EXHIBIT 2.7
AGREEMENT OF MERGER
BY AND AMONG
▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇
AND
OMNI ENERGY SERVICES CORP.
DATED AS OF OCTOBER 31, 1997
AGREEMENT OF MERGER
BY AND AMONG
▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇
AND
OMNI ENERGY SERVICES CORP.
DATED AS OF OCTOBER 31, 1997
THIS AGREEMENT OF MERGER (the "Agreement") is made and entered into as of
the 31st day of October 1997 by and among OMNI ENERGY SERVICES CORP., a
Louisiana corporation ("Omni"), ▇▇▇▇▇▇▇▇ & ASSOCIATES, INC., a Louisiana
corporation ("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇, in
their capacity as shareholders of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, in his
capacity as a shareholder and president of ▇▇▇▇▇▇▇▇ (Messrs. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
and ▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ being collectively referred to herein as
"Shareholders").
RECITALS
WHEREAS, the Shareholders collectively own 100% of the issued and
outstanding common stock of ▇▇▇▇▇▇▇▇, $1.00 par value per share (the "▇▇▇▇▇▇▇▇
Common Stock");
WHEREAS, ▇▇▇▇▇▇▇▇ is currently engaged in the geophysical survey business,
primarily along the U.S. Gulf Coast (the "Business");
WHEREAS, Omni is currently undertaking the initial public offering (the
"Initial Public Offering") of shares of Omni common stock (the "Omni Common
Stock") pursuant to a Registration Statement on From S-1 filed with the
Securities and Exchange Commission on September 26, 1997 (the "Registration
Statement"); and
WHEREAS, subject to the terms and conditions set forth herein, the parties
hereto have agreed to effect a merger of ▇▇▇▇▇▇▇▇ with and into Omni.
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants, and agreements set forth herein, each of
the parties hereto agree as follows:
SECTION 1
MERGER OF ▇▇▇▇▇▇▇▇ INTO OMNI
1.1 The Merger. At the Effective Time (as hereinafter defined), in
accordance with the terms and subject to the conditions of this Agreement and
the Louisiana Business Corporation Law (the "LBCL"), ▇▇▇▇▇▇▇▇ will merge with
and into Omni (the "Merger"), the separate corporate
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existence of ▇▇▇▇▇▇▇▇ shall cease and Omni shall continue as the surviving
corporation (sometimes referred to herein as the "Surviving Corporation").
1.2 The Closing. (a) Unless this Agreement shall have been terminated
pursuant to the provisions hereof, and subject in each case to the satisfaction
or waiver of the conditions to closing specified in Section 6 hereof, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
at FirstNBC Center, New Orleans, Louisiana, commencing at 9:00 a.m. local time
on the earlier to occur of (i) December 31, 1997, (ii) ten days following
satisfaction or waiver of all conditions to the obligations of the parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective parties will take at the Closing itself) or
(iii) such other date as the Parties may mutually determine (such date being
referred to herein as the "Closing Date").
(b) If all conditions set forth in Section 6 hereof are satisfied or duly
waived, at the Closing, (i) ▇▇▇▇▇▇▇▇ will deliver to Omni the certificates,
instruments, and documents referred to in Section 2.1 below, (ii) Omni will
deliver to ▇▇▇▇▇▇▇▇ the certificates, instruments, and documents referred to in
Section 2.2 below, (iii) Omni and ▇▇▇▇▇▇▇▇ shall execute, deliver and
acknowledge the Certificate of Merger in the form attached hereto as Exhibit 1.2
(the "Certificate of Merger"), and (iv) Omni will deliver to the Shareholders
the consideration to be paid in the Merger as provided in Sections 1.4 and 1.6
hereof.
1.3 The Effective Time; Effect of Merger. (a) The Merger shall be
effective upon the filing of the Certificate of Merger with the Secretary of
State of Louisiana in accordance with the LBCL, or at such other time and date
as is provided in the Certificate of Merger pursuant to the mutual agreements of
▇▇▇▇▇▇▇▇ and Omni (hereinafter referred to as the "Effective Time"). Upon the
Effective Time and by virtue of the Merger, the Surviving Corporation shall
possess all the rights, privileges and franchises possessed by ▇▇▇▇▇▇▇▇ and
shall be responsible for all of the liabilities and obligations of ▇▇▇▇▇▇▇▇ in
the same manner as if the Surviving Corporation had itself incurred such
liabilities or obligations, and the Merger shall have such other effects as may
be specified in the applicable provisions of the LBCL.
(b) Directors and Officers; Articles of Incorporation. After the
Effective Time and until their successors shall have been duly elected or
appointed, the directors and officers of Omni will be the directors and officers
of the Surviving Corporation. The Articles of Incorporation and By-laws of Omni,
as in effect immediately prior to the Effective Time, shall be the articles of
incorporation and by-laws of the Surviving Corporation after the Effective Time
until thereafter duly amended.
(c) Financial Accounting Effect. For financial and tax accounting and
reporting purposes the Merger shall be effective as of October 1, 1997 and the
respective financial, tax and accounting records and statements of each party
hereto shall be prepared as if such Merger were declared effective as of October
1, 1997.
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1.4 Conversion of ▇▇▇▇▇▇▇▇ Shares. Subject to Section 5.7 hereof, at and
as of the Effective Date, by reason of the Merger (a) all of the issued and
outstanding shares of ▇▇▇▇▇▇▇▇ Common Stock shall be converted into the right to
receive that number of shares of Omni Common Stock having an aggregate value of
$539,126.25 based upon the price at which such shares are sold to the public in
the Initial Public Offering and (b) all shares of ▇▇▇▇▇▇▇▇ Common Stock, whether
issued and outstanding or held in treasury, shall be canceled. The shares of
Omni Common Stock issued in connection with the Merger shall be allocated
between the Shareholders as set forth in Schedule 1.4 hereof. Cash will be
issued in lieu of any fractional shares and will be similarly allocated between
the Shareholders.
1.5 Delivery and Exchange of Certificates. On the Closing Date, the
Shareholders shall deliver to Omni all certificates representing outstanding
shares of ▇▇▇▇▇▇▇▇ Common Stock. Upon such delivery, Omni shall deliver to each
Shareholder a certificate representing the number of shares of Omni Common Stock
into which such shares will be converted at the Effective Time, as determined in
Section 1.4 hereof. Until so delivered, each certificate which represented
shares of ▇▇▇▇▇▇▇▇ Common Stock before the Effective Time shall be deemed for
all purposes to represent the number of whole shares of Omni Common Stock into
which such shares shall have been converted in the Merger. Omni may, at its
option, refuse to pay any dividend or other distribution payable after the
Effective Time with respect to Omni Common Stock to the holders of certificates
evidencing undelivered shares of ▇▇▇▇▇▇▇▇ Common Stock. Whether or not a stock
certificate representing shares of ▇▇▇▇▇▇▇▇ Common Stock is delivered as
provided herein, from and after the Effective Time, such certificate shall under
no circumstances evidence, represent or otherwise constitute any stock or
interest in ▇▇▇▇▇▇▇▇ or any person, firm or corporation other than Omni.
1.6 Cash Consideration. In addition to the shares of Omni Common Stock
into which the outstanding shares of ▇▇▇▇▇▇▇▇ Common Stock are convertible as
set forth in Section 1.4 hereof, at the Effective Time Omni will pay the
Shareholders an aggregate of Two Hundred Ten Thousand Eight Hundred Seventy-
Three and 75/100 dollars ($210,873.75) cash together with interest on such
amount at the rate of 8.75 per cent per annum commencing October 1, 1997 and
until such time as such amount and the interest thereon is paid in full, which
amount shall be allocated among the Shareholders as set forth in Schedule 1.4
hereof.
