity
Value of the Asset Purchase Escrow Shares.
(d) On the Partial Escrow Termination Date, UNIFAB will cancel
the number of Asset Purchase Escrow Shares, if any, necessary to satisfy
Indemnity Claims pursuant to Section 11.8(c) hereof and distribute the
Asset Purchase Escrow Shares not canceled that are scheduled to be released
on the Partial Escrow Termination Date under Section 11.8(a) to Southern
Rentals or to such of the Southern Rentals Members and Southern Rentals
Beneficial Owners as it shall designate. Notwithstanding the provisions of
the first sentence of this clause (d), however, in the event an Indemnity
Claim is received by UNIFAB or the Southern Rentals Representative, as the
case may be, on or before the Partial Escrow Termination Date and at the
Partial Escrow Termination Date is not either (A) satisfied in accordance
with Section 11.8(c) hereof or (B) the subject of an arbitration award
sustaining a challenge by the Southern Rentals Shareholder Representative,
UNIFAB will retain in safekeeping from the Asset Purchase Escrow Shares
that are not canceled in accordance with the first sentence of this clause
(d) until the Southern Rentals Extended Partial Escrow Termination Date a
number of the Asset Purchase Escrow Shares that will, in its discretion, be
sufficient to satisfy the pending Indemnity Claim in the event it is
satisfied pursuant to Section 11.8(c) hereof and distribute the balance of
the Asset Purchase Escrow Shares that are scheduled to be released on the
Partial Escrow Termination Date under Section 11.8(a) to Southern Rentals
or to such of the Southern Rentals Members and Southern Rentals Owners as
it shall designate. At the Southern Rentals Extended Partial Escrow
Termination Date, UNIFAB will (x) cancel the number of retained Asset
Purchase Escrow Shares, if any, necessary to satisfy the pending Indemnity
Claims pursuant to Section 11.8(c) and (y) deliver the remaining retained
Asset Purchase Escrow Shares that are scheduled to be released on the
Partial Escrow Termination Date under Section 11.8(a) to Southern Rentals
or to such of the Southern Rentals Members and Southern Rentals Beneficial
Owners as it shall designate.
(e) On the Final Escrow Termination Date, UNIFAB will cancel the
number of Asset Purchase Escrow Shares, if any, necessary to satisfy
Indemnity Claims pursuant to Section 11.8(c) hereof and distribute the
Asset Purchase Escrow Shares not canceled to Southern Rentals or to such of
the Southern Rentals Members and Southern Rentals Beneficial Owners as it
shall designate. Notwithstanding the provisions of the first sentence of
this clause (e), however, in the event an Indemnity Claim is received by
UNIFAB or the Southern Rentals Representative, as the case may be, on or
before the Final Escrow Termination Date and at the Final Escrow
Termination Date is not either (A) satisfied in accordance with Section
11.8(c) hereof or (B) the subject of an arbitration award sustaining a
challenge by the Southern Rentals Representative, UNIFAB will retain in
safekeeping from the Asset Purchase Escrow Shares that are not canceled in
accordance with the first sentence of this clause (e) until the Southern
Rentals Extended Final Escrow Termination Date a number of the Asset
Purchase Escrow Shares, that will, in its discretion, be sufficient to
satisfy the pending Indemnity Claim in the event it is satisfied pursuant
to Section 11.8(c) hereof and distribute the balance of the Asset Purchase
Escrow Shares to Southern Rentals or to such of the Southern Rentals
Members and Southern Rentals Beneficial Owners as it shall designate. At
the Southern Rentals Extended Final Escrow Termination Date, UNIFAB will
(x) cancel the number of retained Asset Purchase Escrow Shares, if any,
necessary to satisfy the pending Indemnity Claims pursuant to Section
11.8(c) and (y) deliver the remaining retained Asset Purchase Escrow Shares
to Southern Rentals or to such of the Southern Rentals Members and Southern
Rentals Beneficial Owners as it shall designate.
(f) Southern Rentals or its designee or designees will deliver
to UNIFAB as soon as practicable after the Closing, with respect to the
Asset Purchase Escrow Shares, one or more executed stock powers naming
UNIFAB attorney-in-fact for Southern Rentals for the transfer of the Asset
Purchase Escrow Shares.
ARTICLE 12. TERMINATION
Section 12.1 TERMINATION. This Agreement may be terminated and the
Merger and the Asset Purchase contemplated herein abandoned at any time
before the Effective Time, whether before or after approval by the
shareholders of the Entities or UNIFAB, as follows:
(a) MUTUAL CONSENT. By the mutual consent of the Entities and
UNIFAB.
(b) MATERIAL BREACH. By the respective boards of directors of
both of the Entities, on the one hand, or UNIFAB, on the other hand, if
there has been a material breach by the other of any representation or
warranty contained in this Agreement or of any covenant contained in this
Agreement, which in either case cannot be, or has not been, cured within 15
days after written notice of such breach is given to the party committing
such breach, provided that the right to effect such cure will not extend
beyond the date set forth in subparagraph (c) below.
(c) ABANDONMENT. By the respective boards of directors of both
of the Entities, on the one hand, or UNIFAB, on the other hand, if (i) all
conditions to Closing required by Article 10 hereof have not been met by or
waived by ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) any such condition cannot be met by such
date and has not been waived by each party in whose favor such condition
inures, or (iii) the Merger or the Asset Purchase has not occurred by such
date; provided, however, that neither the Entities, on the one hand, nor
UNIFAB, on the other hand, will be entitled to terminate this Agreement
pursuant to this subparagraph (c) if such parties or party is in material
violation of any of their or its representations, warranties or covenants
in this Agreement.
