1
EXECUTION COPY
--------------------------------------------------------------------------------
PLAN AND AGREEMENT OF MERGER
OF
ITEQ, INC.
ITEQ SUB CORP.
AND
MATRIX SERVICE COMPANY
---------------
DATED DECEMBER 16, 1997
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
ARTICLE I
MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1. Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3. Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4. Name and Continued Corporate Existence of Surviving Corporation . . . . . . . . . . . . . . . . . . . 3
1.4.1. Name and Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4.2. Federal Income Tax Treatment of Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5. Governing Law and Certificate of Incorporation of Surviving Corporation . . . . . . . . . . . . . . . 3
1.5.1. Delaware Law Governs and Subcorp Certificate of Incorporation,
as Amended and Restated, Survives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6. Bylaws of Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6.1. Subcorp Bylaws Survive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7. Directors and Officers of Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7.1. Directors of Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7.2. Officers of Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7.3. Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.8. Capital Stock of Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.8.1. Capital Stock of Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9. Conversion of Securities upon Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9.1. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9.2. Conversion of Matrix Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.9.3. Matrix Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.9.4. Exchange of Matrix Common Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . 6
1.9.5. ITEQ Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.9.6. Matrix Transfer Books Closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.9.7. Subcorp's Capital Stock Unaffected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.9.8. Treatment of Matrix Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.9.9. Allocation of Merger Consideration; Election Procedures . . . . . . . . . . . . . . . . . . . 7
1.9.9.1. Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.9.9.2. Procedure for Elections . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.9.9.3. Revocation of Election; Return of Certificates . . . . . . . . . . . . . . . 8
1.9.9.4. Allocation- General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.9.9.5. Allocation of Merger Consideration Where Stock
Elections Within the Range of Minimum and Maximum
Stock Election Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.9.9.6. Proration of Cash Election Shares . . . . . . . . . . . . . . . . . . . . 10
1.9.9.7. Proration of Stock Election Shares . . . . . . . . . . . . . . . . . . . . 11
1.9.9.8. Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.10. Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
i
3
1.10.1. Assets and Liabilities of Merging Corporations Become Those of
Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.10.2. Conveyances to Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10.3. Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10.4. Unclaimed Merger Consideration; No Escheat. . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10.5. Dissenting Stockholders of Matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF MATRIX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1. Representations and Warranties of Matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1.1. Organization and Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1.2. Agreement Authorized and its Effect on Other Obligations. . . . . . . . . . . . . . . . . . 13
2.1.3. Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1.4. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1.5. Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1.6. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1.7. Additional Matrix Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.7.1. Employee Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.7.2. Certain Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.7.3. Employee Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.7.4. Guaranties, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.7.5. Environment/Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.8. No Undisclosed Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.9. Absence of Certain Changes and Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.9.1. Financial Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.9.2. Property Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.9.3. Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.9.4. Capitalization Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.9.5. Labor Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.9.6. Other Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.11. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.12. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.13. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.14. Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.14.1. Environmental Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.14.2. Permits, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.14.3. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.14.4. Environmental Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.14.5. Renewals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.14.6. PCBs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.15. Compliance with Other Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ii
4
2.1.16. Finder's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.17. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.18. Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1.19. Product Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1.20. Information for Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1.21. Investment Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ITEQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.1. Representations and Warranties of ITEQ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.1.1. Organization and Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.1.2. Agreement Authorized and its Effect on Other Obligations. . . . . . . . . . . . . . . . . . 21
3.1.3. Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.1.4. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1.5. Reports and Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1.6. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1.7. No Undisclosed Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.8. Absence of Certain Changes and Events in ITEQ. . . . . . . . . . . . . . . . . . . . . . . 23
3.1.8.1. Financial Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.8.2. Property Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.8.3. Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.8.4. Capitalization Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.8.5. Labor Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.8.6. Other Material Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.10. Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.1.11. Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.1.12. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1.13. Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1.13.1. Environmental Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1.13.2. Permits, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1.13.3. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1.13.4. Environmental Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1.13.5. Renewals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1.13.6. PCB's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1.14. Compliance with Other Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1.15. Finder's Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1.16. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1.17. Investigations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1.18. Product Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1.19. Information for Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1.20. Investment Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1.21. Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
iii
5
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.1. Agreements of ITEQ and Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.1.1. Maintenance of Present Business and Employees. . . . . . . . . . . . . . . . . . . . . . . 28
4.1.2. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.1.3. Maintenance of Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.1.4. Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.1.5. Compliance with Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.1.6. Inspection of Each Merging Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2. Additional Agreements of ITEQ and Matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2.1. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2.2. Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2.3. Notice of Material Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3. Additional Agreements of Matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.1. Prohibition of Certain Compensatory Arrangements . . . . . . . . . . . . . . . . . . . . . 30
4.3.2. Prohibition of Certain Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.3. Prohibition of Certain Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.4. Disposal of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.5. Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.6. Matrix Acquisition Proposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.3.6.1. No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.3.6.2. Acceptance of Superior Matrix Transaction Proposals . . . . . . . . . . . . . . . 32
4.3.7. No Amendment to Certificate of Incorporation, etc. . . . . . . . . . . . . . . . . . . . . 33
4.3.8. No Issuance, Sale, or Purchase of Securities. . . . . . . . . . . . . . . . . . . . . . . . 33
4.3.9. Prohibition on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3.10. Supplemental Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3.11. Notice of Material Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.3.12. Stockholders' Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.4. Additional Agreements of ITEQ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.4.1. Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.4.2. No Amendment to Certificate of Incorporation, etc. . . . . . . . . . . . . . . . . . . . . 34
4.4.3. No Issuance, Sale, or Purchase of Securities. . . . . . . . . . . . . . . . . . . . . . . . 34
4.4.4. Prohibition on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.4.5. Issuance of ITEQ Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.4.6. Listing of ITEQ Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.4.7. Notice of Material Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.4.8. Consent of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.4.9. Supplemental Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.4.10. Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
iv
6
5.1. Conditions Precedent to Obligations of Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.1.1. Representations and Warranties of ITEQ True at Effective Date. . . . . . . . . . . . . . . 36
5.1.2. No Material Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.1.3. Opinion of ITEQ Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.1.4. Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1.6. Registration; Listing of ITEQ Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1.7. Consent of Certain Parties in Privity With ITEQ. . . . . . . . . . . . . . . . . . . . . . 37
5.1.8. Matrix Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1.9. Ancillary Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.1.10 Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.2. Conditions Precedent to Obligations of ITEQ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.2.1. Representations and Warranties of Matrix True at Effective Date. . . . . . . . . . . . . . 38
5.2.2. No Material Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2.3. Opinion of Matrix's Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2.4. Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2.6. Consent of Certain Parties in Privity with Matrix. . . . . . . . . . . . . . . . . . . . . 39
5.2.7. Consulting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.2.8. Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.2.9. Ancillary Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
TERMINATION AND ABANDONMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.1. By Mutual Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.2. By ITEQ or Matrix Because of Dissenting Stockholders. . . . . . . . . . . . . . . . . . . . 40
6.1.3. By ITEQ Because of Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.4. By ITEQ Because of Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.5. By Matrix Because of Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . 41
6.1.6. By Matrix Due to a Superior Matrix Transaction Proposal. . . . . . . . . . . . . . . . . . 41
6.1.7. By Matrix Because of Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . 41
6.1.8. By ITEQ or Matrix Because of Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 41
6.1.9. By ITEQ or Matrix if Merger not Effective by April 30, 1998. . . . . . . . . . . . . . . . . 41
6.2. Termination by Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3. Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.4. Waiver of Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII
ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.1. Exchange of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2.1. Indemnification by ITEQ as to Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . 42
v
7
7.2.2. Indemnification of Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2.3. Indemnification Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.2.4. Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.3. Undertaking to File Reports and Cooperate in Rule 144 Transactions . . . . . . . . . . . . . . . . . 43
7.4. Additional ITEQ Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.1. Entirety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.2. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.3. Notices and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.4. Termination of Representations, Warranties, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.5. Table of Contents and Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.6. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.7. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.8. Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.9. Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.10. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
APPENDICES
Restated Certificate of Incorporation of Matrix (with Amendments) . . . . . . . . . . . . . . . . . . . App. I
Affiliate Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . App. II
vi
8
PLAN AND AGREEMENT OF MERGER
PLAN AND AGREEMENT OF MERGER, dated December 16, 1997, by and among
ITEQ, Inc., a Delaware corporation ("ITEQ"), ITEQ Sub Corp., a Delaware
corporation and a wholly owned subsidiary of ITEQ formed for the purpose of
carrying out the transactions contemplated hereby ("Subcorp" or the "Surviving
Corporation") and Matrix Service Company, a Delaware corporation ("Matrix").
Subcorp and Matrix are hereinafter collectively referred to as the "Merging
Corporations."
W I T N E S S E T H:
WHEREAS, ITEQ is a corporation duly organized and validly existing
under the laws of the State of Delaware, with its registered office at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and its principal executive office at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇;
WHEREAS, the authorized capital stock of ITEQ consists of 1,000,000
shares of preferred stock, par value $.01 per share, of which at November 30,
1997, no shares were issued or outstanding; and 40,000,000 shares of common
stock, par value $.001 per share ("ITEQ Common Stock"), of which at November
30, 1997, 26,827,345 shares were issued and outstanding, and an additional
3,164,956 shares were reserved for issuance in conjunction with various benefit
plans and upon exercise of outstanding warrants; at the same date, 791 shares
of Common Stock were held in ITEQ's treasury;*
WHEREAS, Subcorp is a corporation duly organized and validly existing
under the laws of the State of Delaware, with its registered office at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
WHEREAS, the authorized capital stock of Subcorp consists of 1,000
shares of common stock, par value $1 per share ("Subcorp Common Stock"), of
which at the date hereof 1,000 shares were issued and outstanding;
WHEREAS, Matrix is a corporation duly organized and validly existing
under the laws of the State of Delaware, with its registered office at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and its principal executive office at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
WHEREAS, the authorized capital stock of Matrix consists of 5,000,000
shares of preferred stock, par value $.01 per share, of which at November 30,
1997, no shares were issued or outstanding; and 15,000,000 shares of common
stock, par value $.01 per share (the "Matrix Common Stock"), of which at
November 30, 1997, 9,414,739 shares were issued and outstanding,
-----------------------------------
* All ITEQ share information contained in this Agreement as of any date
prior to October 28, 1997, gives proforma effect to the merger on October 28,
1997, of Astrotech International Corporation with and into ITEQ and related
charter amendment.
9
and an additional 1,612,591 shares were reserved for issuance in conjunction
with various employee benefit plans; at the same date, 76,414 shares were held
in the Matrix treasury; and
WHEREAS, the respective boards of directors of ITEQ, Subcorp and
Matrix deem it desirable and in the best interests of their respective
corporations and their respective stockholders that Matrix be merged into
Subcorp, pursuant to the provisions of Section 251 of the General Corporation
Law of the State of Delaware ("DGCL"), in exchange for the consideration herein
provided for, and have proposed, declared advisable, and approved such merger
pursuant to this Plan and Agreement of Merger (the "Agreement"), which
Agreement has been duly approved by resolutions of the respective boards of
directors of ITEQ, Subcorp and Matrix;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, and in order to set forth the terms
and conditions of the merger, the mode of carrying the same into effect, the
manner and basis of converting (i) the outstanding shares of Matrix Common
Stock into shares of ITEQ Common Stock, and (ii) the outstanding options to
purchase shares of Matrix Common Stock into options to purchase shares of ITEQ
Common Stock and such other details and provisions as are deemed necessary or
proper, the parties hereto agree as follows:
ARTICLE I
MERGER
1.1. Surviving Corporation. Subject to the adoption and approval
of this Agreement by the requisite vote of the stockholders of Matrix and ITEQ
and to the other conditions hereinafter set forth, Subcorp and Matrix shall be,
upon the Effective Date of the merger as defined in Section 1.3 hereof, merged
into a single surviving corporation, which shall be Subcorp, one of the Merging
Corporations, which shall continue its corporate existence and remain a
Delaware corporation governed by and subject to the laws of that state.
1.2. Stockholder Approval. This Agreement shall be submitted for
adoption and approval by the stockholders of each of ITEQ and Matrix (Subcorp's
sole stockholder ITEQ having previously approved the same by consent) in
accordance with their respective certificates of incorporation and the
applicable laws of the State of Delaware, at separate meetings called and held
for such purpose.
1.3. Effective Date. As soon as practicable after satisfaction or,
to the extent permitted hereunder, waiver of all conditions to the merger set
forth herein, Matrix and Subcorp shall file a Certificate of Merger with the
Secretary of State of the State of Delaware and make all other filings or
recordings required by Delaware law in connection with the Merger. The merger
shall become effective at such time (the "Effective Time") as the Certificate
of Merger is duly filed with the Secretary of State of the State of Delaware in
accordance with Section 251(c) of the DGCL (or at such later time as may be
agreed in writing by the parties hereto and specified in the Certificate of
2
10
Merger). The date upon which the merger shall become effective is referred to
in this Agreement as the "Effective Date."
1.4. Name and Continued Corporate Existence of Surviving
Corporation
1.4.1. Name and Existence. On the Effective Date, the
Certificate of Incorporation of Subcorp, the corporation whose
corporate existence is to survive the merger and continue thereafter
as the surviving corporation, shall be amended and restated in its
entirety into the form annexed hereto as Appendix I (the "Restated
Certificate of Incorporation"). In all other respects the identity,
existence, purposes, powers, objects, franchises, rights, and
immunities of Subcorp, the surviving corporation of the merger, shall
continue unaffected and unimpaired by the merger, and the corporate
identity, existence, purposes, powers, objects, franchises, rights,
and immunities of Matrix shall be wholly merged into Subcorp, the
Surviving Corporation, and Subcorp shall be fully vested therewith.
Accordingly, at the Effective Time, the separate existence of Matrix,
except insofar as continued by statute, shall cease.
1.4.2. Federal Income Tax Treatment of Merger. The merger
is intended to qualify as and, subject to the requirements of Sections
368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code of 1986, as
amended (the "Code"), shall be characterized as a tax-free
reorganization described in Sections 368(a)(1)(A) and 368(a)(2)(D) of
the Code.
1.5. Governing Law and Certificate of Incorporation of Surviving
Corporation
1.5.1. Delaware Law Governs and Subcorp Certificate of
Incorporation, as Amended and Restated, Survives. The laws of
Delaware shall continue to govern the Surviving Corporation. On the
Effective Date, the Restated Certificate of Incorporation shall be the
certificate of incorporation of Subcorp until further amended in the
manner provided by law.
1.6. Bylaws of Surviving Corporation
1.6.1. Subcorp Bylaws Survive. Effective as of the
Effective Date, the bylaws of Subcorp shall be the bylaws of the
Surviving Corporation until altered, amended, or repealed, or until
new bylaws shall be adopted in accordance with the provisions of law,
the Restated Certificate of Incorporation and the Bylaws.
1.7. Directors and Officers of Surviving Corporation
1.7.1. Directors of Surviving Corporation. The names and
addresses of the persons who, upon the Effective Date, shall
constitute the board of directors of the Surviving Corporation, and
who shall hold office until the first annual meeting of stockholders
of the Surviving Corporation next following the Effective Date, are as
follows:
3
11
NAME ADDRESS
---- -------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
1.7.2. Officers of Surviving Corporation. The names and
titles of the persons who, upon the Effective Date, shall constitute
the officers of the Surviving Corporation, and who shall hold their
respective offices of the Surviving Corporation, subject to the
Bylaws, from and after the Effective Date, are as follows:
NAME TITLE
---- -----
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ President
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Chief Operating Officer
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chief Financial Officer, Vice
President and Secretary
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Assistant Secretary
1.7.3. Vacancies. On or after the Effective Date, if a
vacancy shall exist for any reason in the board of directors or in any
of the offices of the Surviving Corporation, such vacancy shall be
filled in the manner provided in the Restated Certificate of
Incorporation and/or Bylaws of the Surviving Corporation.