SECTION 2
EVENTS OCCURRING ON THE CLOSING DATE
2.1 Deliveries by ▇▇▇▇▇▇▇▇ and the Shareholders. On the Closing Date,
▇▇▇▇▇▇▇▇ will deliver to Omni the following:
(a) A copy of the Articles of Incorporation of ▇▇▇▇▇▇▇▇, certified by the
Secretary of State of the State of Louisiana as of a date within thirty (30)
days of the Closing Date;
(b) A certificate from the Secretary of State of the State of Louisiana
as of a date within thirty (30) days of the Closing Date as to the good standing
of ▇▇▇▇▇▇▇▇ in such state;
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(c) A certificate of the Secretary of ▇▇▇▇▇▇▇▇, attaching thereto a true
and complete copy of its By-laws in effect on the Closing Date and attesting to
the incumbency of the person executing this Agreement on behalf of ▇▇▇▇▇▇▇▇;
(d) A certificate from the president of ▇▇▇▇▇▇▇▇ and each of the
Shareholders stating that its and their respective representations and
warranties are true, complete and accurate in all material respects at and as of
the Closing Date;
(e) The executed counterpart copies of all consents, approvals,
authorizations and permits, if any, from third parties as referred to in Section
3.25 hereof;
(f) An Employment and Non-Competition Agreement between each of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and Omni, which agreement shall be in
the form set forth in Exhibit 2.1 hereto (the "Employment Agreement");
(g) An opinion of legal counsel to ▇▇▇▇▇▇▇▇ and the Shareholders as to
the due incorporation, existence and good standing of ▇▇▇▇▇▇▇▇, its
qualification to do business in Louisiana and any Material Jurisdictions (as
defined in Section 3.8 hereof), its power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby, and such
other matters as shall be reasonably requested by Omni; and
(h) All other previously undelivered items required to be delivered by
▇▇▇▇▇▇▇▇ at or prior to the Closing Date pursuant to the terms of this
Agreement.
2.2 Deliveries by Omni. On the Closing Date, Omni will deliver the
following to the Shareholders:
(a) The shares of Omni Common Stock as set forth in Section 1.4;
(b) The cash consideration and interest thereon set forth in Section 1.6;
and
(c) The Employment Agreement.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF
▇▇▇▇▇▇▇▇ AND THE SHAREHOLDERS
Each Shareholder, with respect to matters relating to themselves and their
respective ▇▇▇▇▇▇▇▇ Common Stock, represents and warrants to and agrees with
Omni as set forth as follows in Sections 3.1 through 3.5 and the Shareholders,
acting jointly, severally and in solido (i.e., the Louisiana term for jointly
and severally) represent and warrant to and agree with Omni as follows with
respect to the matters set forth in Sections 3.6 through 3.31:
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3.1 Ownership. Each Shareholder is, and at the Effective Time will be,
the record and beneficial owner of the number of shares of ▇▇▇▇▇▇▇▇ Common
Stock, which are represented by the certificates bearing the numbers, shown
opposite their respective names in Schedule 1.4 hereof. Each Shareholder has,
and at the Effective Time, will have good and marketable title to all such
shares and the absolute right to deliver such shares in accordance with the
terms hereof, free and clear of all liens, pledges and encumbrances of any kind.
Each Shareholder has the power, authority and capacity necessary to approve the
Merger, execute and deliver this Agreement and perform its obligations under
this Agreement.
3.2 Pending Actions. As of the date hereof there are, and at the
Effective Time there will be, no actions, suits or proceedings pending or
threatened involving the ownership by the Shareholders of their respective
shares of ▇▇▇▇▇▇▇▇ Common Stock or their ability to approve the Merger pursuant
to this Agreement.
3.3 No Other Agreements. Except for this Agreement and the Employment
Agreement, there are no contracts, agreements, arrangements or understandings
between any Shareholder and Omni relating to ▇▇▇▇▇▇▇▇ or the transactions
contemplated by this Agreement. No Shareholder is a party to any agreement with
respect to the voting, sale or transfer of any of the ▇▇▇▇▇▇▇▇ Common Stock or
the issuance of any additional shares of ▇▇▇▇▇▇▇▇ capital stock or the
redemption of any such stock.
3.4 Restrictions on Resale; Investment Intent.
(a) Each Shareholder is acquiring the Omni Common Stock to be received in
connection with the Merger for investment for their own account and has no
present intention of reselling or otherwise distributing or participating in a
distribution of such stock. Each Shareholder understands that the shares of
Omni Common Stock to be issued in the Merger will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), that such shares will
be "restricted securities" as that term is defined in Rule 144 ("Rule 144")
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act, and that the Shareholder cannot transfer any of such shares
unless they are subsequently registered under the Securities Act and under any
applicable state securities law or are transferred in a transfer that, in the
opinion of counsel satisfactory to Omni, is exempt from such registration. Each
Shareholder further understands that Omni is not obligated by this Agreement to
register such shares under the Securities Act or under any such state laws and
that Omni will, as a condition to the transfer of any such shares, require that
the request for transfer be accompanied by an opinion of counsel, in form and
substance satisfactory to Omni, to the effect that the proposed transfer does
not result in a violation of the Securities Act or any applicable state
securities law, unless such transfer is covered by an effective registration
statement. Each Shareholder understands that such shares of Omni Common Stock
may not be sold publicly in reliance on the exemption from registration under
the Securities Act afforded by Rule 144 unless and until the minimum holding
period and other requirements of Rule 144 have been satisfied.
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(b) Each Shareholder has been represented by competent and experienced
legal counsel in connection with the negotiation and execution of this
Agreement, has been granted the opportunity to make a thorough investigation of
and to obtain information with respect to the affairs of Omni and their
acquisition of Omni Common Stock, and has availed himself or herself of such
opportunity either directly or through its legal counsel and other authorized
representatives.
(c) Each Shareholder has been advised that the shares of Omni Common
Stock issued hereunder have not been and are not being registered under the
Securities Act and that Omni in issuing such shares is relying upon, among other
things, the representations and warranties of the Shareholders contained in this
Section in concluding that such issuance does not require compliance with the
registration provisions of the Securities Act.
(d) Each Shareholder understands and agrees that all certificates
evidencing the shares of Omni Common Stock issued hereunder will bear
restrictive legends in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or any applicable state law, and may not be transferred
without registration under the Act and any such state law or an
opinion of counsel satisfactory to the corporation that
registration is not required.
3.5 Information. The Shareholders acknowledge that (a) they have received
and have reviewed to their satisfaction this Agreement, the Registration
Statement and such additional material information with respect to the Merger
and Omni, if any, as each of them has requested and (b) such information is
sufficient for them to determine objectively whether to approve the Merger and
enter into this Agreement.
3.6 Capitalization and Ownership. The authorized capital stock of
▇▇▇▇▇▇▇▇ consists of 1,000 shares of common stock, $1.00 par value per share, of
which 100 shares are issued and outstanding. All of the issued and outstanding
shares of such common stock have been duly authorized and are validly issued
fully paid and non-assessable. There are no outstanding warrants, options,
rights, calls or other commitments of any nature relating to any share of
capital stock of ▇▇▇▇▇▇▇▇, and there are no outstanding securities or debt
obligations of ▇▇▇▇▇▇▇▇ convertible into shares of capital stock of ▇▇▇▇▇▇▇▇.
Other than the shares of ▇▇▇▇▇▇▇▇ Common Stock listed in Schedule 1.4, there are
no shares of ▇▇▇▇▇▇▇▇ capital stock outstanding.
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3.7 Organization.
(a) ▇▇▇▇▇▇▇▇ is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Louisiana, with the corporate power
and authority to own, lease, and operate its properties and to carry on its
business as now being conducted.
(b) The copy of the Articles of Incorporation and all amendments thereto
of ▇▇▇▇▇▇▇▇, as certified by the Secretary of State of the State of Louisiana,
and the By-laws, as amended to date, of ▇▇▇▇▇▇▇▇, as certified by its Secretary
and delivered to Omni, are true, complete, and correct copies of the respective
Articles of Incorporation and By-laws, as amended and currently in effect, of
▇▇▇▇▇▇▇▇.
3.8 Qualification. ▇▇▇▇▇▇▇▇ is licensed or qualified to do business as a
foreign corporation and is in good standing in the jurisdictions in which it
conducts its business, except where the failure to so qualify would not have a
material adverse effect on the business or financial condition of the Business
taken as a whole (the "Material Jurisdictions").