(d) GOVERNMENT ACTION. If any governmental authority will have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Merger or the Asset
Purchase and such order, decree, ruling or other action will have become
final and nonappealable.
(e) ENVIRONMENTAL REVIEW. UNIFAB may terminate this Agreement
at any time prior to five Business Days before the Closing Date if it is
not satisfied with the results of its environmental due diligence of OBI
and Southern Rentals.
Section 12.2 EFFECT OF TERMINATION. Upon termination of this Agreement
pursuant to this Article 12, this Agreement will be void and of no effect,
and will result in no obligation of or liability to any party or their
respective directors, officers, employees, agents, members or shareholders,
unless such termination was the result of an intentional breach of any
representation, warranty or covenant in this Agreement in which case the
party who breached the representation, warranty or covenant will be liable
to the other party for damages, and all costs and expenses incurred in
connection with the preparation, negotiation, execution and performance of
this Agreement.
ARTICLE 13. MISCELLANEOUS
Section 13.1 NOTICES. All notices hereunder must be in writing and
will be deemed to have been duly given upon receipt of hand delivery;
certified or registered mail, return receipt requested; or telecopy
transmission with confirmation of receipt:
(a) If to UNIFAB:
UNIFAB International, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
(b) If to OBI, Southern Rentals, the OBI Shareholders, or the
Southern Rentals Members:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Such names and addresses may be changed by written notice to each person
listed above.
Section 13.2 GOVERNING LAW. This Agreement will be governed by,
construed and interpreted in accordance with the laws of the State of
Louisiana, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
Section 13.3 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
Section 13.4 INTERPRETATION; SCHEDULES.
(a) When a reference is made in this Agreement to an Article,
Section, Exhibit or Schedule, such reference will be to an Article or
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and will not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they will be deemed
to be followed by the words "without limitation."
(b) The information set forth in the Schedules to this Agreement
is qualified in its entirety by reference to the specific provisions of
this Agreement, and is not intended to constitute, and will not be
construed as constituting, separate representations or warranties of the
party to which such Schedules relate except as and to the extent provided
in this Agreement. Inclusion of information in the Schedules will not be
construed as an admission that such information is material for purposes of
the specific provisions of this Agreement to which such information
relates. Information included in the Schedules that is not required to be
so included under the specific provisions of this Agreement will be deemed
to be included for informational purposes only and information of a similar
nature need not be included, at the discretion of the party providing such
information.
Section 13.5 ENTIRE AGREEMENT; SEVERABILITY.
(a) This Agreement, including the Exhibits and Schedules hereto
and the documents 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 (whether written or oral) among the parties with respect to
such subject matter.
(b) If any provision of this Agreement is determined to be
invalid or unenforceable, in whole or in part, it is the parties' intention
that such determination will not affect the validity or enforceability of
any other provision of this Agreement, which provisions will otherwise
remain in full force and effect.
Section 13.6 AMENDMENT AND MODIFICATION. This Agreement may be amended
or modified only by written agreement of the parties hereto.
Section 13.7 EXTENSION; WAIVER. At any time prior to the Effective
Time of the Merger, the parties may (a) extend the time for the performance
of any of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c)
waive compliance with any of the agreements or conditions contained in this
Agreement except for Sections 10.1(a) or 10.1(b). The failure of a party
to insist upon strict adherence to any term of this Agreement on any
occasion will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term
of this Agreement. No waiver of any breach of this Agreement will be held
to constitute a waiver of any other or subsequent breach. Any waiver must
be in writing.
Section 13.8 BINDING EFFECT; BENEFITS. This Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto and their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 13.9 ASSIGNABILITY. This Agreement is not assignable by any
party hereto without the prior written consent of the other parties.
Section 13.10 EXPENSES. Each of the parties hereto will pay all of its
own expenses relating to the transactions contemplated by this Agreement,
including without limitation the fees and expenses of its own financial,
legal, accounting and tax advisors.
Section 13.11 GENDER AND CERTAIN DEFINITIONS. All words used herein,
regardless of the number and gender specifically used, will be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context requires.
Section 13.12 GUARANTEES OF THE SOUTHERN RENTALS BENEFICIAL OWNERS.
Each Southern Rentals Beneficial Owner agrees to use his best efforts to
cause Southern Rentals to carry out all the covenants, agreements,
representations, and warranties of Southern Rentals set forth in this
Agreement, and each Southern Rentals Beneficial Owner hereby irrevocably
and unconditionally guarantees, jointly, severally, and with the intention
of being bound IN SOLIDO, the full and prompt performance of all the
obligations of the Southern Rentals Members under Article 11 hereof.
Section 13.13 ACCEPTANCE BY OBI SHAREHOLDER REPRESENTATIVE. ▇▇▇▇▇▇
hereby consents to and accepts his appointment as the OBI Shareholder
Representative pursuant to Section 11.7(b) hereof.
Section 13.14 ACCEPTANCE BY SOUTHERN RENTALS REPRESENTATIVE. ▇▇▇▇▇
hereby consents to and accepts his appointment as the Southern Rentals
Representative pursuant to Section 11.8(b) hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
UNIFAB INTERNATIONAL, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
OBI ACQUISITION, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
OIL BARGES, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SOUTHERN RENTALS, L.L.C.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Manager
/S/ ▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, BY ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
AGENT
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
COVE EQUIPMENT, INC.
By: /S/ ▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇, President
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
TRUSTEE OF THE SKW TRUST