1.8. Capital Stock of Surviving Corporation
1.8.1. Capital Stock of Surviving Corporation. The
authorized number of shares of capital stock of the Surviving
Corporation, and the par value, designations, preferences, rights, and
limitations thereof, and the express terms thereof, shall be as set
forth in the Restated Certificate of Incorporation.
1.9. Conversion of Securities upon Merger
1.9.1. General. The manner and basis of converting (i) the
issued and outstanding shares of the capital stock of Matrix into
shares of the capital stock of ITEQ and (ii) the
4
12
outstanding rights to purchase shares of capital stock of Matrix into
rights to purchase shares of stock of capital stock of ITEQ, shall be
as hereinafter set forth in this Section 1.9.
1.9.2. Conversion of Matrix Common Stock. At the Effective
Time, each share of Matrix Common Stock then issued and outstanding
shall be converted into the right to receive (i) certificates
evidencing .8333 fully paid and nonassessable share of issued and
outstanding ITEQ Common Stock (the "Stock Consideration") or (ii)
$10.00 in cash (the "Cash Consideration"), in each case as the holder
thereof shall have elected or be deemed to have elected in accordance
with Paragraph 1.9.9 hereof (collectively, the "Merger
Consideration") upon surrender, in accordance with Paragraph 1.9.4
hereof, of certificates theretofore evidencing shares of Matrix Common
Stock.
On the Effective Date, each share of Matrix Common Stock that
is held by Matrix as treasury stock and any shares of Matrix Common
Stock owned by ITEQ, Subcorp or any other wholly owned subsidiary of
ITEQ or Matrix shall be canceled and retired and shall cease to exist
and no stock of ITEQ or other consideration shall be delivered or
deliverable in exchange therefor.
1.9.3. Matrix Dissenting Shares. Anything else in this
Agreement to the contrary notwithstanding, no share of Matrix Common
Stock, the holder of which shall not have voted shares in favor of the
merger contemplated hereby and shall have properly complied with the
provisions of Section 262 of the DGCL as to appraisal rights (a
"Matrix Dissenting Share"), shall be deemed converted into and to
represent the right to receive Merger Consideration hereunder; and the
holders of Matrix Dissenting Shares, if any, shall be entitled to
payment, solely from the Surviving Corporation, of the appraised value
of such Matrix Dissenting Shares to the extent permitted by and in
accordance with the provisions of Section 262 of the DGCL; provided,
however, that (i) if any holder of Matrix Dissenting Shares shall,
under the circumstances permitted by the DGCL, subsequently deliver a
written withdrawal of his or her demand for appraisal of such Matrix
Dissenting Shares, (ii) if any holder fails to establish his or her
entitlement to rights to payment as provided in such Section 262 or
(iii) if neither any holder of Matrix Dissenting Shares nor the
Surviving Corporation has filed a petition demanding a determination
of the value of all Matrix Dissenting Shares within the time provided
in such Section 262, such holder or holders (as the case may be) shall
forfeit such right to payment for such Matrix Dissenting Shares
pursuant to such Section 262 and each such Matrix Dissenting Share
shall thereupon be treated as a Non-Election Share for purposes of
Subparagraph 1.9.9.4. Matrix shall give ITEQ (i) prompt notice of any
written demands for appraisal of any Matrix Common Stock, attempted
withdrawals of such demands and any other instruments received by
Matrix relating to stockholders' rights of appraisal and (ii) the
opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL. Matrix shall not, except with
the prior written consent of ITEQ, voluntarily make any payment with
respect to any demands for appraisals of Matrix Common Stock, offer to
settle or settle any such demands or approve any withdrawal of any
such demands.
5
13
1.9.4. Exchange of Matrix Common Stock Certificates. As of
or promptly after the Effective Date, ITEQ shall deposit the aggregate
Merger Consideration with the Exchange Agent for the benefit of the
holders of shares of Matrix Common Stock, for exchange in accordance
with this Paragraph 1.9.4. Commencing on the Effective Date, each
holder of an outstanding certificate or certificates theretofore
representing shares of Matrix Common Stock may surrender the same to
▇▇▇▇▇▇ Trust, as exchange agent ("Exchange Agent"), and such holder
shall be entitled upon such surrender to receive in exchange therefor
the Merger Consideration into which the shares of Matrix Common Stock
theretofore represented by the certificate or certificates so
surrendered shall have been converted as aforesaid. From and after
the Effective Time, all shares of Matrix Common Stock shall no longer
be outstanding and shall automatically be deemed to have been canceled
and retired and shall cease to exist, and each holder of a certificate
theretofore representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the Stock
Consideration or the Cash Consideration, as the case may be, and cash
in lieu of fractional shares of ITEQ Common Stock as contemplated by
Paragraph 1.9.5, such consideration to be issued or paid upon the
surrender of such certificate in accordance with this Paragraph 1.9.4,
without interest.
1.9.5. ITEQ Fractional Shares. Anything else in this
Agreement to the contrary notwithstanding, no certificates for
fractional share interests of ITEQ Common Stock will be issued, but,
in lieu thereof, ITEQ will settle all such fractional share interests
in cash on the basis of the closing price for ITEQ Common Stock on the
Nasdaq National Market (as reported in The Wall Street Journal) on the
last trading day before the Effective Date.
1.9.6. Matrix Transfer Books Closed. Upon the Effective
Date, the stock transfer books of Matrix shall be deemed closed, and
no transfer of any certificates theretofore representing shares of
Matrix shall thereafter be made or consummated.
1.9.7. Subcorp's Capital Stock Unaffected. At the Effective
Time the shares of common stock, par value $1 per share, of Subcorp
theretofore authorized shall remain unchanged and shall be deemed to
be shares of common stock, par value $1 per share, of the Surviving
Corporation. Accordingly, each of the shares of common stock of
Subcorp issued and outstanding on the Effective Date shall, at and
after the Effective Time, continue to be and remain issued and
outstanding shares of the common stock of the Surviving Corporation,
fully paid and nonassessable, without any action on the part of the
holder of any shares of such stock. Each certificate of Subcorp
evidencing ownership of any of such shares of common stock shall
continue to evidence ownership of the same number of shares of the
common stock of the Surviving Corporation.
1.9.8. Treatment of Matrix Stock Options. ITEQ agrees to
assume, effective as of the Effective Time, each of the then
outstanding options to purchase Matrix Common Stock, whether vested or
unvested (collectively, the "Matrix Options") (which includes all
outstanding options granted under Matrix's stock option plans (the
"Matrix Options Plans"))
6
14
and to substitute shares of ITEQ Common Stock under such assumed
option. At the Effective Time, each of the then outstanding Matrix
Options will without any further action on the part of any holder
thereof be exchanged for an option to purchase that number of shares
of ITEQ Common Stock determined by multiplying the number of shares of
Matrix Common Stock subject to such Matrix Option at the Effective
Date by .8333, at an exercise price per share of ITEQ Common Stock
equal to the exercise price per share of such Matrix Option divided by
.8333. If the foregoing calculation results in an exchanged Matrix
Option being exercisable for a fraction of a share of ITEQ Common
Stock, then the number of shares of ITEQ Common stock subject to such
option will be rounded down to the nearest whole number of shares, and
the total exercise price for the option will be reduced by the
exercise price of the fractional share. The term, exerciseability,
vesting schedule, and all other terms and conditions of the Matrix
Options will otherwise be unchanged by the provisions of this
Paragraph 1.9.8 and shall operate in accordance with their terms
except as otherwise agreed by the parties in writing. ITEQ shall
reserve a number of shares of ITEQ Common Stock sufficient to cover
all shares issuable upon the exercise of the Matrix Options assumed.
All shares of ITEQ Common Stock issued upon exercise of the exchanged
Matrix Options shall be registered under an effective Form S-8
Registration Statement (or other comparable form) filed with the
Securities and Exchange Commission (the "Commission") promptly after
the Effective Date, and ITEQ shall use its reasonable efforts to
maintain the effectiveness of such registration statement for so long
as any of the assumed Matrix Options remain outstanding. On the
Effective Date, ITEQ shall deliver to the holders of Matrix Options
appropriate agreements, in form and substance satisfactory to Matrix,
evidencing the assumption by ITEQ of the Matrix Options.
1.9.9. Allocation of Merger Consideration; Election
Procedures.
1.9.9.1. Election. Subject to allocation and
proration in accordance with all the provisions of this
Paragraph 1.9.9, each record holder of shares of Matrix Common
Stock (other than Matrix Dissenting Shares, if any, which are
not to be treated as Non-Election Shares (as defined below)
pursuant to Paragraph 1.9.3 and shares to be canceled in
accordance with Paragraph 1.9.2) issued and outstanding
immediately prior to the Election Deadline (as defined in
Subparagraph 1.9.9.2) shall be entitled to elect to receive in
respect of each such share (i) the Cash Consideration (a "Cash
Election") or (ii) the Stock Consideration (a "Stock
Election") or to indicate that such record holder has no
preference as to the receipt of the Cash Consideration or the
Stock Consideration for such shares (a "Non-Election").
Shares of Matrix Common Stock in respect of which a
Non-Election is made (including shares in respect of which
such an election is deemed to have been made pursuant to this
Paragraph 1.9.9 and Paragraph 1.9.3) (collectively,
"Non-Election Shares") shall be deemed by ITEQ to be shares in
respect of which Cash Elections or Stock Elections have been
made, as provided for elsewhere in this Paragraph 1.9.9.
7
15
1.9.9.2. Procedure for Elections. Elections
pursuant to Subparagraph 1.9.9.1 shall be made on a form to be
mutually agreed upon by ITEQ and Matrix (a "Form of Election")
to be provided by the Exchange Agent for that purpose to
holders of record of Matrix Common Stock, together with
appropriate transmittal materials, at the time of mailing to
holders of record of Matrix Common Stock of the "Proxy
Statement" (as defined in Paragraph 2.1.20). Elections shall
be made by mailing to the Exchange Agent a duly completed Form
of Election. To be effective, a Form of Election must be (i)
properly completed, signed and submitted to the Exchange Agent
at its designated office by 5:00 p.m., local time, on the
business day immediately prior to the Effective Date (which
date shall be publicly announced by ITEQ as soon as
practicable but in no event less than five business days prior
to the Effective Date) (the "Election Deadline") and (ii)
accompanied by the certificates evidencing the Matrix Common
Stock as to which the election is being made (or by an
appropriate guarantee of delivery of such certificates by a
commercial bank or trust company in the United States or a
member of a registered national security exchange or of the
National Association of Securities Dealers, Inc., provided
such certificates are in fact delivered to the Exchange Agent
within four business days after the date of execution of such
guarantee of delivery). Matrix shall use its best efforts to
make a Form of Election available to all persons who become
holders of record of Matrix Common Stock between the date of
mailing described in the first sentence of this Subparagraph
1.9.9.2 and the Election Deadline. ITEQ shall determine, in
its sole and absolute discretion (which authority it may
delegate in whole or in part to the Exchange Agent) whether
Forms of Election have been properly completed, signed and
submitted or revoked. The decision of ITEQ (or the Exchange
Agent, as the case may be) in such matters shall be conclusive
and binding. Neither ITEQ nor the Exchange Agent will be
under any obligation to notify any person of any defect in a
Form of Election submitted to the Exchange Agent. A holder of
shares of Matrix Common Stock that does not submit an
effective Form of Election prior to the Election Deadline
shall be deemed to have made a Non-Election.
1.9.9.3. Revocation of Election; Return of
Certificates. An election may be revoked, but only by written
notice received by the Exchange Agent prior to the Election
Deadline. Any certificate(s) representing shares of Matrix
Common Stock which have been submitted to the Exchange Agent
in connection with an election shall be returned without
charge to the holder thereof in the event such election is
revoked as aforesaid and such holder requests in writing the
return of such certificate(s). Upon any such revocation,
unless a duly completed Form of Election is thereafter
submitted in accordance with Subparagraph 1.9.9.2, such shares
shall be Non-Election Shares. In the event that this
Agreement is terminated pursuant to the provisions hereof and
any shares of Matrix Common Stock have been transmitted to the
Exchange Agent pursuant to the provisions hereof, such shares
shall promptly be returned without charge to the person
submitting the same.
8
16
1.9.9.4. Allocation- General. Anything else in
this Agreement to the contrary notwithstanding, the number of
shares of Matrix Common Stock to be converted into the right
to receive the Stock Consideration in the merger contemplated
by this Agreement (the "Stock Election Number") shall be fixed
and determined in accordance with the entirety of this
Paragraph 1.9.9 and shall be equal to not less than 50% of the
number of shares of Matrix Common Stock "Outstanding"
immediately prior to the Effective Time (the "Minimum Stock
Election Number") nor more than 70% of the number of shares of
Matrix Common Stock Outstanding immediately prior to the
Effective Time (the "Maximum Stock Election Number"). The
number of shares of Matrix Common Stock to be converted into
the right to receive the Cash Consideration in the merger (the
"Cash Election Number") shall be equal to the number of shares
of Matrix Common Stock Outstanding immediately prior to the
Effective Time less the Stock Election Shares. As used
throughout this Paragraph 1.9.9 with reference to the Matrix
Common Stock, the term "Outstanding" means the number of
shares of Matrix Common Stock which in accordance with the
stock records of Matrix have been issued and which remain
outstanding on the date in question (ignoring for this purpose
any Matrix Common Stock held as treasury shares and canceled
pursuant to Paragraph 1.9.2), less the sum of (A) the number
of Matrix Dissenting Shares, if any, which are not to be
treated as "Non-Election Shares" (as defined in Subparagraph
1.9.9.1) pursuant to Paragraph 1.9.3 determined as of the
Effective Time, (B) the number of shares of Matrix Common
Stock held by ITEQ, Subcorp or any other wholly owned
subsidiary of ITEQ or Matrix to be canceled in accordance with
Paragraph 1.9.2 and (C) the number of shares of Matrix Common
Stock to be exchanged for cash pursuant to Paragraph 1.9.5.