3.9 Authority. ▇▇▇▇▇▇▇▇ has the corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by ▇▇▇▇▇▇▇▇ of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors and shareholders of ▇▇▇▇▇▇▇▇; no other corporate
proceedings on the part of ▇▇▇▇▇▇▇▇ or any other person or entity, whether
pursuant to the Articles of Incorporation or By-laws of ▇▇▇▇▇▇▇▇ or by law or
otherwise, are necessary to authorize ▇▇▇▇▇▇▇▇ to enter into this Agreement, or
to consummate the transactions contemplated hereby; and this Agreement is the
legal, valid, and binding obligation of ▇▇▇▇▇▇▇▇ (and the Shareholders, as the
case may be). This Agreement has been duly executed and delivered by ▇▇▇▇▇▇▇▇
and the Shareholders and constitutes a valid and binding obligation of ▇▇▇▇▇▇▇▇
and the Shareholders, enforceable against each of them in accordance with its
terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights generally,
(ii) the remedy of specific performance and injunctive relief are subject to
certain equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought, and (iii) rights to indemnification
hereunder may be limited under applicable securities laws.
3.10 No Conflict. Except as set forth in Schedule 3.10 hereof (the items
listed in such Schedule being referred to herein as "Permitted Encumbrances"),
neither the execution and the delivery of this Agreement by ▇▇▇▇▇▇▇▇ and the
Shareholders, nor the consummation of the transactions contemplated hereby do or
will (a) violate, conflict with, or result in a breach of any provisions of, (b)
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, (c) result in the termination of or
accelerate the performance required by, (d) result in the creation of any lien,
security interest, charge, claim, mortgage or encumbrance (collectively referred
to hereafter as "Encumbrances") upon any of ▇▇▇▇▇▇▇▇'▇ properties or assets
under any of the terms, conditions or provisions of ▇▇▇▇▇▇▇▇'▇ Articles of
Incorporation or By-laws or any note, bond, mortgage, indenture, deed of trust,
lease, license, loan agreement or other
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instrument or obligation to or by which ▇▇▇▇▇▇▇▇, the Shareholders or any of its
or their assets are bound, or (e) violate any order, writ, injunction, decree,
statute, rule or regulation of any governmental entity applicable to either
▇▇▇▇▇▇▇▇, the Shareholders or any of their respective assets, except for any
such conflict, breach, termination, acceleration, default or Encumbrance which
would not have a material adverse effect on (i) the business, assets or
financial condition of ▇▇▇▇▇▇▇▇ or (ii) ▇▇▇▇▇▇▇▇'▇ or the Shareholder's ability
to consummate any of the transactions contemplated hereby.
3.11 Financial Statements. ▇▇▇▇▇▇▇▇ has heretofore delivered to Omni
its balance sheet as of September 30 , 1997 (the "Balance Sheet"), and the
related statement of operations for the three months ended September 30 , 1997,
together with its balance sheet as of December 31, 1996 and the related
statement of operations for the year then ended. The financial statements
referred to in the preceding sentence are hereinafter collectively referred to
as the "Financial Statements." Each of the Financial Statements was prepared
from the books and records of ▇▇▇▇▇▇▇▇ in conformity with generally accepted
accounting principles consistently applied, and fairly present the financial
condition and results of operations of ▇▇▇▇▇▇▇▇ for the period and as of the
dates stated therein. Except to the extent reflected in the Financial
Statements, ▇▇▇▇▇▇▇▇ has no liabilities or obligations required to be reflected
in the Financial Statements (or the notes thereto) in accordance with generally
accepted accounting principles other than current liabilities incurred in the
ordinary course of business, consistent with past practice subsequent to
September 30 , 1997.
3.12 Absence of Certain Changes or Events. Since September 30, 1997
(the "Balance Sheet Date"), ▇▇▇▇▇▇▇▇ has operated the Business in the ordinary
course consistent with past practice, and neither ▇▇▇▇▇▇▇▇ nor the Business has:
(a) Suffered any material adverse change in its business or any event or
condition of any character, which individually or in the aggregate, has had or
might reasonably be expected to have a material adverse effect on the business
or financial condition of the Business taken as a whole;
(b) Incurred any obligations or liabilities (absolute, accrued,
contingent, or otherwise) or entered into any transactions, commitments or
agreements other than in the ordinary course of business and consistent with
past practice;
(c) Paid, discharged, or satisfied any claims, obligations, or
liabilities (absolute, accrued, contingent, or otherwise), except the payment,
discharge, or satisfaction in the ordinary course of business and consistent
with past practice of any claims, obligations, and liabilities (i) which are
reflected or reserved against in the Financial Statements or (ii) which were
incurred in the ordinary course of business and consistent with past practice
since the Balance Sheet Date;
(d) Permitted or allowed any of its properties or assets, whether
tangible or intangible, to be subjected to any Encumbrances or other liabilities
and obligations;
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(e) Written off as uncollectible, or canceled or waived, any accounts
receivable or any portion thereof, or any debts or claims, except in the
ordinary course of business and consistent with past practice;
(f) Sold, conveyed, or otherwise disposed of any properties or assets,
except for fair consideration in the ordinary course of business and consistent
with past practice;
(g) Disposed of or permitted to lapse any item of intangible property, or
any license, permit, or other form of authorization to use any intangible
property;
(h) Except for normal increases that are not material and are consistent
with past practice, granted or agreed to grant any increase in the compensation
of any employee (including any such increase pursuant to any bonus, pension,
profit sharing or other plan or commitment), or become a party to or instituted
any new benefit programs for any employee;
(i) Made any change in any method of accounting or accounting practice or
in any Tax (as such term is defined in Section 8.2 of this Agreement) procedures
or elections;
(j) Terminated or suffered a termination of (excluding a termination in
accordance with its terms) or amended, any material contract, agreement,
license, or lease;
(k) Declared, paid, or made, or set aside for payment or making, any
dividend (other than cash dividends) or other distribution in respect of the
capital stock of ▇▇▇▇▇▇▇▇ or, directly or indirectly, redeemed, purchased, or
otherwise acquired any of the capital stock of ▇▇▇▇▇▇▇▇;
(l) Suffered any damage, destruction or casualty loss to the physical
properties of ▇▇▇▇▇▇▇▇ (whether or not covered by insurance), materially and
adversely affecting the business, operations, prospects or financial condition
of ▇▇▇▇▇▇▇▇; or
(m) Agreed, whether in writing or otherwise, or made any arrangement,
whether or not legally binding, to take any action which, if taken prior to the
date hereof, would have served to make false any of the statements contained in
clauses (a) through (l) of this Section 3.12.
3.13 Certain Tax Matters.
(a) All income taxes, unemployment, social security, franchise, real
property, personal property and all other taxes levied, assessed or imposed upon
▇▇▇▇▇▇▇▇ in connection with ▇▇▇▇▇▇▇▇'▇ operation of the Business by the United
States, or any state, or governmental subdivision of either, to the extent due
and payable, have been duly paid to date or are being contested through
appropriate administrative or judicial procedures, and no liability for
deficiencies with respect thereto exists. There are no tax audits pending nor
any outstanding agreements or waivers extending the statutory period of
limitations applicable to any federal, state or local income tax return for any
period in connection with ▇▇▇▇▇▇▇▇'▇ operation of the Business. No tax
deficiencies have been determined nor
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proposed tax assessments charged against ▇▇▇▇▇▇▇▇ (nor is there any basis
therefor) in connection with ▇▇▇▇▇▇▇▇'▇ operation of the Business. ▇▇▇▇▇▇▇▇ has
filed all federal, state, local, sales, franchise, withholding, real and
personal property tax returns required to be filed in connection with ▇▇▇▇▇▇▇▇'▇
operation of the Business. No penalties or other charges are, or will become,
due with respect to the late filing of any return by ▇▇▇▇▇▇▇▇ in connection with
▇▇▇▇▇▇▇▇'▇ operation of the Business. True, correct and complete copies of the
state and local real property and personal property tax returns of ▇▇▇▇▇▇▇▇ in
connection with ▇▇▇▇▇▇▇▇'▇ operation of the Business for ▇▇▇▇▇▇▇▇'▇ last three
fiscal years have been delivered to Purchaser.
(b) ▇▇▇▇▇▇▇▇:
(i) Is not subject to any liens for Taxes on its assets;
(ii) Is not currently under any contractual obligation to pay the
Tax obligations of, or with respect to transactions relating to, any other
person or to indemnify any other person with respect to any Tax;
(iii) Is not subject to any (A) claims, audits, actions, suits,
proceedings, or investigations with respect to any Tax or assessment for which
the Purchaser could be liable, which would be material to the Business, and (B)
requests for rulings in respect of any Tax or any proposed transaction pending
before any Taxing Authority (as defined in Section 8.2 of this Agreement).
(c) Neither of the Shareholders is aware of any facts that could give
rise to any claim, audit, action, suit, proceeding, or investigation with
respect to any material Tax or assessment for which Omni could be liable and
which would be material.
(d) No Tax or assessment will be assessed on or after the Closing Date
against or pertaining to ▇▇▇▇▇▇▇▇ or any assets of the Business for any tax
period ending on or prior to the Effective Date, or for any period ending after
the Effective Date with respect to any portion of such tax period that includes
or is prior to the Effective Date, other than Taxes disclosed in the Financial
Statements.
3.14 Condition of Facilities. The facilities and other property owned
or leased by ▇▇▇▇▇▇▇▇, including equipment, furniture, vehicles and other
tangible personal property owned or held or used in the conduct of the Business
(collectively, the "Assets"), are in good operating condition and repair,
ordinary wear and tear excepted, and are in adequate working order for the
continued conduct of the Business as it is currently conducted. Other than as
disclosed herein, neither of the Shareholders has knowledge of any condition or
defect, in any of the Assets which would materially affect the fair market
value, use or operation of the Business.
10
3.15 Receivables; Payables.
(a) Schedule 3.15(a) sets forth a list of all accounts and notes
receivable accrued in connection with the operation of the Business as of the
Effective Date which have a balance of in excess of $5,000, their respective
balances and an accurate aging thereof. (Such notes and receivables are referred
to collectively as "Receivables"). The Receivables have been earned and recorded
in the ordinary course of business consistent with past practices, and no
Receivables are subject to any counterclaim or offset. None of the Receivables
have been sold, transferred, or otherwise disposed of by ▇▇▇▇▇▇▇▇ and are fully
collectible. Other than those Receivables set forth in Schedule 3.15(a), there
are no accounts or notes receivable by ▇▇▇▇▇▇▇▇ which either individually or in
the aggregate are material to the Business.
(b) Schedule 3.15(b) contains an aging schedule of all accounts and trade
payables of the Business as of the Effective Date which have a balance of in
excess of $5,000, including the dollar amounts thereof (such accounts and trade
payables being referred to as "Accounts Payable"). All such payables of
▇▇▇▇▇▇▇▇ have arisen in the ordinary course of business, and no such payables
are more than 45 days past due, except for those account or trade payables with
respect to which there is an amount disputed in good faith and which are marked
"Disputed" on Schedule 3.15(b). All Accounts Payable are accurately reflected
in the Financial Statements. Other than those Accounts Payable set forth in
Schedule 3.15(b), there are no accounts or trade payables by ▇▇▇▇▇▇▇▇ which
either individually or in the aggregate are material to the Business.
3.16 Title to Properties; Encumbrances.
(a) ▇▇▇▇▇▇▇▇ has good and marketable title to all of the Assets, free and
clear of all Encumbrances, except for Permitted Encumbrances.
(b) Since the Balance Sheet Date,
(i) ▇▇▇▇▇▇▇▇ has incurred no indebtedness or liabilities with respect to
any of the Assets except those listed as Permitted Encumbrances;
(ii) ▇▇▇▇▇▇▇▇ has not received any notice of default under any of its
liabilities, nor, is any such notice pending or do reasons exist for the giving
of such notice.
3.17 Leases.
(a) Schedule 3.17 contains a list of each lease pursuant to which
▇▇▇▇▇▇▇▇ leases real or personal property (collectively, the "Leases").
(b) Each of the Leases is in full force and effect in accordance with its
terms, no Lease has been modified or amended in writing, and ▇▇▇▇▇▇▇▇ has not
received any written notice of any breach or default with respect to a Lease.
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3.18 Patents, Trademarks, and Similar Rights.
(a) (i) ▇▇▇▇▇▇▇▇ has the sole and exclusive right to use all patents,
copyrights, trademarks, trade names, technology, know-how, processes, trade
secrets, inventions, proprietary data, formulae, research and development data,
computer software programs, and other intangible property, and any applications
for the same, owned by ▇▇▇▇▇▇▇▇ or the Shareholders and used in the Business,
and all goodwill associated with such intangible property (collectively, the
"Intangible Property"), and the consummation of the transactions contemplated by
this Agreement will not alter or impair any such rights;
(ii) ▇▇▇▇▇▇▇▇ has the right to use all Intangible Property which is
currently used by ▇▇▇▇▇▇▇▇ in connection with the Business either as provided in
clause (i) above or as licensed or authorized by others, and the consummation of
the transactions contemplated by this Agreement will not alter or impair any
such rights;
(iii) No claims have been asserted by any person or entity for the
use of any such Intangible Property or challenging or questioning the validity
or effectiveness of any such license or agreement, and the Shareholders have no
knowledge of any valid basis for any such claim;
(iv) The use of such Intangible Property by ▇▇▇▇▇▇▇▇ does not
infringe on the rights of any person or entity and no proceedings have been
instituted, are pending, or threatened that challenge the rights of ▇▇▇▇▇▇▇▇ in
respect thereof; and
(v) None of ▇▇▇▇▇▇▇▇'▇ Intangible Property rights, to the best of
the Shareholders' knowledge, are being infringed by the products, activities,
operations, trade names, trademarks, service marks, trade dress rights or
copyrights of any other person or persons and none are subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof.
3.19 Insurance. ▇▇▇▇▇▇▇▇ has heretofore made available for inspection
by Omni a true and complete copy of all policies of fire, liability, workers'
compensation, and other forms of insurance owned or held by ▇▇▇▇▇▇▇▇. All such
policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the Closing Date have been paid, and no
notice of cancellation or termination has been received with respect to any such
policy.
3.20 No Benefit Plans; Absence of PBGC Lien. Except for ▇▇▇▇▇▇▇▇'▇
401(k) plan and its disability and hospitalization plan, which will be continued
or replaced by Omni for at least twelve (12) months after the Effective Date of
this Agreement, neither ▇▇▇▇▇▇▇▇ nor any Affiliate (as defined in Section 8.2 of
this Agreement) maintains any "employee benefit plan" as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations promulgated thereunder, that covers any employee or former
employee of ▇▇▇▇▇▇▇▇. None of the Assets are subject to a lien in favor of the
Pension Benefit Guaranty Corporation.
12
3.21 Documents; Commitments.
(a) The Shareholders have delivered or made available to Omni the
following documents, each of which is true and complete:
(i) Copies of all documents listed in Schedule 3.21(a), which is a
listing of every material contract, agreement, or other commitment, written or
oral, to which ▇▇▇▇▇▇▇▇ is a party or has succeeded to a party by assumption or
assignment or in which it has a beneficial interest. For the purposes of this
Agreement, any contract or agreement shall be deemed material (A) if the
Business taken as a whole is substantially dependent upon it, (B) if it involves
a financial obligation of or benefit to the Business in excess of $100,000, (C)
if the contract is not made in the ordinary course, or (D) if it constitutes a
management contract or employment contract (excluding oral agreements that arise
by operation of law), but excluding quotations given to customers of ▇▇▇▇▇▇▇▇ in
connection with estimates of the cost of future work; and
(ii) Copies of all product bulletins, technical bulletins, or other
advertising or sales materials currently used in connection with the Business.