1.9.9.5. Allocation of Merger Consideration Where
Stock Elections Within the Range of Minimum and Maximum Stock
Election Numbers. In the event that the aggregate number of
shares in respect of which Stock Elections are made (the
"Stock Election Shares") shall equal or exceed the Minimum
Stock Election Number but do not exceed the Maximum Stock
Election Number, then all such Stock Election Shares shall be
converted into the right to receive the Stock Consideration,
and all shares in respect of which Cash Elections have been
made (the "Cash Election Shares"), together with all Non-
Election Shares, shall be converted into the right to receive
the Cash Consideration; provided, however, that if for any
reason the fair market value of the Stock Consideration at the
Effective Time would otherwise not constitute at least 40% of
the aggregate fair market value of the Merger Consideration at
the Effective Time (the "Reorganization Threshold"), then all
Non-Election Shares and Cash Election Shares shall be
converted into the right to receive the Stock Consideration or
Cash Consideration in the following manner:
(i) if the Non-Election Shares, when
added to the Stock Election Shares would be less than
the Reorganization Threshold, (A) all Non-
9
17
Election Shares shall be deemed to be Stock Election
Shares and shall be converted into the right to
receive the Stock Consideration, (B) Cash Election
Shares shall be deemed to be Stock Election Shares
(on a pro-rata basis for each record holder of Matrix
Common Stock with respect to those shares, if any, of
such record holder as to which a Cash Election has
been made), so that the number of Cash Election
Shares so deemed to be Stock Election Shares, when
added to the other Stock Election Shares and the
Non-Election Shares, would as nearly as practicable
be equal to (but not less than) the Reorganization
Threshold, and all Cash Election Shares so deemed to
be Stock Election Shares shall be converted into the
right to receive the Stock Consideration, and (C) the
remaining Cash Election Shares shall be converted
into the right to receive the Cash Consideration;
(ii) if the Non-Election Shares, when
added to the Stock Election Shares would be equal to
or greater the Reorganization Threshold, (A)
Non-Election Shares shall be deemed to be Stock
Election Shares (on a pro-rata basis for each record
holder of Non-Election Shares, if the sum of
Non-Election Shares and Stock Election Shares would
exceed the Reorganization Threshold), so that the
number of Non-Election Shares so deemed to be Stock
Election Shares, when added to the other Stock
Election Shares, shall equal as closely as
practicable (but not be less than) the Reorganization
Threshold, and all Non-Election Shares so deemed to
be Stock Election Shares shall be converted into the
right to receive the Stock Consideration and (B) any
remaining Non-Election Shares and all Cash Election
Shares shall be converted into the right to receive
the Cash Consideration.
1.9.9.6. Proration of Cash Election Shares.
In the event that the aggregate number of Cash Election Shares
exceeds 50% of the number of shares of Matrix Common Stock
Outstanding immediately prior to the Effective Time (the
"Maximum Cash Election Number"), all shares of Matrix Common
Stock in respect of which Stock Elections have been made and
all Non-Election Shares shall be converted into the right to
receive the Stock Consideration, and the Cash Election Shares
shall be converted into the right to receive the Stock
Consideration or the Cash Consideration in the following
manner:
(i) Cash Election Shares shall be deemed to
be Stock Election Shares, on a pro-rata basis for
each record holder of Matrix Common Stock with
respect to those shares of Matrix Common Stock of
such record holder which are Cash Election Shares, so
that the number of Cash Election Shares remaining
after deducting the Cash Election Shares so deemed to
be Stock Election Shares would as nearly as
practicable be equal to (but not greater than) the
Maximum Cash Election Number, and all such Cash
Election
10
18
Shares so deemed to be Stock Election Shares shall be
converted into the right to receive the Stock
Consideration; and
(ii) any remaining Cash Election Shares
shall be converted into the right to receive the Cash
Consideration.
1.9.9.7. Proration of Stock Election Shares. In
the event that the aggregate number of Stock Election Shares
exceeds the Maximum Stock Election Number, all Cash Election
Shares and Non- Election Shares shall be converted into the
right to receive the Cash Consideration, and all Stock
Election Shares shall be converted into the right to receive
the Stock Consideration or the Cash Consideration in the
following manner:
(i) Stock Election Shares shall be deemed
to be Cash Election Shares, on a pro rata basis for
each record holder of Matrix Common Stock with
respect to those shares of Matrix Common Stock of
such record holder which are Stock Election Shares,
so that the number of Stock Election Shares so deemed
to be Cash Election Shares when added to all
Non-Election Shares and all other Cash Election
Shares, shall be sufficient to result in the
remaining Stock Election Shares being a number as
nearly as practicable equal to (but not greater than)
the Maximum Stock Election Number, and all Stock
Election Shares so deemed to be Cash Election Shares
shall be converted into the right to receive the Cash
Consideration; and
(ii) the remaining Stock Election Shares
shall be converted into the right to receive the
Stock Consideration.
1.9.9.8. Computations. The Exchange Agent, in
consultation with ITEQ, shall make all computations to give
effect to all provisions of this Paragraph 1.9.9.
1.10. Assets and Liabilities
1.10.1. Assets and Liabilities of Merging Corporations Become
Those of Surviving Corporation. At the Effective Time, all rights,
privileges, powers, immunities, and franchises of each of the Merging
Corporations, both of a public and private nature, and all property,
real, personal, and mixed, and all debts due on whatever account, as
well as stock subscriptions and all other choses or things in action,
and all and every other interest of or belonging to or due to either
of the Merging Corporations, shall be taken up by and deemed to be
transferred to and shall be vested in the Surviving Corporation
without further act or deed, and all such rights, privileges, powers,
immunities, and franchises, property, debts, choses or things in
action, and all and every other interest of each of the Merging
Corporations shall be thereafter as effectually the property of the
Surviving Corporation as they were of the respective Merging
Corporations, and the title to any real or other property,
11
19
or any interest therein, whether vested by deed or otherwise, in
either of the Merging Corporations, shall not revert or be in any way
impaired by reason of the merger, provided, however, that all rights
of creditors and all liens upon any properties of each of the Merging
Corporations shall be preserved unimpaired, and all debts,
liabilities, restrictions, obligations, and duties of the respective
Merging Corporations, including without limitation all obligations,
liabilities and duties as lessee under any existing lease, shall
thenceforth attach to the Surviving Corporation and may be enforced
against and by it to the same extent as if such debts, liabilities,
duties, restrictions and obligations had been incurred or contracted
by it. Any action or proceeding pending by or against either of the
Merging Corporations may be prosecuted to judgment as if the merger
had not taken place, or the Surviving Corporation may be substituted
in place of either of the Merging Corporations.
1.10.2. Conveyances to Surviving Corporation. The Merging
Corporations hereby agree, respectively, that from time to time, as
and when requested by the Surviving Corporation, or by its successors
and assigns, they will execute and deliver or cause to be executed and
delivered, all such deeds, conveyances, assignments, permits, licenses
and other instruments, and will take or cause to be taken such further
or other action as the Surviving Corporation, its successors or
assigns, may deem necessary or desirable to vest or perfect in or
confirm to the Surviving Corporation, its successors and assigns,
title to and possession of all the property, rights, privileges,
powers, immunities, franchises, and interests referred to in this
Paragraph 1.10.2 and otherwise carry out the intent and purposes of
this Agreement.
1.10.3. Accounting Treatment. The assets and liabilities of
the Merging Corporations shall be taken up on the books of the
Surviving Corporation in accordance with generally accepted accounting
principles.
1.10.4. Unclaimed Merger Consideration; No Escheat. Subject
to any contrary provision of governing law, all consideration
deposited with the Exchange Agent or held by ITEQ for the payment of
the consideration into which the outstanding shares of Matrix Common
Stock shall have been converted, and remaining unclaimed for one year
after the Effective Date, shall be paid or delivered to ITEQ; and the
holder of any unexchanged certificate or certificates which before the
Effective Date represented shares of Matrix Common Stock shall
thereafter look only to ITEQ for exchange or payment thereof upon
surrender of such certificate or certificates to ITEQ.
1.10.5. Dissenting Stockholders of Matrix. ITEQ agrees that
with respect to any Matrix dissenting stockholder, assuming ITEQ does
not exercise its right, if any, to terminate this Agreement by reason
of the provisions of Paragraph 6.1.2 and if the merger contemplated
hereby becomes effective, ITEQ will cause Subcorp to promptly pay to
any dissenting stockholder of Matrix the amount, if any, to which such
holder is entitled under the provisions of Paragraph 262 of the DGCL,
provided such dissenter acts in strict compliance with such
provisions.
12
20
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF MATRIX
2.1. Representations and Warranties of Matrix. Matrix represents
and warrants as follows:
2.1.1. Organization and Standing. Matrix is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Delaware, has full requisite corporate power and
authority to carry on its business as it is currently conducted, and
to own and operate the properties currently owned and operated by it,
and is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all
jurisdictions in which the character of the properties owned or the
nature of the business conducted by it would make such qualification
or licensing necessary, except where the failure to be so qualified or
licensed could not reasonably be expected to have a Material Adverse
Effect on Matrix.
2.1.2. Agreement Authorized and its Effect on Other
Obligations. Upon approval of this Agreement and the transactions
contemplated hereby by the stockholders of Matrix, the consummation of
the transactions contemplated hereby will have been duly and validly
authorized by all necessary corporate action on the part of Matrix,
and this Agreement is a valid and binding obligation of Matrix
enforceable against Matrix (subject to normal equitable principles) in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, debtor relief or similar laws
affecting the rights of creditors generally. At the Effective Time,
the consummation of the merger contemplated by this Agreement will not
conflict with or result in a violation or breach of any term or
provision of, nor constitute a default under (i) the certificate of
incorporation or bylaws of Matrix or (ii) except as set forth in
Schedule 2.1.2, any obligation, indenture, mortgage, deed of trust,
lease, contract or other agreement to which Matrix or any of its
subsidiaries is a party or by which any of them or their properties
are bound, other than such violations, breaches or defaults as could
not reasonably be expected to have a Material Adverse Effect on
Matrix.
2.1.3. Capitalization. The authorized capitalization of
Matrix consists of 5,000,000 shares of preferred stock, par value $.01
per share, of which at August 31, 1997, no shares were issued or
outstanding; 15,000,000 shares of common stock, par value $.01 per
share of which at August 31, 1997, 9,402,139 shares were issued and
outstanding, and an additional 1,571,903 shares were reserved for
issuance in conjunction with various employee benefit plans; at the
same date, 89,014 shares were held in the Matrix treasury.
2.1.4. Subsidiaries. Schedule 2.1.4 lists the subsidiary
corporations of Matrix existing at August 31, 1997, and shows as to
each of such subsidiary corporations the percentage of the total
outstanding stock thereof which is owned by Matrix. Except as set
13
21
forth in Schedule 2.1.4, all outstanding shares of stock of the
subsidiary corporations owned by Matrix are validly issued, fully
paid, and nonassessable, and Matrix has good and marketable title
thereto free and clear of any mortgage, pledge, lien, charge, security
interest, option, right of first refusal, preferential purchase right,
defect, encumbrance or other right or interest of any other person
(collectively, an "Encumbrance"). Each such subsidiary is a
corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction under which it is incorporated and
has full requisite corporate power and authority to own its property
and carry on its business as presently conducted by it and is, or on
the Effective Date will be, duly qualified or licensed to do business
and is, or on the Effective Date will be, in good standing as a
foreign corporation authorized to do business in all jurisdictions in
which the character of the properties owned or the nature of the
business conducted makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed could not
reasonably be expected to have a Material Adverse Effect on Matrix.
As used in this Agreement (other than in Article I), the term "Matrix"
also includes any and all of its directly and indirectly held
subsidiaries, except where the context indicates to the contrary.
2.1.5. Reports and Financial Statements. Matrix has
previously furnished to ITEQ true and complete copies of (a) all of
Matrix's annual reports filed with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since August 31, 1994, (b) Matrix's quarterly and other reports filed
with the Commission since August 31, 1994, (c) all definitive proxy
solicitation materials filed with the Commission since August 31,
1994, and (d) any registration statements declared effective by the
Commission since August 31, 1994 (excluding registration statements on
Form S-8, other than the most recent such registration statement).
The consolidated financial statements of Matrix and its subsidiaries
included in Matrix's most recent report on Form 10-K and most recent
report on Form 10-Q, and any other reports filed with the Commission
by Matrix under the Exchange Act (the "Matrix Reports") were, or (if
filed after the date hereof) will be, prepared in accordance with
generally accepted accounting principles applied on a consistent basis
during the periods involved and fairly present, or will present, the
consolidated financial position for Matrix and its subsidiaries as of
the dates thereof and the consolidated results of their operations and
changes in financial position for the periods then ended; and the
Matrix Reports did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since
August 31, 1994, Matrix has filed with the Commission all reports
required to be filed by Matrix under the Exchange Act and the rules
and regulations of the Commission.
2.1.6. Liabilities. Matrix does not have any liabilities or
obligations, either accrued, absolute, contingent, or otherwise, or
have any knowledge of any potential liabilities or obligations, which
could reasonably be expected to have a Material Adverse Effect on
14
22
Matrix, other than those (i) disclosed in the Matrix Reports filed
with the Commission prior to the date of this Agreement or (ii) set
forth on Schedule 2.1.6 hereto.
2.1.7. Additional Matrix Information. Attached as Schedule
2.1.7 are true, complete and correct lists of the following items as
in existence on August 31, 1997 or thereafter, and Matrix agrees that
upon the request of ITEQ, it will furnish to ITEQ true, complete and
correct copies of any documents referred to in such lists:
2.1.7.1. Employee Compensation Plans. All bonus,
incentive compensation, deferred compensation, profit-sharing,
retirement, pension, welfare, group insurance, death benefit,
or other significant fringe benefit plans, arrangements or
trust agreements covering active, former or retired employees
of Matrix (collectively, "Matrix Plans"), together with copies
of the most recent annual reports (Form 5500) with respect to
such plans for which such Form 5500 is required and the most
recent IRS determination letters that have been received with
respect to such plans which are "qualified" plans under
Section 401(a) of the Code;
2.1.7.2. Certain Salaries. The names and salary
rates of all present officers and employees of Matrix whose
current regular annual salary rate is $50,000 or more, and, to
the extent existing on the date of this Agreement, all
agreements with respect to any severance payments to be paid
to them from and after the date of this Agreement;
2.1.7.3. Employee Agreements. Any collective
bargaining agreements of Matrix with any labor union or other
representative of employees, including amendments,
supplements, and written understandings, and all employment
and consulting agreements of Matrix;
2.1.7.4. Guaranties, etc. All third party
indebtedness, liabilities and commitments of others and as to
which Matrix is a guarantor, endorser, co-maker, surety, or
accommodation maker, or is contingently liable therefor
(excluding liabilities as an endorser of checks and the like
in the ordinary course of business) and all letters of credit,
whether stand-by or documentary, issued by any third party;
2.1.7.5. Environment/Real Property. All
environmental demands, notices of violations, settlements,
orders and decrees material to current operations conducted by
Matrix, all environmental audits, assessments, studies,
investigations and reviews conducted within the last five
years on any property owned or used by Matrix, and a list of
all real property owned or leased by Matrix.
2.1.8. No Undisclosed Defaults. Except as specified in the
Matrix Reports filed with the Commission prior to the date of this
Agreement or in Schedule 2.1.8, Matrix is not a party to, or bound by,
any material contract or arrangement of any kind to be performed after
15
23
the Effective Date, nor is Matrix in default in any material
obligation or covenant on its part to be performed under any material
obligation, lease, contract, order, plan or other arrangement, except
as so identified.
2.1.9. Absence of Certain Changes and Events. Except as set
forth in Schedule 2.1.9 hereto, since August 31, 1997, there has not
been:
2.1.9.1. Financial Change. Any material adverse
change in the financial condition, backlog, operations,
assets, liabilities or business of Matrix;
2.1.9.2. Property Damage. Any material damage,
destruction, or loss to the business or properties of Matrix
(whether or not covered by insurance);
2.1.9.3. Dividends. Any declaration, setting aside,
or payment of any dividend or other distribution in respect of
the common stock of Matrix, or any direct or indirect
redemption, purchase or any other acquisition by Matrix of any
such stock;
2.1.9.4. Capitalization Change. Any change in the
capital stock or in the number of shares or classes of
Matrix's authorized or outstanding capital stock as described
in Paragraph 2.1.3;
2.1.9.5. Labor Disputes. Any labor dispute (other
than routine grievances); or
2.1.9.6. Other Material Changes. Any other event or
condition known to Matrix particularly pertaining to and
adversely affecting the operations, assets or business of
Matrix (other than events or conditions which are of a general
or industry-wide nature and of general public knowledge) which
could reasonably be expected to have a Material Adverse Effect
on Matrix.
2.1.10. Taxes. Except as set forth in Schedule 2.1.10, and
except with respect to failures which, in the aggregate, would not
result in a Material Adverse Change in Matrix, proper and accurate
federal, state and local income, value added, sales, use, franchise,
gross revenue, turnover, excise, payroll, property, employment,
customs duties and any and all other tax returns, reports, and
estimates have been filed with appropriate governmental agencies,
domestic and foreign, by Matrix for each period for which any returns,
reports, or estimates were due (taking into account any extensions of
time to file before the date hereof); all taxes shown by such returns
to be payable and any other taxes due and payable have been paid other
than those being contested in good faith by Matrix; and the tax
provision reflected in Matrix's most recent balance sheet included in
the Matrix Reports filed with the Commission prior to the date of this
Agreement is adequate, in accordance with generally accepted
accounting principles, to cover liabilities of Matrix at the date
thereof for all taxes,
16
24
including any interest, penalties and additions to taxes of any
character whatsoever applicable to Matrix or its assets or business.
Except as set forth on Schedule 2.1.10, no waiver of any statute of
limitations executed by Matrix with respect to federal or state income
or other tax is in effect for any period. The federal income tax
returns of Matrix have been examined by the Internal Revenue Service
for the years ended May 31, 1992, 1993 and 1994, and such examinations
have been closed and any tax, penalty and/or interest proposed as a
result thereof has been paid in full. There are no tax liens on any
assets of Matrix except for taxes not yet due and those which could
not reasonably be expected to have a Material Adverse Effect on
Matrix.
2.1.11. Intellectual Property. Except as set forth in
Schedule 2.1.11, Matrix owns or possesses licenses to use all patents,
patent applications, trademarks and service marks (including
registrations and applications therefor), trade names, copyrights and
written know-how, trade secrets and all other similar proprietary data
and the goodwill associated therewith (collectively, the "Intellectual
Property") that are either material to the business of Matrix or that
are necessary for the manufacture, use or sale of any products
manufactured, used or sold by Matrix. The Matrix Intellectual
Property is owned or licensed by Matrix free and clear of any
Encumbrance other than such Encumbrances as are listed in Schedule
2.1.11. Except as otherwise indicated in such Schedule, Matrix has
not granted to any other person any license to use any Intellectual
Property. Matrix has not received any notice of infringement,
misappropriation, or conflict with, the intellectual property rights
of others in connection with the use by Matrix of the Matrix
Intellectual Property.
2.1.12. Title to Properties. With minor exceptions which in
the aggregate are not material, and except for merchandise and other
property sold, used or otherwise disposed of in the ordinary course of
business for fair value, Matrix has good and marketable title to all
its properties, interests in properties and assets, real and personal,
reflected in the most recent balance sheet of Matrix included in the
Matrix Reports filed with the Commission prior to the date of this
Agreement, free and clear of any Encumbrance of any nature whatsoever,
except (i) liens and Encumbrances reflected in the most recent balance
sheet of Matrix included in the Matrix Reports filed with the
Commission prior to the date of this Agreement, (ii) liens for current
taxes not yet due and payable, and (iii) such imperfections of title,
easements and Encumbrances, if any, as are not substantial in
character, amount, or extent and do not and will not materially
detract from the value, or interfere with the present use, of the
property subject thereto or affected thereby, or otherwise materially
impair business operations. All leases pursuant to which Matrix
leases (whether as lessee or lessor) any substantial amount of real or
personal property are valid, and effective; and there is not, under
any such leases, any existing or prospective default or event of
default or event which with notice or lapse of time, or both, would
constitute a default by Matrix and in respect to which Matrix has not
taken adequate steps to prevent a default from occurring. The
buildings and premises of Matrix that are used in its business are in
good operating condition and repair, subject only to ordinary wear and
tear. All major items of equipment of Matrix are in a state of
reasonable maintenance and repair, ordinary wear and tear excepted,
and are
17
25
free from any known defects except as may be repaired by routine
maintenance and such minor defects as to not substantially interfere
with the continued use thereof in the conduct of normal operations.
2.1.13. Litigation. Except to the extent set forth in the
Matrix Reports filed with the Commission prior to the date of this
Agreement or in Schedule 2.1.13, there is no suit, action, or legal,
administrative, arbitration, or other proceeding or governmental
investigation pending to which Matrix is a party or, to the knowledge
of Matrix, might become a party or which particularly affects Matrix,
nor is any change in the zoning or building ordinances directly
affecting the real property or leasehold interests of Matrix, pending
or, to the knowledge of Matrix, threatened.
2.1.14. Environmental Compliance. Except as set forth in
Schedule 2.1.14;
2.1.14.1. Environmental Conditions. There are no
environmental conditions or circumstances, such as the
presence or release of any hazardous substance, on any
property presently or previously owned by Matrix that could
reasonably be expected to have a Material Adverse Effect on
Matrix.
2.1.14.2. Permits, etc. Matrix has in full force
and effect all environmental permits, licenses, approvals and
other authorizations required to conduct its operations and is
operating in compliance thereunder in all material respects.
2.1.14.3. Compliance. Matrix's operations and use
of its assets do not violate, and within applicable statutes
of limitations have not violated, any applicable federal,
state or local law, statute, ordinance, rule, regulation,
order or notice requirement pertaining to (a) the condition or
protection of air, groundwater, surface water, soil or other
environmental media, (b) the environment, including natural
resources or any activity which affects the environment, or
(c) the regulation of any pollutants, contaminants, waste,
substances (whether or not hazardous or toxic), including,
without limitation, the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. Section 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. Section 1609 et seq.), the Clean Water Act (33
U.S.C. 1251 et seq.), the Clean Air Act (42 U.S.C. Section
7401 et seq.), the Toxic Substances Control Act (17 U.S.C.
Section 2601 et seq.), the Federal Insecticide Fungicide and
Rodenticide Act (7 U.S.C. Section 136 et seq.), the Safe
Drinking Water Act (42 U.S.C. Section 201 and Section 300f
et seq.), the Rivers and Harbors Act (33 U.S.C. Section 401
et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et
seq.) and analogous state and local provisions, as any of the
foregoing may have been amended or supplemented from time to
time (collectively the "Applicable Environmental Laws"),
except for violations which could not reasonably be expected
to have a Material Adverse Effect on Matrix.
18
26
2.1.14.4. Environmental Claims. No notice has been
served on Matrix from any entity, governmental agency or
individual regarding any existing, pending or threatened
investigation or inquiry under any Applicable Environmental
Law, including but not limited to any claims for remedial
obligations or contribution under any Applicable Environmental
Law, other than any of the foregoing which could not
reasonably be expected to have a Material Adverse Effect on
Matrix.
2.1.14.5. Renewals. Matrix does not know of any
reason ITEQ would not be able to renew any of the permits,
licenses, or other authorizations required pursuant to any
Applicable Environmental Laws to operate and use any of
Matrix's assets for their current purposes and uses.
2.1.14.6. PCBs. No polychlorinated biphenyls
("PCB's") are currently being used by Matrix in its operations
or on its properties.
2.1.15. Compliance with Other Laws. Except as set forth in
the Matrix Reports filed with the Commission prior to the date of this
Agreement or in Schedule 2.1.15, Matrix is not in violation of or in
default with respect to, or in alleged violation of or alleged default
with respect to, the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.) as amended ("OSHA"), or any other applicable law
or any applicable rule, regulation, or any writ or decree of any court
or any governmental commission, board, bureau, agency, or
instrumentality, or delinquent with respect to any report required to
be filed with any governmental commission, board, bureau, agency or
instrumentality, except for violations which, either singly or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect on Matrix.
2.1.16. Finder's Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried
on by Matrix and its counsel directly with ITEQ and its counsel,
without the intervention of any other person as the result of any act
of Matrix, and so far as is known to Matrix, without the intervention
of any other person in such manner as to give rise to any valid claim
against any of the parties hereto for a brokerage commission, finder's
fee or any similar payments, other than fees to be paid (i) by ITEQ to
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation ("ITEQ Advisor") in
connection with the transaction (including the rendition of a fairness
opinion to ITEQ) and (ii) by Matrix to PaineWebber Incorporated ("PW")
(under financial arrangements approved in advance by ITEQ) solely for
the rendition of a fairness opinion to Matrix in connection with the
merger contemplated by this Agreement.
2.1.17. Compliance with ERISA. Matrix has made available to
ITEQ a copy of each Matrix Plan, any related trust agreement and
annuity or insurance contract, if any, and each plan's most recent
annual report filed with the Internal Revenue Service, if any, and;
(i) each Matrix Plan has been maintained and administered in material
compliance with its terms and with the requirements prescribed by any
and all applicable statutes, orders, rules and
19
27
regulations, and is, to the extent required by applicable law or
contract, fully funded without having any deficit or unfunded
actuarial liability; (ii) all required employer contributions under
any such plans have been made and the applicable funds have been
funded in accordance with the terms thereof; (iii) to the extent
applicable, the Matrix Plans comply, in all material respects, with
the requirements of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the Code, and any Matrix Plan intended
to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified and nothing has
occurred to cause the loss of such qualified status; (iv) no Matrix
Plan is covered by Title IV of ERISA or Section 412 of the Code; (v)
there are no pending or anticipated material claims against or
otherwise involving any of the Matrix Plans and no suit, action or
other litigation (excluding claims for benefits incurred in the
ordinary course of Matrix Plan activities) has been brought against or
with respect to any Matrix Plan; (vi) all material contributions,
reserves or premium payments, required to be made as of the date
hereof to the Matrix Plans have been made or provided for; (vii)
Matrix has not incurred any liability under subtitle C or D of Title
IV of ERISA with respect to any "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by Matrix or any entity which is considered one employer
with Matrix under Section 4001 of ERISA; (viii) Matrix has not
incurred any withdrawal liability under Subtitle E of Title IV of
ERISA with respect to any "multiemployer plan," within the meaning of
Section 4001(a)(3) of ERISA; and (ix) Matrix has no obligations for
retiree health and life benefits under any Matrix Plan, except as
required by Part 6 of Title I of ERISA or as set forth on Schedule
2.1.17, and there are no restrictions on the rights of Matrix to amend
or terminate any such Matrix Plan without incurring any liability
thereunder.
2.1.18. Investigations. Except as required pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1978 and the rules and
regulations promulgated thereunder (collectively, "HSR") and any
applicable comparable foreign laws and regulations, no investigation
or review by any governmental entity with respect to Matrix or any of
the transactions contemplated by this Agreement is pending or, to the
best of Matrix's knowledge, threatened, nor has any governmental
entity indicated to Matrix an intention to conduct the same.
2.1.19. Product Warranty. There are no existing liabilities
or, to the knowledge of Matrix, potential liabilities, arising from
claims regarding the performance or design of the products and
services sold by Matrix either in the past or at present that in the
aggregate could reasonably be expected to have a Material Adverse
Effect on Matrix.
2.1.20. Information for Proxy Statement. All information and
data (including financial statements) concerning Matrix which is or
will be included in the Form S-4 registration statement and proxy
statement (collectively, the "Proxy Statement") issued in connection
with the transactions contemplated by this Agreement will be furnished
by Matrix for inclusion therein and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not
misleading.
20
28
2.1.21. Investment Company. Matrix is not an "investment
company," or an "affiliated person of" or "promoter" or "principal
underwriter" of an investment company, as those terms are defined in
the Investment Company Act of 1940, as amended (the "Investment
Company Act").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ITEQ
3.1. Representations and Warranties of ITEQ. ITEQ represents and
warrants as follows:
3.1.1. Organization and Standing. ITEQ is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Delaware, has full requisite corporate power and
authority to carry on its business as it is currently conducted, and
to own and operate the properties currently owned and operated by it,
and is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all
jurisdictions in which the character of the properties owned or the
nature of the business conducted by it would make such qualification
or licensing necessary, except where the failure to be so qualified or
licensed would not have a material adverse effect on the financial
condition, properties or business of ITEQ.
3.1.2. Agreement Authorized and its Effect on Other
Obligations. Upon approval of this Agreement by the stockholders of
ITEQ, the consummation of the transactions contemplated hereby will
have been duly and validly authorized by all necessary corporate
action on the part of ITEQ, and this Agreement will be a valid and
binding obligation of ITEQ enforceable against ITEQ (subject to normal
equitable principles) in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, debtor relief or similar laws affecting the rights of
creditors generally. At the Effective Time, the consummation of the
merger contemplated by this Agreement will not conflict with or result
in a violation or breach of any term or provision of, nor constitute a
default under (i) the certificate of incorporation or bylaws of ITEQ
or (ii) subject to prior receipt of the "Consent" (as defined in
Paragraph 4.4.8), any obligation, indenture, mortgage, deed of trust,
lease, contract or other agreement to which ITEQ or any of its
subsidiaries is a party or by which any of them or their properties
are bound, other than such violations, breaches or defaults as would
not result in any material adverse change in the financial condition,
properties or business of ITEQ and its subsidiaries taken as a whole.
3.1.3. Capitalization. The capitalization of ITEQ consists
of 1,000,000 shares of preferred stock, par value $.01 per share, of
which at September 30, 1997 no shares were issued or outstanding; and
40,000,000 shares of ITEQ Common Stock, par value $.001 per
21
29
share, of which at September 30, 1997, 26,618,936 shares were issued
and outstanding and 3,373,365 shares were reserved for issuance in
connection with various benefit plans and upon exercise of outstanding
warrants; at the same date, 791 shares of ITEQ Common Stock were held
in ITEQ's treasury.
3.1.4. Subsidiaries. All outstanding shares of stock of
ITEQ's subsidiary corporations are directly or indirectly owned by
ITEQ, are validly issued, fully paid, and nonassessable and, except as
set forth in Schedule 3.1.4, ITEQ has good and marketable title
thereto free and clear of any Encumbrance. Each such subsidiary is a
corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction under which it is incorporated and
has full requisite corporate power and authority to own its property
and carry on its business as presently conducted by it and is, or on
the Effective Date will be, duly qualified or licensed to do business
and is, or on the Effective Date will be, in good standing as a
foreign corporation authorized to do business in all jurisdictions in
which the character of the properties owned or the nature of the
business conducted makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed could not
reasonably be expected to have a Material Adverse Effect on ITEQ. As
used in this Agreement (other than in Article I), the term "ITEQ" also
includes any and all of its directly and indirectly held subsidiaries,
except where the context indicates to the contrary.