(b) ▇▇▇▇▇▇▇▇ does not have (i) any outstanding sales contracts or
commitments that are reasonably expected to result in any loss to the Business
upon completion of performance thereof or (ii) any outstanding bids or sales or
service proposals quoting prices that are not reasonably expected to result in a
profit consistent with past practice.
(c) ▇▇▇▇▇▇▇▇ is not restricted by agreement from carrying on the Business
anywhere in the world.
3.22 Labor Matters.
(a) Neither ▇▇▇▇▇▇▇▇ nor any employee employed by ▇▇▇▇▇▇▇▇ is a party to
or is covered by any labor agreement with any collective bargaining
representative representing employees of ▇▇▇▇▇▇▇▇.
(b) ▇▇▇▇▇▇▇▇ is operating in material compliance with all applicable law
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in any unfair labor
practices and no charges or proceedings before the National Labor Relations
Board, or similar agency, exist or are threatened.
(c) There are no unfair labor practice complaints, labor disputes, work
stoppages, or union organization efforts, or threats of the foregoing, directed
against any of the operations of the Business.
(d) No legal proceedings, charges, complaints, or similar actions exist
under any federal, state or local laws affecting the employment relationship
including, but not limited to: (i)
13
antidiscrimination statutes such as Title VII of the Civil Rights Act of 1964,
as amended (or similar state or local laws prohibiting discrimination because of
race, sex, religion, national origin, age and the like); (ii) the Fair Labor
Standards Act or other federal, state or local laws regulating hours of work,
wages, overtime and other working conditions; (iii) requirements imposed by
federal, state or local governmental contracts such as those imposed by
Executive Order 11246; (iv) state laws with respect to tortious employment
conduct, such as slander, false light, invasion of privacy, negligent hiring or
retention, intentional infliction of emotional distress, assault and battery, or
loss of consortium; or (v) the Occupational Safety and Health Act, as amended,
as well as any similar state laws, or other regulations respecting safety in the
workplace; no proceedings, charges, or complaints are threatened under any such
laws or regulations and no facts or circumstances exist which would give rise to
any such proceedings, charges, complaints, or claims, whether valid or not.
(e) With respect to each person employed by ▇▇▇▇▇▇▇▇ since its
incorporation and who actually commenced such employment on or after November 6,
1986, (i) ▇▇▇▇▇▇▇▇ hired such person in compliance with the Immigration Reform
and Control Act of 1986 and the rules and regulations thereunder ("IRCA") and
(ii) ▇▇▇▇▇▇▇▇ has complied with all record keeping and other regulatory
requirements under IRCA.
(f) ▇▇▇▇▇▇▇▇ has not incurred any liability or obligation under the
Worker Adjustment and Retraining Notification Act or similar state laws.
▇▇▇▇▇▇▇▇ has not laid off more than ten percent (10%) of its employees at any
single site of employment in any ninety (90) day period during the twelve (12)
month period ending as of the Closing Date. It shall be the obligation of the
Shareholders to provide any notice required by said Act by reason of the
provisions, execution or operation of this Agreement.
(g) To the best of the Shareholders' knowledge, ▇▇▇▇▇▇▇▇ is in full
compliance with the provisions of the Americans with Disabilities Act (the
"ADA") as of the Closing Date.
3.23 Personnel.
(a) Schedule 3.23 sets forth (i) the name and current annual salary (or
rate, if an hourly or day rate employee) and other compensation (including,
without limitation, normal bonus, profit sharing and other compensation) now
payable by ▇▇▇▇▇▇▇▇ to each employee, (ii) any increase to become effective
after the date of this Agreement in the total compensation or rate of total
compensation payable by ▇▇▇▇▇▇▇▇ to each such person, (iii) all presently
outstanding loans and advances (other than routine travel advances to be repaid
or formally accounted for within sixty (60) days) made by ▇▇▇▇▇▇▇▇ to, or made
to ▇▇▇▇▇▇▇▇ by, any director, officer or employee, (iv) all other transactions
between ▇▇▇▇▇▇▇▇ and any director, officer or employee of ▇▇▇▇▇▇▇▇ since March
31, 1997, and (v) all accrued but unpaid vacation pay and any other compensation
owing to any officer or employee which is not disclosed on the Financial
Statements. Full payment has been made of all compensation and other employee
benefit amounts which ▇▇▇▇▇▇▇▇ was required to have paid to each employee
(including all accrued vacation pay) on or prior to the Closing Date (excluding
any amounts not yet due).
14
(b) ▇▇▇▇▇▇▇▇'▇ relationship with its respective employees is good and the
Shareholders have no knowledge of any facts which would indicate that ▇▇▇▇▇▇▇▇'▇
employees will not continue in its employ following the Closing.
3.24 No Breach.
(a) Each Permit, contract, agreement, deed of trust, lease, policy,
license, plan, commitment, arrangement, and understanding (whether evidenced by
a written document or otherwise) referred to in this Agreement or in any
Schedule or Exhibit hereto or which is otherwise material to the Business, under
which ▇▇▇▇▇▇▇▇ has any right, interest, or obligation (i) is in full force and
effect and (ii) is not subject to any threatened amendment, cancellation, or
outstanding dispute.
(b) ▇▇▇▇▇▇▇▇ is not in breach of, and there does not exist any default or
event (including the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby) which, with the giving of
notice or the lapse of time or both, would become a breach or default, and there
is no basis for any valid claim of a default in any respect with regard to any
contracts or agreements which may be affected by the execution of this
Agreement.
3.25 Consents, Permits, Etc. Except as set forth in Schedule 3.25, no
consent, approval, authorization, or permit from any person or entity is
necessary to the consummation of the transactions contemplated by this
Agreement. All such consents, permits, approvals and authorizations listed in
Schedule 3.25 have been either obtained or waived.
3.26 Litigation. There is no litigation, proceeding, arbitration,
administrative or other proceeding or audit, inquiry or investigation pending,
or controversy (an "Action") pending, or to the best knowledge of the
Shareholders, threatened by or against, or involving ▇▇▇▇▇▇▇▇ or any directors,
officers, or employees thereof in their capacity as such or that question or
challenge the validity of this Agreement, or any action taken or to be taken by
the Shareholders pursuant to this Agreement or in connection with the
transactions contemplated hereby, and to the knowledge of the Shareholders,
there is no valid basis for any such Action. No such Action would, if adversely
decided, have a material adverse effect on the Business taken as a whole or,
after the Closing Date, on the ability of Omni to conduct the Business.
3.27 Compliance With Applicable Law; Adverse Restrictions. The
operations of ▇▇▇▇▇▇▇▇ are being conducted in material compliance with (a) all
applicable Permits, licenses, orders, writs, injunctions, judgments, decrees, or
awards of all courts and governmental and regulatory authorities, and (b) to the
knowledge of the Shareholders, all laws (statutory or otherwise), ordinances,
rules, regulations, by-laws, and codes of all governmental and regulatory
authorities, whether federal, state, or local (individually, a "Law" and
collectively, "Laws") that are applicable to the Assets or the Business
(including, without limitation, those related to public or occupational safety,
pollution and protection of the environment, and hazardous or other waste
disposal). ▇▇▇▇▇▇▇▇ has not received any written notification of any asserted
present failure to comply with any Law, except for failures
15
that in the aggregate are not and were not material to the conduct of the
Business as a whole and which ▇▇▇▇▇▇▇▇ has taken steps to correct or contest in
good faith.
3.28 Customers and Suppliers.
(a) Since September 30, 1997, there has not been any adverse change in
the business relationship of ▇▇▇▇▇▇▇▇ with any customer, distributor, or
supplier that is material to the business or financial condition of the Business
taken as a whole. To the knowledge of the Shareholders, no customer or supplier
of ▇▇▇▇▇▇▇▇ will cease to do business with the Business after the consummation
of the transactions contemplated hereby, which cessation would have a material
adverse effect on the business, operations or financial condition of the
Business. ▇▇▇▇▇▇▇▇ has not experienced any difficulties in obtaining any
inventory, supplies, equipment or other items necessary to the operation of its
business, and, to the knowledge of the Shareholders, no such shortage of supply
of inventory, supplies, equipment or other items is threatened or pending.