3.1.5. Reports and Financial Statements. ITEQ has
previously furnished to Matrix true and complete copies of (a) all
ITEQ annual reports filed with the Commission pursuant to the Exchange
Act, since December 31, 1994, (b) ITEQ's quarterly and other reports
filed with the Commission since December 31, 1994, (c) all definitive
proxy solicitation materials filed with the Commission since December
31, 1994, and (d) any registration statements declared effective by
the Commission since December 31, 1994. The consolidated financial
statements of ITEQ and its subsidiaries included in ITEQ's most recent
report on Form 10-K and most recent report on Form 10-Q, and any other
reports filed with the Commission by ITEQ under the Exchange Act (the
"ITEQ Reports") were, or (if filed after the date hereof) will be,
prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved and fairly
present, or will present, the consolidated financial position for ITEQ
and its subsidiaries as of the dates thereof and the consolidated
results of their operations and changes in financial position for the
periods then ended; and the ITEQ Reports did not and will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Since December 31, 1994, ITEQ has filed with the
Commission all reports required to be filed by ITEQ under the Exchange
Act and the rules and regulations of the Commission.
3.1.6. Liabilities. ITEQ does not have any liabilities or
obligations, either accrued, absolute, contingent, or otherwise, or
have any knowledge of any potential liabilities or
22
30
obligations, which could reasonably be expected to have a Material
Adverse Effect on ITEQ, other than those (i) disclosed in the ITEQ
Reports filed with the Commission prior to the date of this Agreement
or (ii) set forth on Schedule 3.1.6 hereto.
3.1.7. No Undisclosed Defaults. Except as specified in the
ITEQ Reports filed with the Commission prior to the date of this
Agreement or in Schedule 3.1.7, ITEQ is not a party to, or bound by,
any material contract or arrangement of any kind to be performed after
the Effective Date, nor is ITEQ in default in any material obligation
or covenant on its part to be performed under any material obligation,
lease, contract, order, plan or other arrangement except as identified
in Schedule 3.1.7.
3.1.8. Absence of Certain Changes and Events in ITEQ.
Except as set forth in Schedule 3.1.8 hereto, since September 30,
1997, there has not been:
3.1.8.1. Financial Change. Any material adverse
change in the financial condition, operations, assets or
business of ITEQ;
3.1.8.2. Property Damage. Any material damage,
destruction, or loss to the business or properties of ITEQ
(whether or not covered by insurance);
3.1.8.3. Dividends. Any declaration, setting aside,
or payment of any dividend or other distribution in respect of
any dividend or other distribution in respect of ITEQ's
capital stock, or any direct or indirect redemption, purchase
or any other acquisition of such stock;
3.1.8.4. Capitalization Change. Any change in the
capital stock or in the number of shares or classes of ITEQ's
authorized or outstanding capital stock as described in
Paragraph 3.1.3;
3.1.8.5. Labor Disputes. Any labor dispute (other
than routine grievances); or
3.1.8.6. Other Material Changes. Any other event or
condition known to ITEQ particularly pertaining to and
adversely affecting the operations, assets or business of ITEQ
(other than events or conditions which are of a general or
industry-wide nature and of general public knowledge) which
could reasonably be expected to have a Material Adverse Effect
on ITEQ.
3.1.9. Taxes. Except as set forth in Schedule 3.1.9, and
except with respect to failures which in the aggregate, would not
result in a Material Adverse Change in ITEQ, proper and accurate
federal, state and local income, value added, sales, use, franchise,
gross revenue, turnover, excise, payroll, property, employment,
customs duties and any and all other tax returns, reports, and
estimates have been filed with appropriate governmental
23
31
agencies, domestic and foreign, by ITEQ for each period for which any
returns, reports, or estimates were due (taking into account any
extensions of time to file before the date hereof); all taxes shown by
such returns to be payable and any other taxes due and payable have
been paid other than those being contested in good faith by ITEQ; and
the tax provision reflected in ITEQ's most recent balance sheet
included in the ITEQ Reports filed with the Commission prior to the
date of this Agreement is adequate, in accordance with generally
accepted accounting principles, to cover liabilities of ITEQ at the
date thereof for all taxes, including any interest, penalties and
additions to taxes of any character whatsoever applicable to ITEQ or
its assets or business. Except as set forth on Schedule 3.1.9, no
waiver of any statute of limitations executed by ITEQ with respect to
federal or state income or other tax is in effect for any period. The
federal income tax returns of ITEQ have never been examined by the
Internal Revenue Service, but notice with respect to an audit for the
year ended December 31, 1994 has been received by ITEQ. There are no
tax liens on any assets of ITEQ except for taxes not yet due and those
which could not reasonably be expected to have a Material Adverse
Effect on ITEQ.
3.1.10. Intellectual Property. Except as set forth in
Schedule 3.1.10, ITEQ owns or possesses licenses to use all ITEQ
Intellectual Property that is either material to the business of ITEQ
or that is necessary for the manufacture, use or sale of any products
manufactured, used or sold by ITEQ. The ITEQ Intellectual Property is
owned or licensed by ITEQ free and clear of any Encumbrance other than
such Encumbrances as are listed in Schedule 3.1.10. Except as
otherwise indicated in such Schedule, ITEQ has not granted to any
other person any license to use any ITEQ Intellectual Property. ITEQ
has not received any notice of infringement, misappropriation, or
conflict with, the intellectual property rights of others in
connection with the use by ITEQ of the ITEQ Intellectual Property.
3.1.11. Title to Properties. Except as set forth in Schedule
3.1.11 and such other exceptions which in the aggregate are not
material, and except for merchandise and other property sold, used or
otherwise disposed of in the ordinary course of business for fair
value, ITEQ has good and marketable title to all its properties,
interests in properties and assets, real and personal, reflected in
the most recent financial statements contained in the ITEQ Reports
filed with the Commission prior to the date of this Agreement, free
and clear of any Encumbrance of any nature whatsoever, except (i)
liens and Encumbrances reflected in the most recent balance sheet of
ITEQ included in the ITEQ Reports filed with the Commission prior to
the date of this Agreement, (ii) liens for current taxes not yet due
and payable, and (iii) such imperfections of title, easements and
Encumbrances, if any, as are not substantial in character, amount, or
extent and do not and will not materially detract from the value, or
interfere with the present use, of the property subject thereto or
affected thereby, or otherwise materially impair business operations.
All leases pursuant to which ITEQ leases (whether as lessee or lessor)
any substantial amount of real or personal property are valid, and
effective; and there is not, under any such leases, any existing or
prospective default or event of default or event which with notice or
lapse of time, or both, would constitute a default by ITEQ and in
respect to which ITEQ has not taken adequate steps to prevent a
default from
24
32
occurring. The buildings and premises of ITEQ that are used in its
business are in good operating condition and repair, subject only to
ordinary wear and tear. All major items of equipment of ITEQ are in
good operating condition and in a state of reasonable maintenance and
repair, ordinary wear and tear excepted, and are free from any known
defects except as may be repaired by routine maintenance and such
minor defects as to not substantially interfere with the continued use
thereof in the conduct of normal operations.
3.1.12. Litigation. Except to the extent set forth in the
ITEQ Reports filed with the Commission prior to the date of this
Agreement or in Schedule 3.1.12, there is no suit, action, or legal,
administrative, arbitration, or other proceeding or governmental
investigation pending to which ITEQ is a party or, to the knowledge of
ITEQ, might become a party or which particularly affects ITEQ, nor is
any change in the zoning or building ordinances directly affecting the
real property or leasehold interests of ITEQ, pending or, to the
knowledge of ITEQ, threatened.
3.1.13. Environmental Compliance. Except as set forth in
Schedule 3.1.13;
3.1.13.1. Environmental Conditions. There are no
environmental conditions or circumstances such as the presence
or release of any hazardous substance on any property
presently or previously owned by ITEQ that could reasonably be
expected to have a Material Adverse Effect on ITEQ.
3.1.13.2. Permits, etc. ITEQ has in full force and
effect all environmental permits, licenses, approvals and
other authorizations required to conduct its operations and is
operating in compliance thereunder in all material respects.
3.1.13.3. Compliance. ITEQ's operations and use of
its assets do not violate any Applicable Environmental Laws,
except for violations which could not reasonably be expected
to have a Material Adverse Effect on ITEQ.
3.1.13.4. Environmental Claims. No notice has been
served on ITEQ from any entity, governmental agency or
individual regarding any existing, pending or threatened
investigation or inquiry related to alleged violations under
any Applicable Environmental Laws, or regarding any claims for
remedial obligations or contribution under any Applicable
Environmental Laws, other than any of the foregoing which
could not reasonably be expected to have a Material Adverse
Effect on ITEQ.
3.1.13.5. Renewals. ITEQ does not know of any
reason ITEQ would not be able to renew any of the permits,
licenses, or other authorizations required pursuant to any
Applicable Environmental Laws to operate and use any of ITEQ's
assets for their current purposes and uses.
25
33
3.1.13.6. PCB's. No PCB's are currently being used
by ITEQ in its operations or on its properties.
3.1.14. Compliance with Other Laws. Except as set forth in
the ITEQ Reports filed with the Commission prior to the date of this
Agreement or in Schedule 3.1.14, ITEQ is not in violation of or in
default with respect to, or in alleged violation of or alleged default
with respect to, OSHA or any other applicable law or any applicable
rule, regulation, or any writ or decree of any court or any
governmental commission, board, bureau, agency, or instrumentality, or
delinquent with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality,
except for violations which, either singly or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect on ITEQ.
3.1.15. Finder's Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried
on by ITEQ and its counsel, directly with Matrix or its counsel,
without the intervention of any other person as the result of an act
of ITEQ and, so far as known to ITEQ, without the intervention of any
other person in such manner as to give rise to any valid claim against
any of the parties hereto for a brokerage commission, finder's fee, or
any similar payments, other than fees to be paid by (i) ITEQ to ITEQ's
Advisor, if any, and (ii) Matrix to PW (solely for the rendition of a
fairness opinion) in connection with the merger contemplated by this
Agreement.
3.1.16. Compliance with ERISA. All bonus, incentive
compensation, stock option, deferred compensation, profit-sharing,
retirement, pension, welfare, group insurance, death benefit, or other
fringe benefit plans, arrangements or trust agreements covering
active, former or retired employees of ITEQ (collectively, the "ITEQ
Plans") are listed in Schedule 3.1.16. ITEQ has made available to
Matrix a copy of each ITEQ Plan, any related trust agreement and
annuity or insurance contract, if any, and each plan's most recent
annual report filed with the Internal Revenue Service, if any, the
most recent reports with respect to such plans, trust agreements and
annuity or insurance contracts filed with any governmental agency, all
Internal Revenue Service determination letters that have been received
with respect to such plans and: (i) each ITEQ Plan has been maintained
and administered in material compliance with its terms and with the
requirements prescribed by any and all applicable statutes, orders,
rules and regulations, and is, to the extent required by applicable
law or contact, fully funded without having any deficit or unfunded
actuarial liability; (ii) all required employer contributions under
any such plans have been made and the applicable funds have been
funded in accordance with the terms thereof; (iii) to the extent
applicable, the ITEQ Plans comply, in all material respects, with the
requirements of ERISA and the Code, and any ITEQ Plan intended to be
qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified and nothing has occurred
to cause the loss of such qualified status; (iv) no ITEQ Plan is
covered by Title IV of ERISA or Section 412 of the Code; (v) there are
no pending or anticipated material claims against or otherwise
involving any of the ITEQ Plans and no suit, action or other
litigation
26
34
(excluding claims for benefits incurred in the ordinary course of ITEQ
Plan activities) has been brought against or with respect to any ITEQ
Plan; (vi) all material contributions, reserves or premium payments,
required to be made as to the date hereof to the ITEQ Plans have been
made or provided for; (vii) ITEQ has not incurred any liability under
subtitle C or D of Title IV of ERISA with respect to any
"single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by ITEQ or any entity which is
considered one employer with ITEQ under Section 4001 of ERISA; (viii)
ITEQ has not incurred any withdrawal liability under Subtitle E of
Title IV of ERISA with respect to any "multiemployer plan," within the
meaning of Section 4001(a)(3) of ERISA; and (ix) ITEQ has no
obligations for retiree health and life benefits under any ITEQ Plan,
except as required by Part 6 of Title I of ERISA or as set forth on
Paragraph 3.1.16, and there are no restrictions on the rights of ITEQ
to amend or terminate any such ITEQ Plan without incurring any
liability thereunder.
3.1.17. Investigations. Except as required pursuant to HSR
and any applicable comparable foreign laws and regulations, no
investigation or review by any governmental entity with respect to
ITEQ in connection with any of the transactions contemplated by this
Agreement is pending or, to the best of ITEQ's knowledge, threatened,
nor has any governmental entity indicated to ITEQ an intention to
conduct the same.
3.1.18. Product Warranty. There are no existing liabilities
or, to the knowledge of ITEQ, potential liabilities, arising from
claims regarding the performance or design of the products sold by
ITEQ either in the past or at present that in the aggregate could
reasonably be expected to have a Material Adverse Effect on ITEQ.
3.1.19. Information for Proxy Statement. All information and
data (including financial statements) concerning ITEQ which is or will
be included in the Proxy Statement to be issued in connection with the
transactions contemplated by this Agreement will be furnished by ITEQ
for inclusion therein and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained therein not misleading.
3.1.20. Investment Company. ITEQ is not an "investment
company," or an "affiliated person of" or "promoter" or "principal
underwriter" of an investment company, as those terms are defined in
the Investment Company Act.
3.1.21. Financing. ITEQ has adequate financing commitments
available to it under its principal bank credit facility to fund the
entire Cash Consideration and, subject to the prior consent of the
requisite percentage of banks participating in such facility (the
"Consent"), will have the right on the Effective Date to draw on such
commitments in an amount equal to the entire Cash Consideration.
27
35
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE DATE
4.1. Agreements of ITEQ and Matrix. Each of ITEQ and Matrix agrees
that from the date hereof to the Effective Date, it will (and unless otherwise
indicated by the context, since September 30, 1997 in the case of ITEQ or
August 31, 1997 in the case of Matrix, it has):
4.1.1. Maintenance of Present Business and Employees. Other
than as contemplated by this Agreement, operate its business only in
the usual, regular, and ordinary manner so as to maintain the goodwill
it now enjoys and, to the extent consistent with such operation, use
all commercially reasonable efforts to preserve intact its present
business organization, keep available the services of its present
officers and employees, and preserve its relationships with customers,
suppliers, jobbers, distributors, and others having business dealings
with it;
4.1.2. Maintenance of Properties. At its expense, maintain
all of its property and assets in customary repair, order, and
condition, reasonable wear and use and damage by fire or unavoidable
casualty excepted;
4.1.3. Maintenance of Books and Records. Maintain its books
of account and records in the usual, regular, and ordinary manner, in
accordance with generally accepted accounting principles applied on a
consistent basis;
4.1.4. Compliance with Law. Duly comply in all material
respects with all laws applicable to it and to the conduct of its
business;
4.1.5. Compliance with Agreement. At its expense, take all
commercially reasonable actions as may be necessary (i) to insure that
the representations and warranties made by it herein are true and
correct at the Effective Time, (ii) to fully perform all covenants
made by it herein and (iii) to satisfy timely all other obligations
imposed upon it by this Agreement; and
4.1.6. Inspection of Each Merging Corporation. Permit the
other party hereto, and their officers and authorized representatives,
during normal business hours, to inspect its records and to consult
with its officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties
hereinabove made and the compliance with covenants contained in this
Agreement. ITEQ and Matrix each agrees that it and its officers and
representatives shall hold all data and information obtained with
respect to the other party hereto in confidence and each further
agrees that it will not use such data or information or disclose the
same to others, except to the extent such data or information either
are, or become, published or a matter of public knowledge.
28
36
4.2. Additional Agreements of ITEQ and Matrix. ITEQ and Matrix
agree to take the following actions after the date hereof:
4.2.1. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Each party shall file such
materials as are required under HSR with respect to the transaction
contemplated hereby and shall cooperate with the other party to the
extent necessary to assist the other party in the preparation of such
filings, and the filing fee required by HSR shall be paid by ITEQ;
4.2.2. Proxy Statement. ITEQ and Matrix shall cooperate in
the preparation and prompt filing of the Proxy Statement with the
Commission with respect to the meetings of their stockholders called
for the purpose of, among other things, securing stockholder approval
of the merger contemplated by this Agreement and the consummation of
the transaction herein contemplated. Each of ITEQ and Matrix shall
use all reasonable efforts to have the Proxy Statement cleared by the
Commission at the earliest possible date; and
4.2.3. Notice of Material Developments. Each of ITEQ and
Matrix will promptly notify the other party in writing of (i) any
event occurring subsequent to the date of this Agreement which would
render any representation or warranty of such party contained in this
Agreement untrue or inaccurate in any material respect, (ii) any
breach by such party of any covenant or agreement contained in this
Agreement, or (iii) any "Material Adverse Change" in, or any changes,
events, circumstances or conditions which, in the aggregate, could
reasonably be expected to have a "Material Adverse Effect" in, the
consolidated financial condition, business or affairs of such party,
whether or not occurring in the ordinary course of business. As used
in this Agreement, "Material Adverse Change" or Material Adverse
Effect" are used interchangeably and each means any change, event,
circumstance or condition (collectively, a "Change") which, when
considered with all other Changes (any other suggestion in this
Agreement to the contrary notwithstanding), would reasonably be
expected to result in a "loss" having the effect of so fundamentally
adversely affecting the business or financial prospects of ITEQ or
Matrix, as the case may be, that the benefits reasonably expected to
be obtained by the other party to the merger contemplated by this
Agreement would be jeopardized with relative certainty. In no event
shall (i) a change in the trading prices of either of ITEQ's or
Matrix's equity securities between the date hereof and the Effective
Date, in and of itself, or (ii) any diminution after November 30, 1997
in the operating results of either ITEQ or Matrix which is solely
attributable to one-time, non-recurring and/or unusual costs or
provisions which but for the merger contemplated by this Agreement
would not have been incurred or provided constitute a Material Adverse
Change or be deemed to have a Material Adverse Effect." The term
"loss" shall mean any and all direct or indirect payments,
obligations, assessments, losses, loss of income, liabilities, fines,
penalties, costs and expenses paid or incurred or more likely than not
to be paid or incurred, or diminutions in value of any kind or
character (whether or not known or unknown, conditional or
unconditional, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated, secured
or unsecured, accrued, absolute, contingent or otherwise) that are
more likely than not to occur, including without limitation penalties,
interest on any amount payable to a third party as a
29
37
result of the foregoing and any legal or other expenses reasonably
incurred or more likely than not to be incurred in connection with
investigating or defending any demands, claims, actions or causes of
action that, if adversely determined, would likely result in losses,
and all amounts paid in settlement of claims or actions; provided,
however, that losses shall be net of any insurance proceeds entitled
to be received from a nonaffiliated insurance company on account of
such losses (after taking into account any costs incurred in obtaining
such proceeds and any increase in insurance premiums as a result of a
claim with respect to such proceeds).
4.3. Additional Agreements of Matrix. Matrix agrees that from the
date hereof to the Effective Date, it will (and unless otherwise indicated by
the context, since August 31, 1997, it has):
4.3.1. Prohibition of Certain Compensatory Arrangements.
Not enter into any employment, compensation, bonus or severance
agreements or arrangements which (i) in the case of employment
agreements, cannot be terminated on notice of 30 days or less or (ii)
provide for the payment of any bonus or severance or other benefits
after the date hereof (other than any of such which ITEQ approves in
writing or has previously approved in writing);
4.3.2. Prohibition of Certain Loans. Not incur any
borrowings except (i) the refinancing of indebtedness now outstanding
or additional borrowings under its existing revolving credit
facilities in the normal course of business, (ii) the prepayment by
customers of amounts due or to become due for goods sold or services
rendered or to be rendered in the future, (iii) trade payables
incurred in the ordinary course of business, or (iv) as is otherwise
agreed to in writing by ITEQ;
4.3.3. Prohibition of Certain Commitments. From the date
hereof only, not enter into commitments of a capital expenditure
nature or incur any contingent liability which would exceed $100,000,
in the aggregate, except (i) in the case of budgeted fiscal 1998
capital expenditures not to exceed an aggregate of $750,000, where
Matrix shall advise ITEQ in writing of each proposed capital
expenditure of $20,000 or more and ITEQ shall have consented in
writing within two business days after receipt of the proposal (which
consent shall not be unreasonably withheld) or shall have failed to
object in writing to such proposed expenditure within such two
business day period; (ii) as may be required by law or (iii) as is
otherwise agreed to in writing by ITEQ;
4.3.4. Disposal of Assets. Not sell, dispose of, or
encumber, any substantial property or assets, except (i) in the
ordinary course of business or (ii) as is otherwise agreed to in
writing by ITEQ;
4.3.5. Maintenance of Insurance. Maintain insurance upon
all its properties and with respect to the conduct of its business of
such kinds and in such amounts as presently carried by it, which
insurance may be added to from time to time in its discretion;
provided,
30
38
that if during the period from the date hereof to and including the
Effective Date any of its property or assets are damaged or destroyed
by fire or other casualty, the obligations of ITEQ and Matrix under
this Agreement shall not be affected thereby (subject, however, to the
provision that the coverage limits of such policies are adequate in
amount to cover the replacement value of such property or assets and
loss of profits during replacement, less commercially reasonable
deductible, if of material significance to the assets or operations of
Matrix) but it shall promptly notify ITEQ in writing thereof and
proceed with the repair or restoration of such property or assets in
such manner and to such extent as may be approved by ITEQ, and upon
the Effective Date all proceeds of insurance and claims of every kind
arising as a result of any such damage or destruction shall remain the
property of Surviving Corporation;
4.3.6. Matrix Acquisition Proposals. Not directly or
indirectly:
4.3.6.1. No Solicitation. Authorize any of its
respective agents to: (i) solicit, initiate, encourage
(including by way of furnishing information) or take any other
action to facilitate, any inquiry or the making of any
proposal which constitutes, or may reasonably be expected to
lead to, any acquisition or purchase of a substantial amount
of assets of, or any equity interest in, Matrix or any merger,
consolidation, business combination, sale of substantially all
assets, sale of securities, recapitalization, liquidation,
dissolution or similar transaction involving Matrix (other
than the transactions contemplated by this Agreement) or any
other material corporate transaction the consummation of which
would or could reasonably be expected to impede, interfere
with, prevent or materially delay the merger contemplated by
this Agreement (collectively, "Matrix Transaction Proposals")
or agree to or endorse any Matrix Transaction Proposal or (ii)
propose, enter into or participate in any discussions or
negotiations regarding any of the foregoing, or furnish to
another person any information with respect to its business,
properties or assets or any of the foregoing, or otherwise
cooperate in any way with, or assist or participate in,
facilitate or encourage, an effort or attempt by any other
person to do or seek any of the foregoing, provided, however,
that the foregoing clauses (i) and (ii) shall not prohibit
Matrix from (A) furnishing information pursuant to a
confidentiality letter concerning Matrix and its businesses,
properties or assets to a third party who has made a Superior
Matrix Transaction Proposal (as defined below), (B) engaging
in discussions or negotiations with such a third party who has
made a Superior Matrix Transaction Proposal or (C) following
receipt of a Superior Matrix Transaction Proposal, taking and
disclosing to its stockholders a position with respect thereto
or changing the recommendation by Matrix's board of directors
but in each case referred to in the foregoing clauses (A)
through (C) only after the board of directors of Matrix
concludes in good faith following advice of its outside
counsel that such action is reasonably necessary in order for
the board of directors of Matrix to comply with its fiduciary
obligations to stockholders under applicable law. If the
board of directors of Matrix receives a Matrix Transaction
Proposal, then Matrix
31
39
shall immediately inform ITEQ of the terms and conditions of
such proposal and the identity of the person making it and
shall keep ITEQ fully informed of the status and details of any
such Matrix Transaction Proposal and of all steps it is taking
in response to such Matrix Transaction Proposal; provided that
nothing contained in this Subparagraph 4.3.6.1 shall prohibit
Matrix or its board of directors from making such disclosure to
Matrix's stockholders which, in the good faith judgment of
Matrix's board of directors, may be required under applicable
law. For purposes of this Agreement, the term "Superior Matrix
Transaction Proposal" shall mean a bona fide Matrix Transaction
Proposal that the board of directors of Matrix determines in
good faith after consultation with (and based in part on the
advice of) its independent financial advisors to be more
favorable to Matrix's stockholders than the merger contemplated
by this Agreement, is reasonably capable of being financed and
is not subject to any material contingencies relating to
financing;
4.3.6.2. Acceptance of Superior Matrix Transaction
Proposals. If (i) (A) this Agreement is terminated by Matrix
pursuant to Paragraph 6.1.6 hereof, or (B) Matrix shall
violate the covenant set forth in Subparagraph 4.3.6.1 hereof,
or (C) Matrix modifies or withdraws its board of directors'
recommendation in favor of the transactions contemplated by
this Agreement or (ii) during the period beginning on the date
hereof and ending twelve months after the date of termination
of this Agreement, Matrix enters into any written agreement
which provides for Another Matrix Transaction (as defined
below) or Another Matrix Transaction is consummated, in either
case with any third party which, beginning on the date hereof
and ending upon termination of this Agreement, has
communicated to it for the purpose of making a Matrix
Transaction Proposal then, in any such event, Matrix shall pay
to ITEQ within two business days after demand by ITEQ in the
case of the occurrence of any of the events specified in
clause (i) above, and immediately upon the first to occur of
the entering into any written agreement providing for, or the
consummation of, Another Matrix Transaction in the case of
clause (ii) above (by wire transfer of immediately available
funds to an account designated by ITEQ for such purpose), a
fee (the "Break-Up Fee") in an amount equal to $2,500,000.
Matrix agrees that the Break-Up Fee is a reasonable
determination, in light of the uncertainty and difficulty of
ascertaining the exact amount thereof, of the loss that ITEQ
would actually sustain in respect of one of the events
described in this Subparagraph 4.3.6.2. For purposes of this
Subparagraph 4.3.6.2, the term "Another Matrix Transaction"
shall mean any transaction pursuant to which (i) any person,
entity or group (within the meaning of Section 13(d)(3) of the
Exchange Act) (each, a "Third Party") acquires 50% or more of
the outstanding Matrix Common Stock, (ii) a Third Party
acquires 25% or more of the total assets of Matrix taken as a
whole, (iii) a Third Party merges, consolidates or combines in
any other way with Matrix other than in a transaction in which
holders of Matrix Common Stock continue to own at least 75% of
the equity of the surviving corporation, or (iv) Matrix
distributes or transfers to its stockholders, by dividend or
otherwise, assets constituting 5% or more of the
32
40
market value or earning power of Matrix on a consolidated
basis (it being understood that stock of subsidiaries
constitute assets of Matrix for purposes of this Subparagraph
4.3.6.2). Notwithstanding anything contained in this
Agreement to the contrary, ITEQ agrees that if Matrix pays the
Break-Up Fee to ITEQ in accordance with this Subparagraph
4.3.6.2 either because Matrix shall have violated the covenant
set forth in Subparagraph 4.3.6.1 hereof, or under any other
circumstances where ITEQ has been paid the Break-Up Fee by
Matrix prior to initiation by ITEQ of any proceedings to
enforce this Agreement, then following such payment Matrix
shall have no further liability to ITEQ under this Agreement;
4.3.7. No Amendment to Certificate of Incorporation, etc.
Not amend its certificate of incorporation or bylaws or other
organizational documents or merge or consolidate with or into any
other corporation or change in any manner the rights of its capital
stock or the character of its business;
4.3.8. No Issuance, Sale, or Purchase of Securities. From
the date hereof only, not issue or sell, or issue options (other than
options previously granted upon authorization of the compensation
committee of Matrix's board) or rights to subscribe to, or enter into
any contract or commitment to issue or sell (upon conversion or
otherwise), any shares of its capital stock or subdivide or in any way
reclassify any shares of its capital stock, or acquire, or agree to
acquire, any shares of its capital stock; provided, that nothing
herein shall restrict or prohibit the issuance by Matrix of shares of
Matrix Common Stock upon exercise of previously granted stock options.
4.3.9. Prohibition on Dividends. Not declare or pay any
dividend on shares of its capital stock or make any other distribution
of assets to the holders thereof;
4.3.10. Supplemental Financial Statements. Deliver to ITEQ,
within 30 days after the end of each calendar month of Matrix
beginning with November 1997 and through the Effective Date internal
financial statements consisting only of an unaudited consolidated
balance sheet and income statement (collectively, "Matrix Internal
Financials"); in addition Matrix shall deliver to ITEQ, within 45 days
after the end of each fiscal quarter of Matrix beginning November 30,
1997 and through the Effective Date, unaudited consolidated balance
sheets and related unaudited statements of income, retained earnings
and cash flows as of the end of each fiscal quarter of Matrix, and as
of the corresponding fiscal quarter of the previous fiscal year.
Matrix hereby represents and warrants that such quarterly unaudited
consolidated financial statements shall (i) be complete in all
material respects except for the omission of notes and schedules
contained in audited financial statements, (ii) present fairly the
financial condition of Matrix as at the dates indicated and the
results of operations for the respective periods indicated (iii) shall
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as noted therein and
(iv) shall contain all adjustments which Matrix considers necessary
for a fair presentation of its results for each respective quarterly
fiscal period;
33
41
4.3.11. Notice of Material Developments. Promptly furnish to
ITEQ copies of all communications from Matrix to its stockholders and
all Matrix Reports; and
4.3.12. Stockholders' Meeting. Call and hold a meeting of
stockholders within 45 days after the Commission has indicated it has
no further comments on the Proxy Statement for the purpose of
considering and acting upon proposals to approve this Agreement and
the merger contemplated hereby.