▇▇▇▇▇▇▇▇ is not required to provide any bonding or other financial security
arrangements in any material amount in connection with any transactions with any
of its customers or suppliers.
(b) No shareholder, officer, director or employee of ▇▇▇▇▇▇▇▇, nor any
spouse or child of any of them, has any direct or indirect interest in any
competitor, supplier or customer of ▇▇▇▇▇▇▇▇ or in any person from whom or to
whom ▇▇▇▇▇▇▇▇ leases any real or personal property, or in any other person with
whom ▇▇▇▇▇▇▇▇ is doing business.
3.29 Governmental Approvals and Consents. No approval, authorization,
consent, or other order or action by the Shareholders or Omni before any court,
administrative agency, or other governmental authority is required for the
execution and delivery by the Shareholders of this Agreement or the consummation
by the Shareholders of the transactions contemplated hereby.
3.30 Environmental Laws and Regulations.
(a)(i) The ownership and operations of the "Subject Property," as defined
below, and any use, storage, treatment, disposal, or transportation of
"Hazardous Substances," as defined below, that has occurred in or on the Subject
Property while owned by the Shareholders but prior to the date of this Agreement
have been in compliance with "Environmental Requirements," as defined below;
(ii) during the ownership, occupancy and operation of the Subject Property by
▇▇▇▇▇▇▇▇, or, to the knowledge of the Shareholders, prior to ▇▇▇▇▇▇▇▇'▇
ownership, occupancy or operation, no release, leak, discharge, spill, disposal,
or emission of Hazardous Substances has occurred in, on, or under the Subject
Property in a quantity or manner that violates or requires further investigation
or remediation under Environmental Requirements; (iii) to the best of the
Shareholders' knowledge, the Subject Property is free of Hazardous Substances as
of the date of this Agreement; (iv) there is no pending or threatened litigation
or administrative investigation or proceeding concerning the Subject Property
involving Hazardous Substances or Environmental Requirements; and (v) to the
best of the Shareholders' knowledge, there is no ACM (as defined below), within
the Subject
16
Property, whether friable or non-friable, and there are no above-ground or
underground storage tank systems ("Tank Systems") located at the Subject
Property.
(b) Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Environmental Requirements" means all laws, statutes, rules,
regulations, ordinances, guidance documents, judgments, decrees, orders,
agreements and other restrictions and requirements (whether now or
hereafter in effect) of any governmental authority, including, without
limitation, federal, state, and local authorities, relating to the
regulation or protection of human health and safety, natural resources,
conservation, the environment, or the storage, treatment, disposal,
transportation, handling, or other management of industrial or solid waste,
hazardous waste, hazardous or toxic substances or chemicals, or pollutants.
"Hazardous Substance" means (i) any "hazardous substance" as defined
in 101(14) of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended from time to time (42 U.S.C. (S)(S) 9601
et seq.)("CERCLA") or any regulations promulgated thereunder; (ii)
petroleum and petroleum by-products; (iii) asbestos or asbestos-containing
material ("ACM"); or (iv) any additional substances or materials which have
been or are currently classified or considered to be pollutants, hazardous
or toxic under Environmental Requirements.
"Subject Property"means any and all immovable property owned by,
leased by or used by ▇▇▇▇▇▇▇▇ in connection with the Business or otherwise
at any time during its corporate existence.
3.31 Effectiveness of Representations and Warranties. All of the
representations and warranties of ▇▇▇▇▇▇▇▇ and the Shareholders in this
Agreement shall be true in all material respects on the Closing Date and shall
be deemed to have been made again by each of them on and as of the Closing Date.
SECTION 4.
PRE-CLOSING COVENANTS
4.1 Access to Properties and Records. Until the Effective Time, ▇▇▇▇▇▇▇▇
and the each of the Shareholders shall allow Omni and its authorized
representatives full access, during normal business hours and on reasonable
notice, to all of ▇▇▇▇▇▇▇▇'▇ plants, properties, offices, vehicles, equipment,
inventory and other assets, documents, files, books and records, in order to
allow Omni a full opportunity to make such investigation and inspection as they
desire of the Business and assets. ▇▇▇▇▇▇▇▇ and the Shareholders shall further
use their best efforts to cause the employees, counsel and regular independent
certified public accountants of ▇▇▇▇▇▇▇▇ to be available upon reasonable notice
to answer questions of Omni's representatives concerning the business and
affairs of ▇▇▇▇▇▇▇▇, and
17
shall further use their best efforts to cause them to make available all
relevant books and records in connection with such inspection and examination,
including without limitation work papers for all audits and reviews of financial
statements of ▇▇▇▇▇▇▇▇.
4.2 Conduct of Business. From and after the date of this Agreement and
until the Closing Date, each of ▇▇▇▇▇▇▇▇ and Omni shall conduct their respective
businesses in the ordinary course and consistently with past practice, except as
expressly required or otherwise permitted by this Agreement, and shall not take
or permit any action which would cause any of the representations made in
Section 3 not to be true and correct on the Closing Date.
4.5 Public Statements. Prior to the Effective Time, none of the parties
to this Agreement shall, and each party shall use its best efforts so that none
of its advisors, officers, directors or employees shall, except with the prior
written consent of the other parties, publicize, announce or describe to any
third person, except their respective advisors and employees, the execution or
terms of this Agreement, the parties hereto or the transactions contemplated
hereby, except as required by law or as required pursuant to this Agreement to
obtain the consent of such third person; provided, in any case, that Omni may
make such disclosures and announcements as may be necessary or advisable under
applicable securities laws.
4.6 No Solicitation. The Shareholders and ▇▇▇▇▇▇▇▇ will not, prior to the
Effective Time or the termination of this Agreement pursuant to Section 7, (nor
will they permit any of their affiliates or any of ▇▇▇▇▇▇▇▇'▇ officers,
directors or agents to) directly or indirectly solicit or participate or engage
in or initiate any negotiations or discussions, or enter into or authorize any
agreement or agreements in principle, or announce any intention to do any of the
foregoing, with respect to any offer or proposal to acquire all or any
significant part of ▇▇▇▇▇▇▇▇'▇ business and properties or any of its capital
stock whether by merger, purchase of assets, purchase of stock or otherwise. The
Shareholders and ▇▇▇▇▇▇▇▇ will notify Omni promptly upon receipt of any inquiry,
offer or other communication from any third party regarding any such activities.
4.7 No Stock Splits or Dividends. ▇▇▇▇▇▇▇▇ shall not declare or pay any
dividend on or permit any reclassification or recapitalization with respect to
shares of ▇▇▇▇▇▇▇▇ capital stock, or the establishment of a record date for any
of the foregoing, to occur during the period between the date of this Agreement
and the Effective Time.
4.8 Notification as to Representations. ▇▇▇▇▇▇▇▇ and the Shareholders
will promptly disclose in writing to the other any information contained in its
representations and warranties or on the schedules related thereto that, because
of an event occurring after the date hereof, is incomplete or no longer correct.
Such disclosure will not be deemed to modify the representations and warranties
of such party or such schedule, as the case may be.
18
SECTION 5
ADDITIONAL AGREEMENTS
5.1 Legal Requirements to Merger. Subject to the conditions set
forth in Section 6 and to the other terms and provisions of this Agreement, each
of the parties to this Agreement agrees to take, or cause to be taken, all
reasonable actions necessary to comply promptly with all legal requirements
applicable to it each of them with respect to the Merger and will promptly
cooperate with and furnish information to each other in connection with any such
requirements imposed upon any of them in connection with the Merger. Each of
▇▇▇▇▇▇▇▇, the Shareholders and Omni will take all reasonable actions necessary
to obtain, and will cooperate with each other in obtaining, any consent,
authorization, order or approval of, or any exemption by, any governmental
entity or other public or private party, required to be obtained or made by it
in connection with the Merger or the taking or any action contemplated by this
Agreement.