4.4. Additional Agreements of ITEQ. ITEQ agrees that from the date
hereof to the Effective Date, it will (and unless otherwise indicated by the
context, since September 30, 1997, it has):
4.4.1. Maintenance of Insurance. Maintain insurance upon
all its properties and with respect to the conduct of its business of
such kinds and in such amounts as presently carried by it, which
insurance may be added to from time to time in its discretion;
provided, that if during the period from the date hereof to and
including the Effective Date any of its property or assets are damaged
or destroyed by fire or other casualty, the obligations of ITEQ and
Matrix under this Agreement shall not be affected thereby (subject,
however, to the provision that the coverage limits of such policies
are adequate in amount to cover the replacement value of such property
or assets and loss of profits during replacement, less commercially
reasonable deductible, if of material significance to the assets or
operations of ITEQ) but it shall promptly notify Matrix in writing
thereof and proceed with the repair or restoration of such property or
assets in such manner and to such extent as may be approved by Matrix,
and upon the Effective Date all proceeds of insurance and claims of
every kind arising as a result of any such damage or destruction shall
remain the property of Surviving Corporation;
4.4.2. No Amendment to Certificate of Incorporation, etc.
Not amend its certificate of incorporation or bylaws or other
organizational documents or merge or consolidate with any other
corporation or change in any manner the rights of its Common Stock or
the character of its business;
4.4.3. No Issuance, Sale, or Purchase of Securities. Not
issue or sell, or issue options (other than (i) options previously
authorized by the compensation committee of ITEQ's board of directors,
(ii) options granted to new personnel upon commencement of employment,
and (iii) options to purchase not more than 300,000 shares of ITEQ
Common Stock intended to be granted to employees of ITEQ in connection
with routine annual stock option grants, in each case under existing
ITEQ employee benefit plans) or rights to subscribe to, or enter into
any contract or commitment to issue or sell (upon conversion or
otherwise), any shares of its capital stock or subdivide or in any way
reclassify any shares of its capital stock, or acquire, or agree to
acquire, any shares of its capital stock; provided, that nothing in
this Paragraph shall restrict or prohibit the issuance by ITEQ of
shares of ITEQ Common Stock under existing employee benefit plans, or
the issuance of up to
34
42
500,000 shares of ITEQ Common Stock in the acquisition of other
businesses in "non-dilutive" (for financial reporting purposes)
transactions, provided that such acquired businesses would not
individually or collectively constitute a "significant subsidiary" of
ITEQ;
4.4.4. Prohibition on Dividends. Not declare or pay any
dividend on shares of its capital stock or make any other distribution
of assets to the holders thereof;
4.4.5. Issuance of ITEQ Common Stock. Take all action it
deems reasonably necessary to register the "issuance" of ITEQ Common
Stock to the stockholders of Matrix in connection with the merger
contemplated by this Agreement under the Securities Act of 1933, as
amended (the "Securities Act"). ITEQ also shall take any action
reasonably required to be taken under state blue sky or securities
laws in connection with the issuance of the ITEQ Common Stock pursuant
to the merger;
4.4.6. Listing of ITEQ Stock. Take such steps as are
required to accomplish, as of the Effective Date, the Notification of
Additional Listing of the shares of ITEQ Common Stock to be issued
pursuant to this Agreement (including those referred to in Paragraph
1.9.8) on the Nasdaq National Market;
4.4.7. Notice of Material Developments. Promptly furnish to
Matrix copies of all communications from ITEQ to its stockholders and
all ITEQ Reports;
4.4.8. Consent of Lenders. Use all reasonable commercial
efforts to obtain the Consent;
4.4.9. Supplemental Financial Statements. Deliver to Matrix,
within 30 days after the end of each calendar month of ITEQ beginning
with November 1997 and through the Effective Date internal financial
statements consisting only of an unaudited consolidated balance sheet
and income statement (collectively, "ITEQ Internal Financials"); in
addition ITEQ shall deliver to Matrix, within 45 days after the end of
each fiscal quarter of ITEQ beginning March 31, 1998 and through the
Effective Date, unaudited consolidated balance sheets and related
unaudited statements of income, retained earnings and cash flows as of
the end of each fiscal quarter of ITEQ, and as of the corresponding
fiscal quarter of the previous fiscal year. ITEQ hereby represents
and warrants that such quarterly unaudited consolidated financial
statements shall (i) be complete in all material respects except for
the omission of notes and schedules contained in audited financial
statements, (ii) present fairly the financial condition of ITEQ as at
the dates indicated and the results of operations for the respective
periods indicated (iii) shall have been prepared in accordance with
generally accepted accounting principles applies on a consistent
basis, except as noted therein and (iv) shall contain all adjustments
which ITEQ considers necessary for a fair presentation of its results
for each respective quarterly fiscal period;
35
43
4.4.10. Stockholders' Meeting. Call and hold a meeting of
stockholders within 45 days after the Commission has indicated it has
no further comments on the Proxy Statement for the purpose of
considering and acting upon proposals to approve this Agreement and
the merger contemplated hereby.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. Conditions Precedent to Obligations of Matrix. The
obligations of Matrix to consummate and effect the merger hereunder shall be
subject to the satisfaction of the following conditions, or to the waiver
thereof by Matrix in the manner contemplated by Paragraph 6.4, before the
Effective Date:
5.1.1. Representations and Warranties of ITEQ True at
Effective Date. The representations and warranties of ITEQ herein
contained shall be, in all material respects, true as of and at the
Effective Date with the same effect as though made at such date,
except as affected by transactions permitted or contemplated by this
Agreement; ITEQ shall have performed and complied with all covenants
required by this Agreement to be performed or complied, in all
material respects, with by ITEQ before the Effective Date; and ITEQ
shall have delivered to Matrix a certificate, dated the Effective Date
and signed by its chairman of the board or its president, and by its
chief financial or accounting officer, and its secretary, to both such
effects.
5.1.2. No Material Litigation. No suit, action, or other
proceeding shall be pending, or to ITEQ's knowledge, threatened,
before any court or governmental agency in which it will be, or it is,
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the merger
contemplated hereby or which might have a Material Adverse Effect on
ITEQ.
5.1.3. Opinion of ITEQ Counsel. Matrix shall have received
a favorable opinion, dated as of the Effective Date, from ▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.P., counsel for ITEQ, in form and substance satisfactory
to Matrix, to the effect that (i) ITEQ has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the State of Delaware; (ii) all corporate proceedings required to
be taken by or on the part of ITEQ to authorize the execution of this
Agreement and the implementation of the merger contemplated hereby
have been taken; (iii) the shares of ITEQ Common Stock which are to be
delivered in accordance with this Agreement will, when issued, be
validly issued, fully paid and nonassessable outstanding securities of
ITEQ; (iv) this Agreement has been duly executed and delivered by
ITEQ; (v) the Registration Statement on Form S-4 (which contains the
Proxy Statement relating to the merger contemplated hereby) has become
effective and no stop order has been issued by the Commission; and
(vi) except as specified by such counsel (such exceptions to be
acceptable to Matrix) such counsel does not know of any material
litigation, proceedings,
36
44
or governmental investigation pending or threatened against or
relating to ITEQ, any of its subsidiaries, or their respective
properties or businesses in which it is sought to restrain, prohibit
or otherwise affect the consummation of the transactions contemplated
by this Agreement. Such opinion also shall cover such other matters
incident to the transactions herein contemplated as Matrix and its
counsel may reasonably request. In rendering such opinion, such
counsel may rely upon (i) certificates of public officials and of
officers of ITEQ as to matters of fact and (ii) the opinion or
opinions of other counsel, which opinions shall be reasonably
satisfactory to Matrix, as to matters other than the DGCL, federal or
Texas law.
5.1.4. Stockholder Approval. At the meetings of
stockholders of Matrix and ITEQ to be held before the Effective Date,
the holders of the requisite stockholder majorities shall have
approved the merger contemplated by this Agreement.
5.1.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, etc. All waiting periods required
by HSR shall have expired with respect to the transactions
contemplated by this Agreement, or early termination with respect
thereto shall have been obtained without the imposition of any
governmental request or order requiring the sale or disposition or
holding separate (through a trust or otherwise) of particular assets
or businesses of ITEQ, its affiliates or any component of Matrix or
other actions as a precondition to the expiration of any waiting
period or the receipt of any necessary governmental approval or
consent. In addition, any approvals required under any state or
foreign laws comparable to HSR shall have been obtained.
5.1.6. Registration; Listing of ITEQ Common Stock. At the
Effective Date (i) the Proxy Statement (including the Form S-4
registration statement, of which it is a part) shall have been
declared effective under the Securities Act and no stop order
suspending the effective date of such registration statement shall be
in effect and no proceedings for such purpose shall be pending or
threatened by the Commission, and (ii) the shares of ITEQ Common Stock
issuable at the Effective Time shall have become eligible for trading
on the Nasdaq National Market.
5.1.7. Consent of Certain Parties in Privity With ITEQ.
ITEQ shall have obtained the Consent; and the holders of any other
material indebtedness of ITEQ, the lessors of any material property
leased by ITEQ, and the other parties to any other material agreements
to which ITEQ is a party shall, when and to the extent necessary in
the reasonable opinion of Matrix, have consented to the merger
contemplated hereby.
5.1.8. Matrix Employee Benefits. ITEQ shall have made
effective provision for the assumption at the Effective Date of all
stock options outstanding under the Matrix Option Plans. In addition,
effective provision shall have been made by ITEQ to terminate or
freeze all other employee benefit plans of Matrix or to merge the same
into the existing ITEQ benefit plans on the Effective Date, after
which time the employees of the former Matrix operations will receive
the employee benefits extended by ITEQ to employees of its
37
45
subsidiaries situated similarly to Matrix. ITEQ will give all Matrix
employees credit for years of service with Matrix in computing
vacation benefits at ITEQ.
5.1.9. Ancillary Matters. Matrix shall have received a
favorable opinion from PW for inclusion in the Proxy Statement as to
the fairness, from a financial point of view, to the Matrix
stockholders of the Merger Consideration, which opinion shall not have
been withdrawn at the Effective Date.
5.1.10 Tax Opinion. Matrix shall have received an opinion,
dated as of the Effective Date, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel
for ITEQ, to the effect that (i) the merger of Matrix into Subcorp as
provided in this Agreement will constitute a reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code; (ii) no
gain or loss will be recognized to Matrix or ITEQ upon such merger;
(iii) no gain or loss will be recognized to any stockholder of Matrix
as a consequence of the merger, except to the extent of any Cash
Consideration received and cash received in lieu of fractional share
interests attributable to any Stock Consideration received; (iv) the
aggregate tax basis of Stock Consideration received by a Matrix
stockholder as a result of the merger will be the same as the
aggregate tax basis of the Matrix Common Stock exchanged for such
shares, reduced by any Cash Consideration received and to cash
received in lieu of the issuance of any ITEQ fractional share
interest; (v) the holding period of any ITEQ Common Stock received in
exchange for Matrix Common Stock pursuant to the merger will include
the holding period of such Matrix Common Stock; (vi) ITEQ's basis and
holding period for all the assets of Matrix acquired pursuant to the
merger will be determined solely with respect to the basis and holding
period of such assets in the hands of Matrix;. and (vii) no gain or
loss will be recognized to holders of Matrix Options upon their
exchange of such options for options to purchase ITEQ Common Stock
pursuant to the merger.
5.2. Conditions Precedent to Obligations of ITEQ. The obligations
of ITEQ to consummate and effect the merger hereunder shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by ITEQ in
the manner contemplated by Paragraph 6.4 before the Effective Date.
5.2.1. Representations and Warranties of Matrix True at
Effective Date. The representations and warranties of Matrix herein
contained shall be, in all material respects, true as of and at the
Effective Date with the same effect as though made at such date,
except as affected by transactions permitted or contemplated by this
Agreement; Matrix shall have performed and complied with all covenants
required by this Agreement to be performed or complied with, in all
material respects, by it before the Effective Date; and Matrix shall
have delivered to ITEQ a certificate, dated the Effective Date and
signed by its chairman of the board or its president, and by its chief
financial or accounting officer, and by its secretary to both such
effects.
38
46
5.2.2. No Material Litigation. No suit, action, or other
proceeding shall be pending, or to Matrix's knowledge, threatened,
before any court or governmental agency in which it will be, or it is,
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the merger
contemplated hereby or which might have a Material Adverse Effect on
Matrix.
5.2.3. Opinion of Matrix's Counsel. ITEQ shall have
received a favorable opinion, dated the Effective Date, from ▇▇▇▇▇▇▇ &
▇▇▇▇▇, L.L.P., counsel to Matrix, in form and substance satisfactory
to ITEQ, to the effect that (i) Matrix has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the State of Delaware; (ii) all corporate proceedings required to
be taken by or on the part of Matrix to authorize the execution of
this Agreement and the implementation of the merger contemplated
hereby have been taken; (iii) this Agreement has been duly executed
and delivered by Matrix; and (iv) except as specified by such counsel
(such exceptions to be acceptable to ITEQ) such counsel does not know
of any material litigation, proceedings or governmental investigation,
pending or threatened against or relating to Matrix or its properties
or businesses in which it is sought to restrain, prohibit or otherwise
affect consummation of the transactions contemplated by this
Agreement. Such opinion shall also cover such other matters incident
to the transactions herein contemplated as ITEQ and its counsel may
reasonably request. In rendering such opinion, such counsel may rely
upon (i) certificates of public officials and of officers of Matrix as
to matters of fact and (ii) on the opinion or opinions of other
counsel, which opinions shall be reasonably satisfactory to ITEQ, as
to matters other than the DGCL, federal or Texas law.
5.2.4. Stockholder Approval. At the meetings of
stockholders of ITEQ and Matrix to be held before the Effective Date,
the holders of the requisite stockholder majorities shall have
approved the merger contemplated by this Agreement.
5.2.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, etc. All waiting periods required
by HSR shall have expired with respect to the transactions
contemplated by this Agreement, or early termination with respect
thereto shall have been obtained without the imposition of any
governmental request or order requiring the sale or disposition or
holding separate (through a trust or otherwise) of particular assets
or businesses of ITEQ, its affiliates or any component of Matrix or
other actions as a precondition to the expiration of any waiting
period or the receipt of any necessary governmental approval or
consent. In addition, any approvals required under any state or
foreign laws comparable to HSR shall have been obtained.
5.2.6. Consent of Certain Parties in Privity with Matrix.
The holders of any material indebtedness of Matrix, the lessors of any
material property leased by Matrix, and the other parties to any other
material agreements to which Matrix is a party shall, when and to the
extent necessary in the reasonable opinion of ITEQ, have consented to
the merger contemplated hereby.
39
47
5.2.7. Consulting Agreements. On or before the date of
execution of this Agreement, ▇▇▇▇ ▇. ▇▇▇▇ and C. ▇▇▇▇▇▇▇ ▇▇▇ shall
have executed consulting agreements with ITEQ in form and substance
satisfactory to ITEQ, such agreements to take effect on the Effective
Date.
5.2.8. Affiliate Letters. All persons who in the reasonable
opinion of ITEQ's counsel are "affiliates" of Matrix within the
meaning of the rules and regulations of the Commission under the
Securities Act and/or Exchange Act shall have executed and delivered
to ITEQ a letter in the form attached hereto as Appendix II
("Affiliate Letter").
5.2.9. Ancillary Matters. ITEQ shall have obtained the
Consent, and it shall have received a favorable opinion from ITEQ's
Advisor for inclusion in the Proxy Statement as to the fairness, from
a financial point of view, to ITEQ of the Merger Consideration, which
opinion shall not have been withdrawn at the Effective Date.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1. Termination. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated and the merger
contemplated hereby abandoned at any time (whether before or after the approval
and adoption thereof by the stockholders of Matrix or ITEQ) before the Effective
Time:
6.1.1. By Mutual Consent. By mutual consent of ITEQ (for
itself and Subcorp) and Matrix.
6.1.2. By ITEQ or Matrix Because of Dissenting Stockholders.
By ITEQ (for itself and Subcorp) or Matrix, if the holders of any
shares of Matrix Common Stock elect to exercise and perfect any right
to dissent under applicable provisions of DGCL in connection with the
merger contemplated by this Agreement.