5.2 Further Assurances. After the Effective Time, each of ▇▇▇▇▇▇▇▇,
the Shareholders and Omni will, at their own expense, take all appropriate
action and execute all documents, instruments or conveyances which may be
reasonably necessary to carry out the provisions of this Agreement.
5.3 Expenses. Except as otherwise provided herein, each party will
pay all costs and expenses incurred by it in connection with this Agreement and
the transactions contemplated hereby.
5.4 Confidentiality. Until the Effective Time and subsequent to the
termination of this Agreement pursuant to Section 7, each of the parties will
keep confidential and will not disclose to any third party any information
obtained by it in connection with this Agreement except (a) that information may
be disclosed by the parties to their advisors in connection with the
negotiation of and the activities conducted pursuant to this Agreement, (b) to
the extent that such information is or becomes generally available to the public
through no act or omission of Omni in violation of this Agreement and (c) to the
extent permitted by Section 4.5 hereof. In the event this Agreement is
terminated, each of the parties hereto agree that they shall not use any
information obtained in connection with this Agreement for their benefit or to
the detriment of any other party hereto.
5.5 Employment Agreements. At the Closing, each of Omni and ▇▇.
▇▇▇▇▇▇▇▇ will execute and deliver the Employment Agreement.
5.6 Corporate Name. After the Effective time, the Surviving
Corporation shall have the right to use the corporate name "▇▇▇▇▇▇▇▇ &
Associates, Inc." and any derivatives or combinations thereof and none of the
Shareholders shall use or attempt to use such name or any derivative or
combination thereof as the corporate name of a corporation, partnership or other
entity, an assumed name, a trade name or in any other manner.
5.7 Alternative Purchase Consideration. The parties hereto agree
that, notwithstanding Section 1.4 and Schedule 1.4 hereof regarding the issuance
of Omni Common Stock to the Shareholders, in the event the Initial Public
Offering shall not have closed by December 31, 1997,
19
the Merger shall be completed as an all cash transaction with Omni paying the
Shareholders an aggregate of $750,000.00, to be distributed among them as set
forth beside their respective names under the "Total" column of Schedule 1.4
hereof.
SECTION 6
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction or, where permissible, waiver by such party of the following
conditions at or prior to the Effective Time:
(a) No statute, rule, regulation, executive order, decree, preliminary
or permanent injunction or restraining order shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or other
governmental entity which prohibits or restricts the consummation of the Merger
and no action, suit, claim or proceeding by a state or federal governmental
entity before any court or other governmental entity shall have been commenced
and be pending which seeks to prohibit or restrict the consummation of the
Merger, other than actions, suits, claims and proceedings which, in the
reasonable opinion of counsel to the parties hereto, are unlikely to result in
an adverse judgment; provided, however, that before any determination is made to
the effect that this condition has not been satisfied, ▇▇▇▇▇▇▇▇ and Omni shall
each use all reasonable efforts and take such actions as may be reasonably
necessary, at its own expense, to have such order, stay, judgment or decree
lifted or dismissed and any such suit, action or proceeding dismissed or
terminated.
(b) All filings with and notices to and all consents and waivers from
the third parties listed in Schedule 3.25 shall have been made or obtained.
6.2 Conditions to Obligations of Omni. The obligations of Omni to
effect the Merger are subject to the satisfaction of the following conditions
unless waived by Omni:
(a) The Registration Statement shall have been declared effective and
the Initial Public Offering shall have been closed.
(b) The representations and warranties of the Shareholders set forth
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as of
the Closing Date, except as otherwise contemplated by this Agreement, and
▇▇▇▇▇▇▇▇ and the Shareholders shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to
the Closing Date.
(c) All consents and approvals of governmental entities or third
parties necessary for consummation of the Merger by the parties shall have been
obtained, other than those which, if not obtained, would not in Omni's judgment
have a material adverse effect on any party's ability to consummate any of the
transactions contemplated hereby or on the Business and properties of
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▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ shall have used its best efforts to obtain all necessary
permits, authorizations, consents and approvals required by such governmental
entities prior to the Closing Date.
(d) Omni shall have had a full opportunity to conduct inspections of
the operating assets and books and records of ▇▇▇▇▇▇▇▇.
(e) ▇▇▇▇▇▇▇▇ shall have provided Omni certified copies of its Articles
of Incorporation and By-laws and certificates of existence, good standing and
qualification to do business as a foreign corporation, certified by the
appropriate state authorities in ▇▇▇▇▇▇▇▇'▇ state of incorporation.
(f) Omni shall have received a certificate of a duly authorized
officer of ▇▇▇▇▇▇▇▇, dated the Closing Date, certifying as to the incumbency of
any person executing this Agreement or any certificate or other document
delivered in connection with this Agreement and certifying as to such other
matter as Omni shall reasonably request.
(g) Omni will be reasonably satisfied, and shall have received a
certificate of each of the Shareholders and of the president of ▇▇▇▇▇▇▇▇ that
the condition specified in Section 6.2(b) has been fulfilled.
(h) Omni will be reasonably satisfied that the Merger will be treated
as a pooling of interests for financial reporting purposes.
6.3 Conditions to Obligations of ▇▇▇▇▇▇▇▇ and Shareholders. The
obligations of ▇▇▇▇▇▇▇▇ and the Shareholders to effect the Merger are subject to
the satisfaction for the following conditions, unless waived by ▇▇▇▇▇▇▇▇ and
each of the Shareholders:
(a) All consents and approvals of governmental entities or third
parties necessary for consummation of the Merger by the parties, shall have been
obtained, other than those which, if not obtained, would not have a material
adverse effect on any party's ability to consummate any of the transactions
contemplated hereby. Omni shall have used its best efforts to obtain all
necessary permits, authorizations, consents and approvals required by such
governmental entities prior to the Closing Date.
(b) ▇▇▇▇▇▇▇▇ and the Shareholders shall have received a certificate of
a duly authorized officer of Omni, dated the Closing Date, and certifying as to
the incumbency of any person executing this Agreement or any certificate or
other document delivered in connection with this Agreement and certifying such
other matters as ▇▇▇▇▇▇▇▇ or the Shareholders shall reasonably request.
SECTION 7
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time:
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(a) by mutual consent of ▇▇▇▇▇▇▇▇ and Omni;
(b) by ▇▇▇▇▇▇▇▇ or Omni, if any permanent injunction or other order of
a court or other competent governmental entity preventing the consummation of
the Merger shall have become final and nonappealable; or
(c) by ▇▇▇▇▇▇▇▇, Omni or any Shareholder if the Merger shall not have
been consummated on or before December 31, 1997; provided, that the right to
terminate this Agreement under this Section 7.1 shall not be available to any
party whose breach of its representations and warranties in this Agreement or
whose failure to perform any of its covenants and agreements under this
Agreement has resulted in the failure of the Merger to occur on or before such
date.
7.2 Effect of Termination. In the event of a termination of this
Agreement by either ▇▇▇▇▇▇▇▇ or Omni as provided in Section 7.1, this Agreement
shall forthwith become void and there shall be no liability or obligation under
any provisions hereof on the part of ▇▇▇▇▇▇▇▇, Omni or their respective
officers, directors or stockholders, except (a) pursuant to the covenants and
agreements contained in Section 5.3 and Section 5.4 and this Section 7.2 and (b)
to the extent that such termination results from the willful material breach by
a party hereto of any of its representations, warranties, covenants or
agreements set forth in this Agreement, in which case the non-breaching party
shall have a right to recover its damages caused thereby.
7.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
7.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may, in their respective sole discretion and to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto; (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto; and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed by or on behalf of such party.
SECTION 8
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1 Survival; Indemnification.
(a) The representations and warranties of the parties hereto contained
herein or in any certificate or other writing delivered pursuant hereto or in
connection herewith shall survive the Closing Date and shall extend without
limit as to time. The covenants and agreements of the parties hereto contained
herein or in any certificate or other writing delivered pursuant hereto or in
connection herewith shall survive the Closing Date in accordance with their
terms.
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(b) The Shareholders and their successors and assigns (each an
"Indemnitor"), jointly and severally, hereby agree to indemnify each Indemnitee
and Indemnitee Affiliate (as each is defined in Section 8.2 of this Agreement)
against and agree to hold it harmless from any and all damage, loss, liability,
and expense (including, without limitation, reasonable expenses of investigation
and attorney's fees and expenses in connection with any action, suit,
proceeding, claim, investigation, or other loss) (a "Loss") incurred or suffered
by such Indemnitee or Indemnitee Affiliate arising out of or relating to:
(i) Any breach of any covenant or agreement or any inaccuracy or
omission in any representation or warranty made by the Shareholders pursuant to
this Agreement;
(ii) Any taxes attributable to any Pre-Closing
Tax Period; and
(iii) U.S. or any state or local Environmental Laws and relating to
conditions, events, actions, violations, obligations, or circumstances that
exist in whole or part prior to the Closing Date.
(c) Omni (an "Indemnitor") hereby agrees to indemnify each Indemnitee
and Indemnitee Affiliate against and hold each of them harmless from any and all
Loss incurred or suffered by any such Indemnitee or Indemnitee Affiliate arising
out of or relating to any breach of any covenant or agreement made by it under
this Agreement.
8.2 Definitions. For the purpose of this Agreement, the following terms
have the following meanings:
(a) "Affiliate" means, with respect to any person, any person directly
or indirectly controlling, controlled by, or under common control with such
other person.
(b) "Indemnitee" means, with respect to the Shareholders, Omni and its
Affiliates and, with respect to Omni, the Shareholders and each of their
respective Affiliates.
(c) "Indemnitee Affiliate" means the employees, successors, and assigns
of each Indemnitee and, with respect to each corporate Indemnitee, its
directors, officers, and shareholders.
(d) "Pre-Closing Tax Period" means any tax period ending on or before
the close of business on the Effective Date, or, in the case of any tax period
which includes, but does not end on, the Effective Date, the portion of such
period up to and including the Effective Date.
(e) "Tax" or "Taxes" shall mean (i) any net income, alternative or
add-on minimum tax, gross income, gross receipts, sales, use, ad valorem,
franchise, capital, paid-up capital, profits, greenmail, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty, or other tax, governmental
fee, or other like assessment or charge of any kind whatsoever, together with
any interest or any
23
penalty, addition to tax or additional amount imposed by any governmental
authority (a "Taxing Authority") responsible for the imposition of any such tax
(domestic or foreign), and (ii) liability for the payment of any amounts of the
type described in (i) as a result of any express obligations to indemnify any
other person.
8.3 Control of Litigation.
(a) The Indemnitees and Indemnitee Affiliates agree to give prompt
notice to the Indemnitors of the assertion of any claim, or the commencement of
any suit, action, or proceeding in respect of which indemnity may be sought
under Section 8.1(b) or Section 8.1 (c) of this Agreement and of any Loss which
any such Indemnitee deems to be within the ambit of Section 8.1(b) or Section
8.1(c) of this Agreement (specifying with reasonable particularity the basis
therefor) and will give the Indemnitors such information with respect thereto as
the Indemnitors may reasonably request. The Indemnitors may, at their own
expense, participate in and, upon notice to such Indemnitee, assume the defense
of any such suit, action, or proceeding; provided that the Indemnitors' counsel
is reasonably satisfactory to such Indemnitee, the Indemnitors shall thereafter
consult with such Indemnitee upon such Indemnitee's reasonable request for such
consultation from time to time with respect to such suit, action, or proceeding,
and the Indemnitors shall not, without such Indemnitee's consent, which consent
shall not be unreasonably withheld, settle or compromise any such suit, action,
or claim. If the Indemnitors assume such defense, such Indemnitees shall have
the right (but not the duty) to participate in the defense thereof and to employ
counsel, at their own expense, separate from the counsel employed by the
Indemnitors. For any period during which the Indemnitors have not assumed the
defense thereof, the Indemnitors shall be liable for the fees and expenses of
counsel employed by any Indemnitee; provided, however, that the Indemnitors
shall not be liable for the fees or expenses of more than one counsel employed
by any Indemnitee in any jurisdiction for all Indemnitees. If the Indemnitees
assume the defense thereof, the Indemnitees shall thereafter consult with the
Indemnitors upon the Indemnitors' reasonable request for such consultation from
time to time with respect to such suit, action, or proceeding and the
Indemnitees shall not, without the Indemnitors' consent, which consent shall not
be unreasonably withheld, settle or compromise any such suit, action. or claim.
Whether or not the Indemnitors choose to defend or prosecute any claim, all of
the parties hereto shall cooperate in the defense or prosecution thereof.
(b) No investigation by any Indemnitee or Indemnitee Affiliate prior
to the Closing Date shall relieve any Indemnitor of any liability hereunder.
8.4 Cooperation on Tax Matters. ▇▇▇▇▇▇▇▇ and Omni shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with any audit, litigation, or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon the other party's
request) the provision of records and information which are reasonably relevant
to any such audit, litigation, or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Omni and ▇▇▇▇▇▇▇▇ agree (a) to
retain all books and records which are relevant to the determination of the Tax
liabilities pertinent to the Assets relating to any Pre-Closing Tax Period until
the expiration of the
24
applicable statute of limitations and to abide by all record retention
agreements entered into with any Taxing Authority, and (b) to give the other
party reasonable written notice prior to destroying or discarding any such books
and records and, if the other party so requests, Omni or ▇▇▇▇▇▇▇▇, as the case
may be, shall allow the other party to take possession of such books and
records.
SECTION 9
MISCELLANEOUS PROVISIONS
9.1 Amendment and Modification. This Agreement may be amended,
modified, or supplemented only by written agreement of the parties hereto.
9.2 Waiver of Compliance; Consents. Any failure of a party to comply
with any obligation, covenant, agreement, or condition herein may be waived by
the other party; provided, however, that any such waiver may be made only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 9.2, with appropriate notice in
accordance with Section 9.7 of this Agreement.
9.3 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Any party may assign any of its
rights hereunder, but no such assignment shall relieve it of its obligations
hereunder. Nothing in this Agreement, expressed or implied, is intended or
shall be construed to confer upon any person other than the parties, any
successors and permitted assigns, any rights, remedy, or claim under or by
reason of this Agreement or any provisions herein contained.
9.4 Expenses, Transfer Taxes, Etc. Whether or not the transactions
contemplated by this Agreement shall be consummated, all fees and expenses
(including all fees of counsel, actuaries, accountants and other experts)
incurred by any party in connection with the negotiation and execution of this
Agreement shall be borne by such party.
9.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Louisiana (without regard to its
conflicts of law doctrines).
9.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and shall become a binding
Agreement when one or more of the counterparts have been signed by each of the
parties and delivered to the other party.
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9.7 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered by hand or
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
If to ▇▇▇▇▇▇▇▇ or the Shareholders:
▇▇▇▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Omni:
OMNI Energy Services Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President
9.8 Specific Performance. Each of the parties acknowledge that money
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
9.9 Headings. The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.10 Entire Agreement. This Agreement, including the exhibits,
schedules, and other documents and instruments referred to herein, embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
9.11 Severability. If any one or more provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal, or unenforceable provision had never
been contained herein.
9.12 Schedules and Exhibits. All Schedules and Exhibits attached
hereto are hereby incorporated in and made a part as if set forth in full
herein.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
OMNI ENERGY SERVICES CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SHAREHOLDERS
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇
---------------------------------
▇▇▇ ▇. ▇▇▇▇
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THIS EXHIBIT OMITS THE FOLLOWING SCHEDULES AND EXHIBITS. THE COMPANY WILL
SUPPLEMENTALLY FURNISH THE COMMISSION A COPY OF ANY SUCH SCHEDULES OR EXHIBITS
UPON REQUEST:
Schedule 1.4 List of Shareholders
Exhibit 2.1 Employment Agreements Between the Company and each of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
28