6.1.3. By ITEQ Because of Conditions Precedent. By ITEQ
(for itself and Subcorp), if there has been a breach by Matrix of any
of its representations, warranties, covenants, or agreements set forth
in this Agreement, or if any representation or warranty of Matrix
shall have become untrue, and which Matrix fails to cure within 15
business days after written notice thereof from ITEQ (except that no
cure period shall be provided for a breach by Matrix which by its
nature cannot be cured).
6.1.4. By ITEQ Because of Material Adverse Change. By ITEQ
(for itself and Subcorp), if there has been a Material Adverse Change
in Matrix.
40
48
6.1.5. By Matrix Because of Conditions Precedent. By
Matrix, if there has been a breach by ITEQ of any of its
representations, warranties, covenants or agreements set forth in this
Agreement, or if any representation or warranty of ITEQ shall have
become untrue, and which ITEQ fails to cure within 15 business days
after written notice thereof from Matrix (except that no cure period
shall be provided for a breach by ITEQ which by its nature cannot be
cured).
6.1.6. By Matrix Due to a Superior Matrix Transaction
Proposal. By Matrix if, before the Effective Date, Matrix's board of
directors shall have withdrawn or modified in a manner adverse to ITEQ
its approval of this Agreement or the merger contemplated hereby under
the terms, conditions and procedures set forth in Subparagraph
4.3.6.2.
6.1.7. By Matrix Because of Material Adverse Change. By
Matrix, if there has been a Material Adverse Change in ITEQ since
September 30, 1997.
6.1.8. By ITEQ or Matrix Because of Legal Proceedings. By
either ITEQ (for itself and Subcorp) or Matrix if any suit, action, or
other proceeding shall be pending or threatened by the federal or a
state government before any court or governmental agency, in which it
is sought to restrain, prohibit, or otherwise affect the consummation
of the merger contemplated hereby.
6.1.9. By ITEQ or Matrix if Merger not Effective by April 30,
1998. By either ITEQ (for itself and Subcorp) or Matrix, if all
conditions to consummation of the merger shall not have been satisfied
or waived on or before April 30, 1998, other than as a result of a
breach of this Agreement by the terminating party.
6.2. Termination by Board of Directors. An election of ITEQ to
terminate this Agreement and abandon the merger as provided in Section 6.1
shall be exercised on behalf of ITEQ (for itself and Subcorp)by its board of
directors. An election of Matrix to terminate this Agreement and abandon the
merger as provided in Section 6.1 shall be exercised on behalf of Matrix by its
board of directors.
6.3. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to and in accordance with the provisions
of Section 6.1 hereof, each party will bear the expenses incurred by it and
this Agreement shall become void and have no effect, without any liability on
the part of any party hereto (or its stockholders or controlling persons or
directors or officers), except (i) the provisions of Paragraph 4.1.6 (second
sentence only), and Subparagraph 4.3.6.2 (last sentence only) shall survive
such termination and abandonment and (ii) except as otherwise provided in
Subparagraph 4.3.6.2, neither party shall be relieved from any liability
arising from the willful breach by such party of any of the representations,
warranties, covenants or agreements as set forth in this Agreement.
41
49
6.4. Waiver of Conditions. Subject to the requirements of
applicable law, any of the terms or conditions of this Agreement may be waived
at any time by the party which is entitled to the benefit thereof, by action
taken by its board of directors.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Exchange of Options. Promptly after the Effective Date, ITEQ
will notify in writing each holder of a Matrix Option of the exchange of the
Matrix Option for an option to purchase ITEQ Common Stock in accordance with
Paragraph 1.9.8 hereof.
7.2. Indemnity.
7.2.1. Indemnification by ITEQ as to Proxy Statement. ITEQ
agrees to indemnify and hold harmless Matrix and its officers and
directors and each person who controls Matrix within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages, or liabilities, joint or
several, to which any of them may become subject under the Securities
Act, the Exchange Act or any other statute or common law, and to
reimburse them for any legal or other expenses incurred by them in
connection with investigating any claims and defending any actions, to
the extent such losses, claims, damages, liabilities, or actions arise
out of or are based upon (i) any false, misleading or untrue statement
or alleged false, misleading or untrue statement of a material fact
insofar as it relates to ITEQ contained in the Proxy Statement in the
form mailed to the stockholders of ITEQ or (ii) the omission or
alleged omission to state in the Proxy Statement (including the
prospectus used in connection with the "issuance" of the Merger
Consideration) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except for
such statements or omissions made in reliance upon and in conformity
with the information furnished to ITEQ in writing by Matrix
specifically for use in connection with the preparation of the Proxy
Statement.
7.2.2. Indemnification of Directors and Officers. ITEQ
shall indemnify and hold harmless each present and former director and
officer of Matrix, determined as of the Effective Date, against any
claims, losses, liabilities, damages, judgments, fines, fees, costs or
expenses, including without limitation attorneys' fees and
disbursements incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative
or investigative, arising out of or pertaining to matters existing or
occurring at or prior to the Effective Date (including, without
limitation, the merger, the preparation, filing and mailing of the
Proxy Statement and the other transactions and actions contemplated by
this Agreement), whether asserted or claimed prior to, at or after the
Effective Date, to the fullest extent that Matrix would have been
permitted, under applicable law, indemnification agreements existing
on the date hereof, the certificate of incorporation or bylaws of
Matrix in effect on the date hereof, to indemnify such person (and
ITEQ shall
42
50
also advance expenses as incurred to the fullest extent permitted
under applicable law provided the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification).
7.2.3. Indemnification Procedure. Any indemnified party
wishing to claim indemnification under this Paragraph 7.2, upon
learning of any such claim, action, suit, proceeding or investigation,
shall promptly notify ITEQ thereof, but the failure to so notify shall
not relieve ITEQ of any liability or obligation it may have to such
indemnified party except, and only to the extent, that such failure
materially prejudices ITEQ. In the event of any such claim, action,
suit, proceeding or investigation (whether arising before, at or after
the Effective Date), ITEQ shall have the right to assume the defense
thereof and ITEQ shall not be liable to such indemnified parties for
any legal expenses of other counsel or any other expenses subsequently
incurred by such indemnified parties in connection with the defense
thereof, except that if ITEQ elects not to assume such defense, or
counsel for the indemnified parties advises that there are bona fide
issues that raise conflicts of interest between ITEQ and indemnified
party, the indemnified parties may retain counsel satisfactory to
them, and ITEQ shall pay all reasonable fees and expenses of such
counsel for the indemnified party promptly as statements therefor are
received. If such indemnity is not available with respect to any
indemnified party, then ITEQ and the indemnified party shall
contribute to the amount payable in such proportion as is appropriate
to reflect relative fault and benefits.
7.2.4. Benefits. The provisions of this Paragraph 7.2 are
intended to be for the benefit of, and shall be enforceable by, each
of the indemnified parties and their respective heirs and legal
representatives. The indemnification provided for herein shall not be
exclusive of any rights to which an indemnified party is entitled,
whether pursuant to law, contract or otherwise.
7.3. Undertaking to File Reports and Cooperate in Rule 144
Transactions. For as long as any stockholders of Matrix who are subject to
Rule 144 or Rule 145 of the Securities Act ("Stockholders") shall continue to
hold any ITEQ Common Stock, ITEQ will undertake, on a reasonable commercial
basis, to timely file all annual, quarterly and other reports required to be
filed by it under Section 13 or 15(d) of the Exchange Act, and the regulations
of the Commission thereunder. In the event of any proposed sale of ITEQ Common
Stock by any of the Stockholders pursuant to Rule 144 under the Securities Act,
ITEQ shall cooperate with such Stockholder so as to enable such sales to be
made in accordance with applicable laws, rules and regulations, the
requirements of ITEQ's transfer agents, and the reasonable requirements of any
broker through which the sales are proposed to be executed. Without limiting
the generality of the foregoing, ITEQ shall, upon request, furnish with respect
to each such sale (i) a written statement certifying that ITEQ has filed all
reports required to be filed by it under the Exchange Act for a period of at
least one year preceding the date of the proposed sale, and, in addition, has
filed the most recent annual report required to be filed by it thereunder; (ii)
an opinion of ITEQ's counsel regarding such matters as ITEQ's transfer agents
or such Stockholder's broker may reasonably desire to confirm; and (iii) upon
surrender of a certificate or certificates for the same or a greater number of
shares of ITEQ Common
43
51
Stock, unlegended certificates representing ITEQ Common Stock in such numbers
and denominations as such Stockholder shall reasonably require for delivery
pursuant to such resales.
7.4. Additional ITEQ Director. Immediately following the Effective
Date, the board of directors of ITEQ will increase the number of directors'
positions comprising the whole board to ten from the present nine and appoint
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ to fill the vacancy thus created.
ARTICLE VIII
MISCELLANEOUS
8.1. Entirety. This Agreement, the exhibits and schedules
attached hereto, and the confidentiality agreements dated November 4, 1997 and
December 2, 1997 between Matrix and ITEQ the entire agreement between the
parties with respect to the subject matter hereof, and all prior agreements
between the parties with respect thereto are hereby superseded in their
entirety.
8.2. Counterparts. Any number of counterparts of this Agreement
may be executed and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
instrument.
8.3. Notices and Waivers. Any notice or waiver to be given to any
party hereto shall be in writing and shall be delivered by courier, sent by
facsimile transmission or first class registered or certified mail, postage
prepaid.
IF TO ITEQ
Addressed to: With a copy to:
ITEQ, Inc. ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 700 Louisiana, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attention: T. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
44
52
IF TO MATRIX
Addressed to: With a copy to:
Matrix Service Company ▇▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, shall be deemed to be received on the third
business day after so mailed, and if delivered by courier or facsimile to such
address, upon delivery during normal business hours on any business day.
8.4. Termination of Representations, Warranties, etc. The
respective representations and warranties contained in Articles II and III
shall expire with, and be terminated and extinguished by, the merger pursuant
to this Agreement at the time of the consummation thereof on the Effective
Date. This Section 8.4 shall have no effect upon any other right or obligation
of the parties in connection with this Agreement or otherwise, whether to be
exercised or performed before or after the Effective Date.
8.5. Table of Contents and Captions. The table of contents and
captions contained in this Agreement are solely for convenient reference and
shall not be deemed to affect the meaning or interpretation of any article,
section, paragraph or subparagraph hereof.
8.6. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the successors and
assigns of the parties hereto, and the employees of Matrix shall be considered
third-party beneficiaries of the covenants and agreements contained in
Sections 1.9.8 and 5.18. As express third-party beneficiaries of Sections 1.9.8
and 5.1.8, the employees of Matrix may independently enforce such provisions
(and only such provisions) against Matrix.
8.7. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
8.8. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.
45
53
8.9. Public Announcements. The parties agree that before the
Effective Date that they shall consult with each other before the making of any
public announcement regarding the existence of this Agreement, the contents
hereof or the transactions contemplated hereby, and to obtain the prior
approval of the other party as to the content of such announcement, which
approval shall not be unreasonably withheld. However, the foregoing shall not
apply to any announcement or written statement which, upon the written advice
of counsel, is required by law to be made, except that the party required to
make such announcement shall, whenever practicable, consult with and solicit
prior approval from such other party concerning the timing and content of such
legally required announcement or statement before it is made.
8.10. Definitions. The following terms are defined herein where
indicated below:
Term Location
---- --------
Affiliate Letter 5.2.8
Agreement Premises
Another Matrix Transaction 4.3.6.2
Applicable Environmental Laws 2.1.14.3
Break-Up Fee 4.3.6.2
Bylaws 1.6.1
Cash Consideration 1.9.2
Cash Election 1.9.9.1
Cash Election Number 1.9.9.4
Cash Election Shares 1.9.9.5
Code 1.4.2
Commission 1.9.7
Consent 3.1.21
DGCL Premises
Effective Date 1.3
Effective Time 1.3
Election Deadline 1.9.9.2
Encumbrance 2.1.4
ERISA 2.1.17
Exchange Act 2.1.5
Exchange Agent 1.9.4
Form of Election 1.9.9.2
HSR 2.1.18
Intellectual Property 2.1.11
Internal Financials 4.3.10
Investment Company Act 2.1.21
IRS 1.9.9.4
ITEQ Introductory paragraph; 3.1.4
ITEQ Advisor 2.1.16
46
54
ITEQ Common Stock Premises
ITEQ Internal Financials 4.4.9
ITEQ Plans 3.1.16
ITEQ Reports 3.1.5
ITEQ Shares 1.9.2
Material Adverse Change 4.2.3
Material Adverse Effect 4.2.3
Matrix Introductory paragraph; 2.1.4
Matrix Common Stock Premises
Matrix Dissenting Shares 1.9.3
Matrix Internal Financials 4.3.10
Matrix Options 1.9.7
Matrix Option Plans 1.9.7
Matrix Plans 2.1.7.1
Matrix Reports 2.1.5
Matrix Transaction Proposal 4.3.6.1
Maximum Cash Election Number 1.9.9.6
Maximum Stock Election Number 1.9.9.4
Merger Consideration 1.9.2
Merging Corporations Introductory paragraph
Minimum Stock Election Number 1.9.9.6
Non-Election 1.9.9.1
Non-Election Shares 1.9.9.1
OSHA 2.1.15
Outstanding 1.9.9.4
Proxy Statement 2.1.20
PW 2.1.16
Reorganization Threshold 1.9.9.5
Restated Certificate of Incorporation 1.4.1
Securities Act 4.4.10
Stock Consideration 1.9.2
Stock Election Number 1.9.9.4
Stockholders 7.3
Subcorp Introductory paragraph
Subcorp Common Stock Premises
Superior Matrix Transaction Proposal 4.3.6.1
Surviving Corporation Introductory paragraph
47
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed in their respective corporate names by their respective duly
authorized representatives on the day and year first above written.
THE PARTIES TO THE MERGER CONTEMPLATED BY THIS AGREEMENT:
ITEQ, INC.
By:
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board
and Chief Executive Officer
ITEQ SUB CORP.
By:
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
MATRIX SERVICE COMPANY
By:
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Chairman of the Board
and Chief Executive Officer
48
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇ of ▇▇▇▇▇▇ Section
BEFORE ME, the undersigned authority, in and for said County and
State, on this day personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board
and Chief Executive Officer of ITEQ, Inc., a Delaware corporation, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed said instrument as the act
and deed of such corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of December,
1997.
-------------------------------------------
Notary Public in and for the State of Texas
(Seal)
My Commission Expires:
State of Texas Section
Section
County of ▇▇▇▇▇▇ Section
BEFORE ME, the undersigned authority, in and for said County and
State, on this day personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President of ITEQ Sub
Corp., a Delaware corporation, known to me to be the person and officer whose
name is subscribed to the foregoing instrument and acknowledged to me that he
executed said instrument as the act and deed of such corporation for the
purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of December,
1997.
-------------------------------------------
Notary Public in and for the State of Texas
(Seal)
My Commission Expires:
49
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇ of ▇▇▇▇▇▇ Section
BEFORE ME, the undersigned authority, in and for said County and
State, on this day personally appeared ▇▇▇▇ ▇. ▇▇▇▇, Chairman of the Board and
Chief Executive Officer of Matrix Service Company, a Delaware corporation,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed said instrument as
the act and deed of such corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of December,
1997.
-------------------------------------------
Notary Public in and for the State of Texas
(Seal)
My Commission Expires:
50